Louis Vuitton

[cainiao1988]

It was duringLouis Vuitton Bagstime at the NPL that he began working to develop a Louis Vuitton Outlet crystal oscillator as he believed they were capable of measuring Louis Vuitton Purses as accurately as a Louis Vuitton based clock. Ten years after joining the Louis Vuitton Handbagshad invented the Essen ring.

[joyanu]

The Appeal of Louis Vuitton

Louis Vuitton, in particular, is a favorite shopping destination for Chinese abroad. In fact, Chinese consumers have become LV's largest consumer group worldwide. While this influx of demand has been a welcome growth stimulus for LV Europe, it has also presented its own unique challenges.

At LV's more well-known locations, such as those at Galeries Lafayette and Avenue des Champs-Elysées in Paris, it is not uncommon to find queues of more than 20 tourists from China waiting to purchase merchandise. This number swells dramatically with changing exchange rates, which, when combined with Chinese consumers' different shopping habits, have led to significant challenges for LV Europe in managing inventory. In the summer of 2010, when the renminbi was at its strongest against the euro, LV France burned through three months of inventory in just one month. As a result, through the end of November, LV was forced to limit to two the number of leather goods customers could purchase daily so that the store could save stock for the Christmas season. Several key Paris locations, including LV's flagship, began closing an hour early to slow sales.

In addition to their numbers, the shopping habits of this large new consumer group differ greatly from those of LV's traditional customers. More than 95% of Chinese tourists arrive on tour buses, leading to a quick spike in customer volume and posing a challenge for staff charged with providing premium service to each individual shopper. Also, while LV has traditionally posted its strongest sales during the fourth-quarter Christmas shopping season, the increase in Chinese consumers shopping abroad has caused sales to shift heavily toward the weeks leading up to the Chinese new year in late January or early February, resulting in a massive spike in sales in the first quarter. This has created challenges to LV as it tries to manage the supply-chain implications of a shift in seasonality.

Blistering Chinese demand, combined with factors such as purchasing limits and the high luxury tax at home, has also led to the growth of a large gray market for LV products. Managers at LV's Galeries Lafayette location were recently dismayed to learn that the two young Chinese women who held the top two spots on their VIP list, each spending more than €500,000 (US$700,000) per year, were selling them at a profit on Taobao.com, China's version of eBay.

Quite naturally, the droves of Chinese shoppers who purchase LV products overseas are of concern to LV China. LV China wants China's new luxury consumers to shop at home, not only to increase domestic revenues, but also because the company feels it can better control its "touch" in the home market: Having more Chinese staff with a better understanding of how best to serve Chinese shoppers makes LV better equipped to shape the customer experience it wants its Chinese customers to have.

In the meantime, LV has moved quickly to adapt to, and better serve, this growing customer segment. At its Paris locations, Chinese shoppers can find numerous Chinese-speaking staff, all of whom have been trained to better meet Chinese needs and better handle the spikes of tour-bus traffic. According to July Azoulay, marketing manager of LV, the LV flagship located on the Champs-Elysées hired multilingual (Chinese, Russian) staff to meet and greet its clients.

At home, LV China has developed innovative ways to strengthen its relationship with this high-priority customer group. In Shanghai, three stores exemplify LV's customer segmentation and targeting strategy: The LV flagship on bustling Huaihai Road attracts young, aspiring buyers and prominently displays lower-priced "accessible luxury" items. Across the river in Pudong, LV's location in the main business and financial district has a "more masculine décor," as described by some LV employees, and caters more directly to businessmen shopping for gifts. In Plaza 66, Shanghai's premier luxury shopping mall, LV is building its largest store worldwide, a Maison store, focused on educating shoppers. It will feature the first LV atelier [workshop] outside France, providing an ultra-premium shopping experience where craftsmen from Europe will demonstrate the traditional methods used to create LV trunks, watches and bags. In 2011, in addition to experiencing LV in stores, people in Beijing queued for hours to learn about the history and evolution of the brand at LV's Louis Vuitton Voyages exhibit at the National Museum of China.

Other initiatives LV has taken to strengthen its relationship with Chinese consumers at home include investing heavily in staff training to provide customers with a premium shopping experience and demonstrating its commitment to its Chinese customers through a new advertising campaign featuring the Taiwanese-Canadian model Godfrey Gao -- the first time LV has used an Asian male to showcase its products.

Going forward, LV and other similar luxury retailers need to continue to focus on their ability to connect with customers in China. LV's segmentation strategy in its brick-and-mortar stores in cities such as Beijing and Shanghai is a good start. For those customers already shopping abroad, LV would benefit from sharing customer data across regions so that a VIP shopper in Europe is recognized when he or she enters a local LV store in China.

LV can further strengthen its ability to connect with young Chinese shoppers via its online marketing efforts. Just as luxury brands in China generally have chosen not to tailor their products or store designs drastically to the local market so as to preserve the perceived authenticity of the brand, they generally have not tailored their online presence to better suit this new media market. However, the role of the Internet is far more important in the young Chinese consumer's shopping process than it is in other markets.

A study by Bain found that the number of Chinese consumers who rely on the Internet -- especially social media such as bbs forums and microblogging -- as a means of researching luxury goods and brands has increased by 30% since 2006. In addition to learning LV's history and brand message, young Chinese shoppers want to know how to use and wear the latest styles and to discuss trends with their peers. Incorporating the educational and interactive components of LV's Maison stores into its websites -- e.g., through a well-designed style guide -- can help LV connect with and influence customers earlier in the purchasing process. Simple directions as to where these items can be purchased locally will also help mitigate the misperceptions of inferior selection and older products at home.

The number of Chinese traveling and shopping abroad will only continue to grow, and LV's global operations should continue to adapt accordingly. With the increasingly competitive luxury market in China, LV China will need to work harder to maintain and grow market share by winning the loyalty of new waves of young Chinese luxury consumers.


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