After the launch of the new Bobby handbag series, Dior has a new move. On June 14, Dior Tmall flagship store opened with a low-key forecast. However, the online launch of Dior's store is quite conservative compared with the bold opening of accounts in Diaoyin before. The store only launched skin care and makeup lines, but the clothing bags with higher prices are missing.
Affected by the epidemic, luxury goods have moved online. Brands such as Prada and Burberry have not only opened Tmall flagship stores, but also have all kinds of products. In contrast, it is uncertain whether Dior, who has won the first mover advantage on multiple social media, can continue to advance rapidly.
The attacking Dior
The star products of Dior, MissDior perfume series and bright blue gold lipstick, were all promoted on the first screen of the store. At the same time, Dior also emphasized that it is "the only official Tmall flagship store" and "100% official authentic product guarantee". Without any publicity, the store has attracted nearly 14000 fans. The reporter of Beijing Business Daily contacted Dior about the online layout. As of press release, no reply has been received.
Against the background of slowing growth of the whole luxury industry, Dior's performance is not weak. Dior's latest financial report disclosed that its annual sales reached 5.52 billion euros in 2018, becoming the sixth brand in the luxury industry with annual sales of more than 5 billion euros, keeping pace with Louis Vuitton, Chanel, Gucci, Cartier and Hermes.
At the beginning of this year, it was reported that Bernard Arnault, the boss of LVMH, intended to privatize Dior. It is reported that Arnault has long held 96.5% of the equity of Dior Group through the family company. According to the French standard that only 90% - 95% of the equity can be forcibly acquired by major shareholders and delisted, Arnault can privatize Dior without waiting for new financial terms to be passed.
This also means that Dior Group will reduce the disclosure of financial data, but privatization can also combine ownership and control to a certain extent, reducing agency costs. Since then, Dior has not separately disclosed financial report data.
Behind the privatization of Dior is the slow growth of the whole luxury industry. According to the "Global Luxury Industry Development and Outlook Report" released by Bain&Company, the global luxury market, including luxury cars, luxury hotels and personal luxury goods, grew by 5% in 2018, and the personal luxury goods market is expected to maintain an annual growth rate of 3% - 5% by 2025 in the future.
Dior did not wait to be killed. Dior has worked hard in digital development in recent years. Where there is traffic, luxury goods will be intercepted. Dior first focused on the cake of Diaoyin and became the first luxury brand with Diaoyin's official account in the Chinese market.
In addition to Dior, Chanel, who originally kept a distance from digitalization, has recently cooperated with Douyin. A blue V account named "Tipping Voice Image of a Better Life" announced earlier that "it premieres at 0:00 every day, presenting 12 pieces of Chanel J12" in a similar way to Taobao's short videos. At present, 12 pieces of Chanel J12 watch advertising videos have been launched.
However, compared with Dior, who opened a dithering account in 2018, Chanel has not yet taken any action in this regard.
Make up or dress
It is worth noting that Dior is also the first luxury brand to launch handbag purchase online in China.
In July 2019, Dior Online Boutique officially launched in the Chinese market, selling a full range of products including handbags, high-end jewelry, cosmetics, ready to wear and so on. Previously, Dior had opened online boutiques in European countries and the United States, while Asia currently only includes mainland China, Japan and South Korea.
In fact, in recent years, luxury brands have been accelerating the online process, and the Chinese market is considered to be an important market that needs to be overweight. Chanel, Giorgio Armani and other brands have also successively settled in Tmall's online flagship stores.
However, at the beginning of the launch of many luxury brands, their products were only skin care products and cosmetics, not including clothing bags and other categories. The same is true of Dior. A reporter from Beijing Business Daily found that the flagship store of Dior Tmall currently only has three categories: makeup, fragrance and skin care.
"The difference between clothing bags and cosmetics and skin care is that clothing bags have higher unit prices and store services play a greater role in the sales chain, so clothing bags rely more on offline store sales. While cosmetics and skin care are more civilian. The link between planting grass and weeding is relatively short, which will transform at any time, so it is also more suitable for online sales. " Zidao Marketing explained that.
In addition, makeup does not require precise users or scene experience, which is more similar to spreading a net. However, the selection of audience groups for products such as clothing bags needs to be more accurate. Whether it is the audience's consumption ability or taste style, it needs to be identified by manual sales. In other words, there are more restrictions on the sales scenarios of clothing bags, while cosmetics can be sold online and offline. Especially for the third and fourth tier cities without counters, online channels are more convenient, that is, cosmetics can be sold better online.
