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Lesson 5 - Experience

Lesson 5 // Experience

China has leapfrogged in customer experience

Ecosystems produce unparalleled convenience

China has leapfrogged in brand experience, enabling a level of customer convenience that is unparalleled anywhere in the world. Only in China can consumers navigate their daily lives working within one or two ecosystems to find all the products and services they need or desire, pay digitally, and expect immediate fulfillment.

The primary experience challenge for brands in China is that the bar is set high. Until recently, the first priority of the rising Chinese middle class was material wellbeing. Customer experience was relatively unimportant. Now, however, when more Chinese consumers have money to spend and greater choice to spend it on, customer experience is a key differentiator.

The emerging experience challenge is that, especially in upper tier cities, people who have achieved material wellbeing are interested in improving their quality of life. They also are more aware that less tangible needs remain unfulfilled. Brand success in the future will require building on China’s unprecedented convenience with new and differentiating experiences that meet the changing consumer needs of a more prosperous society.

Worldwide, 90 percent of consumers say they would prioritize experience over possessions, according Kantar Consulting’s Global Monitor. In China, this general desire for experience manifests in a distinctively Chinese way because China’s affluence has come at a price, which is that work time has intruded into the personal time.

The success of health and wellness brands reflects the consumers’ attempt to find life balance. Of people shopping services during the Singles Day festival, many bought a gym membership. Hotel brands, which normally cater to travelers, have introduced special holiday or weekend breaks from the daily routine. Family packages include activities for children, such as tickets to nearby amusement parks.

Responding to the importance of experience, e-commerce giant JD opened its largest physical store, during Singles’ Day. Called JD E-Space, the futuristic space is an expansive experiential center where consumers can spend time experiencing products from a wide range of categories, before scanning a code for purchase and delivery.

The rise in consumer experience expectations also impacts B2B brands that interact with consumers. The courier SF Express allows people to choose a pick-up time, create a QR code for tracking, and make a mobile payment. These transactions include a record of the merchandise customers ship, providing SF Express with a valuable consumer database.

Kantar has developed a metric called CX+ to measure factors that comprise customer experience (please see sidebar). Brands that excel in these factors deliver exceptional customer experience, which pays a significant business-building dividend.

Kantar’s CX+ measures key experience factors

Exceptional experience flows naturally from being a customer-centric organization in which the experience a brand delivers matches the promises it makes. Kantar calls this holistic alignment CX+. Brands that perform well in CX+ are characterized by:

Clear Brand Promise articulated effectively by the brand and understood by customers

Empowered Employees who provide proactive, responsive, empathetic service

Empowered Customers who can “do it their way” across frictionless virtual and physical channels

Lasting Memories that give customers positive emotional moments throughout their journey

Exceptional Delivery that reinforces brand choice, and generates loyalty, advocacy, and customer lifetime value

Memorable experience unlocks growth. Kantar research found that CX+ leaders do better in level of recommendation, willingness try new products, and share of wallet.

Range of experiences rapidly evolves

China is always about rapid change—in economic expansion, the rise of new cities, technological advance. As a consequence, the experiences Chinese value are also rapidly evolving. The experience changes most critical for brands include:

Blurring Borders Because people are time-pressed, experiences are becoming multifunctional or overlapping. A retail space doubles as coffee shop and bookstore. Work and private time overlap.

Technology Technology is changing traditional experiences and creating new ones. Some experiences do not seem to happen until they are documented with a selfie and shared.

Joyfulness Reacting to their work life intensity, Chinese are looking for restorative, stress-reducing experiences: a travel holiday, a concert, a meal at a popular restaurant.

Discovery Related to a rising sense of individualism, people seek ways to increase their skills and accomplishments.

Meaningfulness People are pursuing more meaningful experiences that improve knowledge or refinement rather than status.

Individuality People want experiences that are unique and exclusive, accessible not because of wealth but because of individual interests and proficiency.

Key Takeaways // Experience

Brand Building for Future Growth

  1. Acknowledge that experience is critical

Just a few decades ago, millions of Chinese consumers had to save for months to afford an entry-level TV. Today, consumers often own the latest and largest smart TV. Acquiring material goods is still satisfying, but not as satisfying as it was. People are looking for new experiences. (Please see sidebar on previous page)

  1. Think outside the category

Brands need to create new experiences that align with the brand promise, delight consumers, and engage them with the brand. This requires thinking beyond the brand’s core offer and category, and instead thinking about the wider ecosystem in which the brand participates. An airline, for example, needs to consider not only all the touchpoints in getting passengers safely to their destinations, but also other potential touch points. By satisfying the hotel, entertainment, ground transportation and other customer needs, a brand can turn a routine journey into a memorable, brand-building experience.

  1. Deliver consistency across touchpoints

Integrate the way the brand interfaces with consumers at all touchpoints, online and offline, to maximize customer interaction and engagement. The customer experience journey map is much more complicated in China, relative to most Western markets, because of the complexity of China’s O2O landscape. Success requires consistency in the way the brand makes the customer feel when shopping on Tmall or WeChat and offline in a physical store. Every ad, brand message, branded content, and KOL conversation needs to represent and reinforce the brand.

  1. Minimize friction

Identify and surpass expectations at the moments that matter, supplying useful personalized recommendations, for example, to save shoppers time and anxiety. Identify and minimize friction points, like frustration at checkout or excessive wait time for deliveries. This advice, important in the West, is imperative in China. In the West, tapping instead of swiping a credit card is still welcomed as a way to reduce friction. In China, credit cards are a relatively minor factor at retail, and checkout is accomplished with a personal QR code or sometimes with facial recognition.

  1. Make experience sharable

Make sure the experience is socially shareable, on WeChat Moments or on a TikTok (Douyin) short video, for example. Brands need to be more experiential in the way they present their products, especially with the impending 5G era.