Retailers get creative to meet online trend

Despite all the hype about online shopping, brands and retailers are gradually realizing the indispensable shopping experience brought by offline retailing and physical stores.

Retailers are also thinking of new ways to shift their presence from a place to merely sell merchandise into a place to better interact with consumers and drive more foot traffic for the benefit of their own as well as merchants and brands.
 
Latest digital technologies and the convergence of online and offline resources is offering new opportunities for them to target and interact with consumers.

One of the impressive examples is fast food chain KFC's collaboration with NetEase’s popular role-playing mobile game Onmyoji through leveraging the augmented reality and location-based technologies.

NetEase developed an exclusive “KFC Boss” for Onmyoji players which only shows up when users play the game in KFC selected offline restaurants. They can also invite friends to join them in the specific locations which would also in return bring more foot traffic to KFC stores.

A total of 3 million Onmyoji special meal boxes with flashcards were sold out in 9 days.

As many as 55 percent of Onmyoji players are aged between 18-30, and 49 percent of them live in tier 1 and 2 cities, which also fits with KFC’s primary target customers.

Yum China chief marketing officer Steven Li told Shanghai Daily that it’s a part of the efforts to allow the fast food brand to become young and stay connected with a new generation of consumers who are willing to embrace entertainment formats in both online and offline worlds.

“New technology and creative activities helps us bring consumers to our restaurants around the country and to stay close to millennial customers,” he added.

In China, KFC runs a proprietary smartphone application which builds a digital ecosystem across all touchpoints of the consumer journey. 

After consumers pay at KFC stores using mobile payment, they can choose to enroll in KFC's membership program. By the end of August, total members in KFC membership program surpassed 97 million.

KFC's Li said the huge base of KFC loyalty members enables the brand to provide customized offers to increase consumer engagement. On the other hand, the member-exclusive and targeted campaigns drive the loyalty and frequency.

“We have very strong knowhow in terms of customer retailing and new technology developments have enabled us to combine our creativity with online resources,” he said. 

Jane Lin-Baden, chief executive officer of digital marketing agency Isobar Asia Pacific, said there's still much to improve in terms of the renovation of the shopping space, with a lot of apparel and clothing retailers also starting to trying to build up an innovative dressing room, among other new offerings.

"The retail industry should work hard to build a distinctive and impressive shopping space that welcome not only those who are seeking to purchase their products but to enjoy the experience in offline channels," she said.

Recreating shopping experience matters as much as launching new products and new design, with consumption-driven retailing will be gradually shifting towards experience-driven retailing models, which is just at the very beginning in China, she noted.

The Switzerland-originated infant formula brand BabyNes opened its first boutique shop in downtown Shanghai after two year of launch through domestic offline retail channels such as import supermarkets, as the new offline channel ensures visitors and potential customers get a uniformed shopping experience.

BabyNes also has a presence on Alibaba's B2C site Tmall since 2015, and the physical experience store brings additional service for potential buyers or those who still have doubt over how baby formula dispenser works. More boutique stores are to be open in selective locations in Beijing and Shanghai in the near future.

Global Business Director of Wyeth's BabyNes Nutrition System Daniel Blarer, said for BabyNes customers, online or offline channel is not an "either/or" choice, adding that the company wants to create more one-on-one counselling chance through the offline store.

"We have been gathering customer feedback and put it back into our research and development process, and we have made the second generation of baby formula dispenser more user-friendly and smaller in size," he said in a recent interview in Shanghai.
 
According to a Mintel survey earlier this year, as many as 62 percent of consumers said that being able to try and see the products in person before purchasing is the biggest factor that encourage them to shop at physical stores.

Physical stores also have the opportunity to offer human-to-human assistance through sales staff, to add to the sense that customers are given the feeling they are valued by retailers, the study also points out.
 
For brands that rely on offline channels such as distributors storefronts as well as online channel, they're also seeking to leverage both online and offline resources, when offline shopping does not only mean sales income, but also a place to encourage shoppers' participation.

Mintel survey also shows that in-store promotions are also an effective way to generate reviews and recommendations as well as in-store and a buzz online.

Payment tools and digital capabilities offered by e-commerce giants are also driving synergies between online and offline channels. Jenny Yuan, customer development director at Wyeth Nutrition China, said this year's Singles Day would be the first time for the company to combine online and offline resources.

Consumers who are purchasing from offline retail channel such as baby and maternity specialty shops can scan QR codes and receive cash coupons and enjoy the same discount as those who buy from Wyeth's online stores on Tmall.

Wyeth's Illuma series, which usually cost about twice as much as other imported infant formula, also made a debut on Tmall earlier this year.