Coach Changes In Channel Strategy? Why Will Tmall Flagship Store Be Reopened?

In August 31st, after closing the flagship store in Hongkong's central line, in September 4th, the US luxury brand Coach officially opened at Tmall's online official flagship store.

It is worth noting that this is not the first time that Coach (06388.HK; COH.NYSE) opened shop on Tmall. At the end of 2011, Coach had tried water to open flagship store on Tmall, but only 1 months later, the store was offline.

What does Coach mean by channel addition and subtraction? Why did it turn off Tmall stores in a hurry? Why do Coach reopen Tmall flagship store after the official website shopping platform?

What can Tmall store bring?

For Tmall flagship store, which has been online again after more than 3 years, Coach told reporters today that "China's e-commerce market is growing rapidly and has great potential.

It is one of the global strategies of Coach to fully explore the unlimited potential of digital domain, and also an important part of the Coach brand pformation journey.

Coach announced a series of brand pformation plans in June last year, pforming the brand positioning from "accessible luxury" to "modern luxury" lifestyle brand, and hopes to win more consumers through the pformation of products, shops and marketing.

Why does the US luxury brand, which has its own official shopping website, cooperate with Tmall? Coach replied that it hopes to "display its modern luxury brand image and products in the mainland of China through the use of Tmall's huge online visits, and further enhance brand awareness."

A luxury industry insider told reporters, "influenced by other light luxury, fast fashion brands, Coach's offline stores are under greater pressure. For the Coach seeking breakthrough in pition, Tmall traffic is currently the largest in China's Internet platform, and the introduction of traffic through Tmall's third party platform is the best choice for Coach. After all, there are many fake commodities on the vertical luxury business platform, and Coach will not cooperate with the latter."

Coach also told reporters that it has been an important strategic partner with Taobao for a long time. Since 2011, it has actively joined hands to fight counterfeits. The two sides signed a new memorandum in December 2013 to deepen cooperation in anti-counterfeiting.

For the relationship with Tmall official flagship store and official website, Coach said it was the former "will expand the Coach online channel", the two "complement each other", Tmall flagship store also provides the link of the official website, consumers can go to the official website to learn more about brand, marketing activities and other aspects of information.

Is it other than Tmall?

Will there be a similar shop opening plan?

In reply, Coach said, "Tmall flagship store is currently doing well". At the same time, it said that according to the plan, Coach Tmall official flagship store will carry out promotional activities similar to the physical store (for example, two winter and summer promotions each year).

"From the whole environment, with the development of Internet and mobile Internet and its impact on people's life and consumption, and the rise of new generation of consumers, luxury brands' views and actions in the field of electricity suppliers are not the same as they were a few years ago." the luxury industry insiders said that compared with the previously expensive luxury brand, the online shopping platform may be cold. Now people are accustomed to online, mobile terminal consumption, Burberry, Estee Lauder's La Mer and many other high-end cosmetics brands have been settled in Tmall, which may be one of the reasons why Coach once again entered Tmall after several years of preparation.

How deep is the water for 1 months?

In 2011, Coach was listed on the stock exchange of Hongkong and became the first US registered company in Hongkong.

Subsequently, it was online with Tmall (formerly Taobao mall).

It is easy to go online in December 12, 2011.

"This brand new online store will help us understand the needs and preferences of domestic online shopping customers and accumulate valuable experience and insights in the field of e-commerce in China," Coach said at the time.

However, only a month later, the flagship store was closed, and consumers and analysts speculated about the withdrawal of Coach.

Coach later explained that according to the agreement, the platform only set a one month operation period (December 12, 2011 to January 15, 2012), and did not involve the so-called "closure" and "abort" later.

"The last cooperation with Tmall was mainly to celebrate one of the 70th anniversary series of activities and the first online shopping platform in the Chinese market.

At the same time, we also hope that

Contact and understand the needs and preferences of domestic online shopping customers, and accumulate valuable experience and insights in the field of e-commerce in China.

Coach said to our reporter.

The above "valuable experience and insight", Coach said, including: the peak period of online passenger flow, customer preferences, and how to provide customers with the most convenient shopping experience (reducing two steps) and so on. Of course, part of the experience was accumulated again after the launch of Coach official online store in November 2012.

In fact, in 2009, the official website of Coach was launched on the resumption of Chinese business, but there was no product sales function at that time.

After testing the water at Tmall flagship store, Coach developed its shopping function on the basis of official website in November 2012.

"These experiences are very important for us to formulate and implement a set of strict standards to control the whole online shopping process and customer experience.

It is very important to control the interaction links between online platforms and every consumer, including website visual design, shopping experience, order fulfillment, delivery and after-sales service, "Coach said.

Channel strategy change?

Reporters noted that in August 31st, Coach has just closed the flagship store in central Hongkong, and is also testing on the same day at Tmall Coach flagship store. Does this mean that the channel strategy of Coach has changed in China?

For the above flagship store closures, Coach said that the renewal and optimization of the store is an important part of brand pformation, and mentioned that "Coach China region (including the mainland, Hongkong and Macao) has a net increase of 18 new stores in the 2015 fiscal year compared with the previous fiscal year".

"Online stores and physical stores can meet the needs of different consumers."

Coach said that as of the fourth quarter of fiscal year 2015, Coach has operated 151 entities in 55 cities in mainland China, while the official website has sold Coach products to 300 cities in China. "Tmall official flagship store will provide products for customers while expanding services to cities without Coach entities."

"To balance the online sales and consumption experience of luxury brands, Coach is trying to build online and offline seamless connections."

Yang Baoyan, President and chief executive officer of Coach China, told reporters earlier that, for example, as long as it is purchased in official channels of Coach, whether it is online or in a physical store, ordinary consumers can enjoy 1 years warranty service and free cleaning service in any store for Yann.

In fact, compared with other luxury brands, such as the entanglement and conflict of digital domains such as electricity providers, social media and so on, such as Phoebe Philo, creative director of C e line, once said, "I'd rather run naked on the street than join Facebook". Coach has always been the pioneer of luxury brands in the field of electric business development. As early as 90s (1999), Coach has opened an online store in the United States, and subsequently opened an e-commerce service in Japan.

In China, besides the official website, Coach has also made rapid progress in social networking. In November 2012, its number of micro-blog fans was around 540 thousand, and now it has nearly 2 million micro-blog fans. On WeChat platform, consumers can also browse, search and purchase products directly.