17 Mar What to do if your offline foot traffic plummets to zero
Covid-19’s outbreak has impacted the travel, hospitality, and retail industries most, causing the closure of offline service facilities, and leading to at least RMB 1 trillion revenue loss during Chinese New Year. One of the biggest pain points for the retail industry is how to deal with offline staff and retail spaces given the fact that there is a sharp decline in offline store traffic as consumers are restricted to gather outside.
How are retailers in China smartly solving this pain point?
Even though traditional China-based retailers can’t adopt a new retail model overnight, they reacted very quickly by transforming their offline staff into online salespeople and leveraging China’s dynamic digital ecosystem. In the meantime, China’s 854 million netizens haven’t lost their eagerness to spend money after a long period of “consumption downgrade”, which further accelerated the digitization of the retail industry. We have identified some noteworthy strategies of offline retailers successfully turning online.
1. Turn offline stores into live streaming studios and store staff into live streamers
Forest cabin is a Shanghainese skincare brand using all-natural ingredients from around China. Due to the outbreak, Forest Cabin’s offline sales decreased by 90% compared to the Chinese New Year 2019. In order to compensate, the brand started live streaming on Taobao live streaming with offline sales assistants to promote their products. The decision saved the company from bankruptcy as it achieved +45% YoY growth as of 15 Feb 2020 with 90% of the sales came from online.
LOOK, the KOL-commerce pure player turned retailer, launched regular live streaming events with featured brands for VIP customers in WeChat groups. Customers were able to watch live streaming recorded from offline locations and buy the products through a WeChat mini-program.
TAXX, one of the trendiest night clubs in Shanghai, became the first night club to launch live streaming on Douyin with DJ performing in the physical venue, providing virtual clubbing experience (iClubbing) for followers. The live streaming generated 400,000+ RMB revenue on the first day, which was donated to charity.
2. Leverage WeChat private traffic to drive sales, while stores serve as warehouses
In China, it is standard practice for clients to add their sales advisor on WeChat after purchase. Whilst clients were homebound, sales assistants from brands like MaxMara actively shared product pictures on their WeChat moments and highlight home delivery service. This allowed for customers to purchase and receive their goods without leaving home whilst store staff could generate commissions.
The Chinese shoe brand 73 hours gathered its existing VIP customers into a WeChat private group where sales assistants shared products’ information with special discounts and limited-time periods for existing clients to purchase directly.
This initiative further built up the brand’s customer community whilst generating qualitative customer insights. Meanwhile, customers received real-time and one-stop service from the group host, as well as connection and advice from other members.
Perhaps counterintuitively, WeChat identified an opportunity for Location-based advertisement and launched their LBS WeChat moment ad during the outbreak, possibly to support offline retail in the digitalization of their operations and drive nearby foot traffic.
How could these examples inspire you?
China-based retailers show strong adaptability and resilience in the face of difficulties, by finding creative solutions to continue operating and serve clients.
Some ideas you could quickly experiment:
- Consider live streaming as an additional sales channel for store assistants to generate sales based on the store’s stocks and earn commissions
- Test WeChat location-based ads to attract nearby foot traffic
- Explore experience-based technologies (360 degrees/AR/VR mini-programs) to engage with customers
- Strengthen your community and generate sales with private groups.
In our day and age, uncertainty is the norm, and with development pace accelerating, crises are also likely to occur more frequently. Hybrid models resist better to drastic changes by allowing them to balance activities with agility. From resilience to antifragility, let’s co-create your digital future together.
Co-authors Rachel Daydou & Jiaowei Tang