Luxury brands navigate Shanghai lockdown to pamper VIPs

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By Casey Hall

SHANGHAI (Reuters) – What Ms Zhang didn’t expect when she leaned into Shanghai’s citywide lockdown was free ready meals and desserts from luxury brands such as Louis Vuitton and Cartier to start arriving the next day.

Since the COVID-19 lockdown began on April 1, closing stores and crippling online shopping, brands have overcome ensuing delivery challenges to deliver freebies to “Very Important Customers” (VICs) like the 24-year-old entrepreneur Zhang.

Although they weren’t high-value gifts, the effort to stay in touch “impressed and surprised us,” said Zhang, who wanted to be identified by surname only citing confidentiality.

Shanghai has seen some of the toughest lockdowns in the world, with residents banned from leaving apartments in blocks where COVID-19 cases have been discovered, while some buildings and even entire streets have been fenced off.

With supermarkets closed and supply chains disrupted, residents are struggling to buy food. Government provisions to fill the gaps were provided sporadically, with reports of varying quality from district to district.

Boost, many companies have delivered provisions to employees. For the wealthy, banks and high-end hotels have joined luxury brands in sending goodies – a privilege that has not gone unnoticed on social media.

“During the epidemic, the class divide is more evident. Ordinary citizens rush to grab rice while thoughtful luxury brands are eager to offer first-class takeout to VIP customers,” the show wrote. of tea from Weibo user Li Xiaozhou.

In addition to giveaways, some brands have organized online courses. La Mer taught DIY facials while Dior offered seven-day passes for virtual classes at a high-end yoga studio.

Prada hosted a virtual culture club, inviting writers, directors and musicians to recommend books, films and albums.

Prada SpA declined to give details when contacted by Reuters, beyond that the move had been well received.

Christian Dior SE and LVMH Moet Hennessy Louis Vuitton SE declined to comment.

Cartier, owned by Compagnie Financière Richemont SA, and La Mer, owned by Estee Lauder Companies Inc, did not respond to requests for comment.

EMOTIONAL CONNECTION

Up to 12% of China’s offline luxury retail is in Shanghai, so closing stores has required a pivot to serve VIPs virtually, but still personally, said Thomas Piachaud, head of strategy in Shanghai at the consulting firm Re-Hub.

Consumers in this segment are the most likely to escape the economic impact of the lockdown and emerge more ready to spend, Piachaud said.

“These kind of VIP customers are the ones brands really know on a more personal level. Brands know how to tailor communications and talk to them,” he said.

Luxury is not just about selling products; it also sells emotional connection, said Lily Lu, senior commercial director for digital at marketing firm Gusto Luxe.

“There is a connection that goes beyond the product,” Lu said. “During the most difficult times, even if the customer cannot buy products from the brand (at the moment), this relationship must be maintained. and maintained.”

VIC status comes with annual spend of hundreds of thousands of yuan (about $15,000) at certain brands, although minimum spend varies widely. Some sellers may also assign status to people they think are likely to spend more in the future.

Although Shanghai VICs cannot spend in stores at the moment, brands are trying to ensure they will when the lockdown is lifted.

“We received maybe 10 birthday cakes and flowers from different brands,” Zhang said, referring to her mother, who is also a VIC. “I’m sure that after confinement, the purchases will be made.”

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(Reporting by Casey Hall; Editing by Christopher Cushing)

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