The epidemic has hit, offline channels have been broken, and more and more luxury goods have moved the business of bag clothing online. Since this year, Tmall has seen the phenomenon of centralized opening of luxury stores. Cartier, Prada, Kenzo, Miu miu and Cartier have opened stores in a concentrated manner, and the speed is accelerating. According to incomplete statistics from Beijing Business Daily, up to now, more than 150 luxury brands have settled in Tmall.
Public data shows that from January to April 2020, the sales of domestic luxury goods declined by about 30%. Yang Li, the managing director and global partner of Boston Consulting, pointed out that the COVID-19 epidemic had a great impact on the sales of fashion and luxury goods. The Chinese retail sales figures during the period showed that fashion and luxury goods were the category that suffered the greatest impact except catering.
"At present, the growth rate of e-commerce has returned to normal, but the recovery rate of physical stores is lower than expected." Yang Li pointed out.
LVMH's first quarter report of 2020 shows that, excluding the impact of exchange rate and structural changes, the total revenue declined by 17% year on year, the first decline in nearly a decade, and it is expected that the sales in the second quarter will continue to decline. It is reported that Bernard Arnault has lost 200 billion yuan during the epidemic.
Kaiyun Group, another luxury goods group with Gucci, YSL, Balenciaga and other brands, also showed a similar decline, with its revenue falling 15.4% year on year in the first quarter, of which Gucci sales, the most profitable one, fell 22.4%. The group said that it was preparing for the toughest year. Relevant measures included cutting the cost of its brands and postponing the launch of new products. Burberry, a luxury brand in the UK, has warned investors that its sales will fall by as much as 50% in the first quarter.
Some brands even choose to increase the price to "protect their lives". Louis Vuitton, Tiffany&Co, Chanel and other brands have adjusted the price of some products during the epidemic. "Our manufacturers and suppliers are now in a difficult period, and Chanel must continue to support them in the best way," said a spokesman for Chanel.
Who can break through
Under the epidemic, the fashion industry seems to have reached a consensus of "online savior theory". So far, LVMH has 22 brands settled in Tmall. Wu Yue, president of LVMH Group in Greater China, said publicly: "Many brands under LVMH Group have established cooperation with Tmall. LVMH Group will actively embrace digitalization, which naturally includes further increasing the proportion of e-commerce in the Chinese market."
Public data shows that in 2018, global luxury consumption in retail channels grew by only 4%. Compared with physical stores, online luxury shopping channels continued to accelerate in 2018, with an increase of 22% and sales reaching 27 billion euros.
McKinsey Consulting, together with Fondazione Altagamma, an Italian luxury goods association, released the Annual Report on the Observation of Luxury Digital Marketing. It is predicted that the market share of online luxury sales will double to 12% in 2020 and rise to 18% in 2025, which will make e-commerce the world's third largest luxury goods camp after China and the United States.
In addition to Dior, luxury brands are also looking for different online channels. Versace and Alexander McQueen both have more than 40% participation on Facebook, which is much higher than most other brands. At the same time, their participation in Instagram also ranks among the top ten. As the number of broadcasts has doubled year by year, Versace has also become the brand with the highest score on YouTube, and the number of broadcasts of Valentino brand is also among the top ten.
However, how much influence does luxury e-commerce and social media have on sales? Can Dior break through?
Zhang Peiying, honorary consultant of Luxury China Alliance, told the Beijing Business Daily that luxury brands' advertising in social media is not only focused on the current sales transformation, but also wants to develop new customer groups. At present, the youth of luxury brand consumers has become a trend. Dior layout dithering is a process of customer group cultivation, which cultivates the current young generation as the target consumer group of the future brand to achieve long-term brand promotion. However, he also said that luxury brands would not only focus on quaver marketing, but also pay more attention to more direct customer groups in the segmentation field. This trend is very important for winning the millennial consumer market, and by 2035, millennial consumers will account for 40% of the luxury consumer market.
Zhou Ting, president of VIP Research Institute, also believes that in the past, brands usually created public images from top to bottom through advertising, establishing partnerships with magazines and other ways. However, luxury brands now have to consider all customer groups more comprehensively, because social media is constantly shortening the distance between brands and customers. Beijing Business Daily reporter Tao Feng, Chang Lei, Kong Yaoyao
