Crisis Marketing Strategy I: Brands and Technology
You are reading the first article from a series of three articles written to provide a recap to GoWork’s exclusive webinar: Crisis Management: How Brands in South East Asia Are Adapting Their Marketing Strategy in the Time of COVID-19. Stick around to hear about some of the most inspiring crisis marketing strategy stories from brands in China during the wake of the crisis.
The COVID-19 Crisis has spelled trouble for many businesses, especially those in the offline retail industries. The combination of government measures against crowding in public spaces and the public affinity towards social distancing had a grim impact on offline retailers. Their consumer base, now advocating stay-at-home movements and online activity initiatives, are simply out of their reach.
In this series of articles (a recap from our exclusive webinar event: crisis management, learn from Creative Capital’s Agustinus Michel and Gianvito D’Onghia in exploring how retailers in China utilize technology to touch base with their consumers, maximizing their online presence, and establishing online marketplaces and events.
Guided by GoWork’s Area Manager in Bali, Ping P. Hendra, the webinar explored some of the more unique insights and inspirations to the breakthroughs that this crisis has brought brands into.
The Grim Portent
When the pandemic (then endemic) first hit the country of China in January, it changed the face of the economy of the burgeoning country entirely. Despite its continuously digitized market, China’s retailers were very dependent on their brick-and-mortar outlets.
About 70% of stores had to be closed down. Fashion retailers like Burberry closed nearly half of their stores country-wide, and some other brands like Uniqlo are hit even harder: 40% of their stores are closed, which amounts to about 270 stores.
No one was safe, not even Starbucks. The coffee shop giant closed down more than 2000 of their stores, on the account that it is a place of public gatherings – which the government urges to reduce.
On average, 70% of storefronts were closed amongst all of the offline retail stores. Relatively better-off companies close about 50% of their stores. Those that are facing worse? They had to close down all of their stores.
This consequently caused retail sales in China to drop by 20.5% after the outbreak started. This massive drop forced brands and retailers in the country to adapt to the situation, especially knowing that the situation is not ending anytime soon. So, what did the brands do to adapt to the situation? They are turning their business online.
The Great Online Exodus: A Crisis Marketing Strategy
Making the move towards the online is not as easy as it sounds. Often, it means changing the service blueprint altogether, or abandoning certain assets and aspects of the business. However, some of the retail brands in China have found some of the most innovative and inspiring workarounds to continue business as usual without having to make fundamental changes.
The worry over infection spreading from touching surfaces has driven F&B business to develop a method of “Contactless” Deliveries.
This method of delivery minimizes risk of infection/exposure from their kitchen/production to the customer and vice versa by removing many points of contact during the delivery.
After the customer makes the order entirely online, the restaurant’s designated driver picks up the food from the restaurant compound in a one-way switchable receptacle, so that they won’t have to enter the restaurant in person. Then, the driver delivers the food to the customer, leaving the package in front of their house/apartment unit’s door, notifying them through the App.
Livestreaming was already big in China even before the outbreak. However, the crisis has caused its popularity to surge, reaching an all-time high number. Retailers, especially shopping malls, fashion brands, and restaurants are quick to jump on the bandwagon to maximize their brand relevance in the time when no one is leaving their homes.
Shopping malls and department stores in China such as SKP, Galleries Lafayette Beijing, and Plaza 66 had to shorten their operation times or cut down retail rents due to the low number of foot traffic in their premises.
Easyhome, one of China’s largest home improvement and furniture retailers, had 232 of its staff broadcast 4,810 sessions in a week to more than 3,5 million viewers. Its president even made an appearance to personally give away 1,000 red envelope benefits to the audience.
The number may look big enough already, but this is still one of the many ways brands are adapting to the new online normal, which results in even bigger numbers.
Not only malls, but also some of its tenants – specifically fashion brands are relying on livestreaming platforms to showcase their new products and create a virtual shopping experience.
FILA set up their private domain in China’s #1 social media and instant messaging platform, WeChat to connect with their customers. More than just doing livestreams, FILA also greets customers, and provides a one-on-one shopping experience by introducing new products and publishing discount information. This ensures that the FILA brand stays relevant in the eyes of their customers.
Taking it up a notch, DIOR holds an online fashion show on Weibo, inviting their most influential brand ambassadors to rally for support for Wuhan and other affected areas in China. This results in a staggering amount of viewership: 10 million+ viewers were recorded to have participated in the virtual fashion show, garnering 800,000+ reposts and comments on the platform.
Behind such groundbreaking and game-changing innovations are the platforms the brand used to reach their audiences. Nothing promotes usage of social media, instant messaging, and news portals more than a pandemic that forces people to stay indoors for a long period.
The Cooperation between Retailers and Restaurants
The pandemic has brought an unprecedented boon towards one of China’s largest markets for fresh food, daily necessities, and groceries. In fact, the demand has surged so high that it caused a temporary labor shortage for grocery-delivery companies such as Hema and JD.
However, on the other side of the coin are the ready-to-eat, restaurant & catering SMEs, who are facing a labor surplus due to the decrease of orders and subscriptions. At one point, 93% of china’s catering companies had to close some of their stores.
How did this happen? A short explanation would be this: People elect to cook their own food at home instead of buying meals at restaurants and from caterings due to fear of exposure to the virus – be it from going outside or having to eat food that came from the world outside.
Online retail and grocery stores saw this opportunity and quickly enlisted the idle employees temporarily to help deliver the customers’ orders, initiating a form of “employee sharing” to meet the demands and at the same time, prevent unemployment and overworking of employees.
Beyond human resource efforts, retailers such as JD also partnered with restaurant enterprises to sell packaged, ready-to-cook delicacies and instant dishes on their online platform. This both adds more value to JD’s product diversity, and helps maintain the restaurant relevancy by bringing original flavors from people’s favorite restaurants to their own kitchen.
Now that we’ve seen how the brands and companies are reacting to the pandemic, it is time to see how much the market and audience have been affected by the crisis.
Up next, learn how reliant the consumers are now to the online platforms, and what is their reaction towards the crisis – plus how and when is it going to change.
Make sure to keep our blog bookmarked for the second part of this series.