Drapers explores how British retailers can make the most of the world’s highest-spending travellers.
With summer fast approaching, millions of international visitors are poised to descend on the UK for the culture, the history and, of course, the shopping.
Chinese tourists are the world’s biggest spenders when on holiday, and splashed out an estimated $260bn (£186bn) worldwide in 2016.
Figures from tax-free shopping organisation Global Blue suggest the average Chinese tourist spends 58% of their holiday budget on shopping, and the average spend is £1,409. The UK enjoyed a 32% rise in spend from Chinese visitors in 2017, building on a 26% rise in 2016. Tourist spend was boosted by sterling’s weakness since the Brexit referendum, which made the UK one of the cheapest places in the world to buy luxury brands.
Drapers speak to industry experts about how retailers can capitalise on this visitor influx and ensure Chinese shoppers keep coming back for more.
Adapt to your customers
Retailers must be aware of the differences between domestic and international customers, and understand the needs of both. Brand recognition is a huge factor in the popularity of British brands. When they are already aware of a brand, tourists are more likely to both visit stores and make purchases.
Department store Harrods is the biggest UK destination for Chinese tourists – it took more than £200m from this group alone in 2017.
“Many British platforms [such as apps and websites] are not available in China, so we need to adapt our shopping experience to meet their needs, as Harrods does,” says Jamie Powell, UK managing director of The British House, a Beijing retailer that sells luxury British goods. “Harrods opened a tea room in Beijing to gain exposure. Chinese shoppers visited the tea room, then wanted to visit the London store as well.”
Sue Shepherd, centre manager for London Designer Outlet in Wembley, west London, agrees: “It is about understanding how they like to shop – what kind of service makes them feel comfortable in a UK shopping environment?”
Language barriers can be a deterrent for foreign shoppers. Some larger retailers employ Mandarin-speaking employees, while those who cannot hire specialists can help shop-floor staff learn basic greeting phrases to make customers feel welcome.
Say hello on social mediaChina is the world’s largest and fastest-growing retail market, and has the world’s highest rate of internet users, market research firm Emerging Communications has found. However, British retailers wishing to capitalise on this spending potential can fail if their brand is not well known in the market.
Social media is key to communicating with Chinese shoppers. Mobile payment provider Alipay estimates that around 80% of the Chinese population spends at least two hours on their smartphones each day – this provides a direct channel to potential customers.
Many Chinese retailers use local influencers – known in China as “key opinion leaders” – to boost exposure, and Emerging Communications advises UK retailers to engage Chinese consumers with localised content to get on their radar before they travel to the UK.
CEO Domenica Di Lieto says: “Micro-influencers have fewer followers, but carry authority because of their professional status or other factors, such as being a journalist or fashion model. Working with them can create instant credibility. For new entrants to the Chinese market they provide a quick way to gain traction, and for more established sellers they are invaluable in growing your profile and supporting new campaigns.”
Adopt Chinese payment methods
To tap into Chinese tourists’ appetite for western brands, retailers need to offer payment on a familiar platform, says Tao Tao, business development director, EMEA for payment platform Alipay: “China’s 1.4 billion population is largely mobile-only. Everyone has a smartphone and it is integrated with their daily lives: social, financial services, business management and leisure. They spend a lot of time on mobile because of ‘super-apps’.”
Platforms such as Alipay, WeChat and Weibo are seen as “super-apps” because they consolidate chat, shopping and payment. They are the preferred payment method across China, and stores such as Harrods and Selfridges have increased awareness with Chinese visitors by having presence on them.
Because of tax-free shopping, Chinese visitors can purchase products in Europe more cheaply than at home. However, Global Blue says difficulties in claiming tax-free redemption at airports is the biggest cause for complaint about the process. London Designer Outlet is tackling this issue by offering on-site tax-free redemption.
Make shopping a key travel activity
Shopping outlets such as Bicester Village in Oxfordshire and London Designer Outlet have become tourist destinations in their own right, and companies such as Shopping Express organise coaches to take international visitors from their hotels to these outlet centres. Additionally, there are clearly marked signs in Mandarin at stations to direct international shoppers.
A Bicester Village spokesman says: “We go to great lengths to ensure that the shopping experience is as seamless as possible for our international guests. Arabic and Chinese speakers and signage provide simple navigation, while Chinese guests can make purchases using Alipay.”
Furthermore, while Black Friday, pre-Christmas and Boxing Day Sales are key events for UK retail, Chinese New Year and Golden Week in October are the biggest shopping dates in the calendar for Chinese tourists. It is vital to build marketing around these festivals.
One size does not fit all Trying to make British marketing tools, such as social media influencers from the UK, work for Chinese audiences is the easiest way to alienate Chinese consumers. Tailored marketing is needed.
Use social media effectively International audiences may need to be educated about British brands they are unfamiliar with. To drive awareness social media is the easiest communication tool, but it needs to be relevant, engaging and targeted to its audience. The best platforms to use are Weibo, WeChat and Alipay.
Do not ignore “resident tourists” The UK is visited by millions of Chinese tourists each year. However, there are also many Chinese residents. When they bring international family and friends to visit, you want to be at the top of their to-do list.
Give up on “sell, sell, sell” The “car salesman” attitude will only go so far. Chinese tourists want bargains, but they want to buy luxury brands – and they still want the luxury brand experience. Not giving enough context about the brand and failing to establish trust with the audience are often deterrents to tourist expenditure.