How Far Can Chanel Go When The Internet Is Rising?

According to the world clothing shoes and hats net, the rise of the Internet has always been very cold.

I had to lower my figure and join in the tide of Internet.

Whether through

The sales of channels, or propaganda by digital means, have made the luxury brands taste the sweetness, which has strengthened their pformation.

But as a fire

(Chanel) is now in the opposite direction. Recently, French classic luxury brand Chanel said publicly that it will terminate the electricity supplier business process, and its clothing and bags products will also stop selling online.

Bruno Pavlovsky, President of Chanel fashion and accessories department, said that next year's focus will be on physical stores and show activities. Then, in today's environment, is this decision right or wrong?

Electricity supplier or become a luxury standard

In many channels, the personal luxury consumption of the electricity supplier channel has reached 19 billion US dollars, occupying 7% of the total market sales.

Data show that in 2016, global luxury online sales increased by 9% over the same period last year. This is in stark contrast to the frequent closure of many luxury brands online stores, which are faced with tremendous performance pressure.

Benefiting from the growth of e-commerce channels and initial success of the group's all channel strategy, Prada (Prada)'s revenue and profit declines continued to narrow compared with the first half of 2016, and its gross profit margin increased to 74.1% from 72.2% in the same period last year.

Some analysts believe that in addition to product design, what really makes Gucci (Gucci) stand out is that the brand has repeatedly broken through the conventional marketing strategy.

Francois-Henri Pinault, chairman and chief executive officer of Gucci's parent company, believes that luxury brands should be digitalized in two aspects: one is the business of electronic commerce, and the other is digital content.

In the next 5 years, the introduction of e-commerce is expected to boost the revenue of the luxury sector by 32%.

Due to the lack of other factors to promote growth, whether we can grasp the digital channels to influence consumers and achieve sales is related to the development prospects of a brand.

In the face of the current big situation, nowadays, the "luxury" brand of "electric shock" is already in the minority.

In July of this year, LV (Louis Weedon) formally announced the launch of online shopping service on the Chinese official website, which included all the products of the season.

And this is the fourth traditional luxury brand in the Chinese mainland market after COACH (Kou Chi), Burberry (Bo Baili) and Gucci (Gucci).

Givenchy has launched its brand-new official website and launched its brand products in September this year.

Philippe Fortunato, the brand's chief executive, said that the new service offered by the official website is not just a platform, but the core of the whole brand's future development. The ultimate goal is to get through the brand online and offline channels to achieve full channel retail.

Hermes also announced in October this year that WeChat Limited shop will be opened in WeChat public.

In addition, Dior (Dior), MontBlanc (Montblanc) and Cartire (Cartier) have completed the "electric shock".

Go against the road

KOL knows very well that fans want to get attention from their concerns about their views of fashion and brand, rather than just promoting a brand.

Contrary to other brands in the road of digital pformation, French classic luxury brand Chanel said recently that Chanel will terminate the electricity supplier business process, and its garments and bags products will no longer be sold online.

Bruno Pavlovsky, President of Chanel fashion and accessories department, said that next year's focus will be on physical stores and show activities.

Such an anti course move is closely related to the sustained downturn in Chanel's performance in the past two years.

According to the 2016 earnings report written by DDT for Chanel, its sales fell 9% to 5 billion 670 million US dollars during the period, and net profit dropped 35% to 874 million US dollars in the same period.

Faced with the downturn in performance, Chanel has taken many measures to save itself, for example, in the past two years, its company has not worked hard in marketing propaganda.

First of all, Chanel attaches great importance to publicity activities.

Chanel recently held the theme of "space nostalgia" at the The Grand Palace Museum in Paris.

In China, Chanel has also launched various exhibitions, including the J12 series of non black and white wristwatch exhibitions and Beryl perfume exhibition.

Recently, Chanel creative director and German fashion designer Karl Lagerfeld brought the brand 2017-2018 advanced handicraft workshop series back to his hometown Hamburg, Germany.

He said: "brand legend is very important. Every big show conveys brand influence to our customers and brand fans.

However, consumers seem to be more and more reluctant to pay for large-scale show marketing. Independent fashion commentator Leng Yun once said in a media interview that the overall trend is that consumers are increasingly fond of a way of communicating with people and having their own choices.

This is also the birth of net red and KOL (key opinion leader) from ordinary netizens. It will become popular in some areas, and its influence will surpass an important social factor of stars. Luxury shows are far away and lack of interaction for such groups.

According to the reporter, Chinese KOL fans are as high as 2000 million -2500 people. It is obvious that the publicity of KOL is very large. Many luxury brands are increasingly trying to promote the brand's hot products through cooperation with these KOL.

Against this background, Chanel has not signed a contract with any KOL. Bruno Pavlovsky said that KOL understands that fans want to get attention from their concerns and view their fashion and brand, so they will not blindly promote a brand.

Their fans want to know about KOL's real view, rather than just seeing KOL being advertised after being hired by a brand.

As a brand side, we need to pay attention to this and not confuse the two.

In the view of Bruno Pavlovsky, luxury brands need to deal with the balance between the uniqueness of goods in stores and the cultivation of broader customers.

Based on this consideration, Chanel has chosen not to pursue the trend of digitalization too much. Clothing and handbag businesses do not intend to open online businesses for the time being.

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Creative people win the world.

Different views on the uniqueness of luxury goods are the fundamental reasons why Chanel and its peers make different choices.

Previously, Bruno Pavlovsky revealed: "in 2018, Chanel's focus will be on opening six flagship stores, whether it's new stores or reopened shops."

The six shops are located in major cities all over the world, including a new store in 57 street in New York, the first flagship store in Seoul, a new store in Brompton Cross in London, and new markets Copenhagen and Abu Dhabi.

In the Chinese market, Chanel has plans to open stores in China World Trade Center, Beijing.

After the implementation of Chanel's global price adjustment strategy in 2015, China's market business has been greatly boosted.

"The global price gap is getting smaller and smaller," he said. "I see more and more Chinese consumers begin to enter the local Chanel stores instead of buying luxury goods through overseas tourism shopping."

Why do you choose to return to the physical store instead of continuing to expand online sales? Chanel official said that if everyone can get a thing directly, this thing will eventually lose its scarcity, and the value of luxury goods lies in its scarcity, because the scarcity is unique.

Different views on the uniqueness of luxury goods are the fundamental reasons why Chanel and its peers make different choices.

If any brand wants to get long-term development, it should return to the product itself.

When Franois-Henri Pinault delivered a speech at the Vogue Fashion Festival event in Paris, France, it was said that when the millennial consumers choose luxury brands, their creativity has surpassed the quality of history and product to become the primary factor for their consideration.

Franois-Henri Pinault believes that the brand of Kai Yun group needs to introduce more young designers to keep up with the changing tastes of young consumers.

"The key is to be creative. This is our bet. We can not impress them by history alone and quality. The younger generation has great demand for personalization."

In his view, creativity is a preservative for the relationship between the luxury brand and the new generation of consumers.

Even if the major luxury brands are playing the experience card today, if they can give consumers a pleasant shopping experience in the store, people may still be willing to return to the physical store itself to shop.

Although Chanel chose to stop developing e-commerce business, it lost potential customers on the line.

But at the same time, it also makes its products more valuable. Especially in this era of almost everything that can be bought online, is Chanel's measures protecting the most important uniqueness and scarcity of luxury brands? Let's wait and see how the future will develop.

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