How Sales Advisors Can Help Brands Succeed in the Current Hong Kong Luxury Market

Hong Kong Luxury Market

How Sales Advisors Can Help Brands Succeed in the Current Hong Kong Luxury Market

Blog Posts / Wednesday, 10 August 2016 - 18:11

In the past three years, the luxury market in Hong Kong has changed almost beyond recognition. Formerly the ‘go-to’ location for luxury shopping in Asia (predominantly for Mainland Chinese), it has fallen from grace with a thud, and it is proving difficult for luxury brands and their Hong Kong staff to adjust to this new state of affairs.

The decline of the industry has been influenced by a number of factors: tensions between Hong Kong and China, more adventurous and price-sensitive Mainland Chinese consumers traveling further overseas, the anti-corruption crackdown, greater visa restrictions, and price adjustments that have made Hong Kong relatively more expensive than it used to be. The cumulative effect of all these forces has dramatically reduced the appeal of Hong Kong as a luxury shopping destination, and the results are visible everywhere. Walking the streets of Hong Kong, one used to see queues of people snaking out the door of the maisons. Now, many of those same stores are empty.

Naturally, this has had an impact on sales advisors, who must learn to cope with a very different in-store environment.  Footfall is down, and the days of large groups of Mainland Chinese ‘pointing and buying’ are over. This store environment requires a new set of skills, focused on creating memorable and emotionally-engaging customer experiences.

From market research studies we run with affluent consumers, we know that strong customer relationships begin with experiences that feel personal. When traffic is down and conversion rates are low, the ability of the sales advisor to establish an emotional connection with the customer is crucial. Proactive and energetic teams who relate to customers in an empathetic manner are needed, not only to close sales, but to transform satisfied customers into enthusiastic brand ambassadors, transactions (if any) into long-term relationships.

From our Customer Experience research, we have been able to identify certain behaviours that a) have a measurable impact on purchase intention and advocacy and b) are, generally, not well-executed by sales advisors in Hong Kong.

Making natural small-talk

Beginning the interaction with something light-hearted helps to start a conversation and develop rapport. It also encourages the customer to feel comfortable, which in turn increases the chance of purchase. It can be something as simple as noticing an umbrella and asking if it’s still raining, or offering to take the customer’s shopping bags from them while they browse.

Putting the ‘who’ before the ‘what’

Often, the first question sales advisors ask is ‘What are you looking for today?’ Whilst this is something that should be established, it should not start the conversation. First, the sales advisor should try to learn a bit about that person, such as the styles they typically prefer or perhaps brands they normally go for. Indeed, a sales advisor with wider industry knowledge may be able to identify the brands the customer is already wearing, which will help them understand that individual from the outset. Information like this can help the sales advisor get a better understanding of the person they have in front of them, which in turn enables them to make suitable recommendations and present cross-sales items relevant to the individual.

Telling  a meaningful story

Sales advisors often talk knowledgeably about products – the design, features, functions, etc. But they often forget to tell the customer about the unique qualities of the brand. Customers are often drawn to a brand because of its heritage, lead designer, or inspiration, but these intangible brand assets are all too rarely emphasized by the sales advisor. In a recent study, we found that telling the customer a story about the brand was twice as likely to make the customer into an ambassador for that boutique. By failing to tell the brand’s story, sales advisors are passing up the chance to generate precious word-of-mouth both online and across affluent social networks.

Closing the sale convincingly

When it comes to closing the sale, we often see that  Sales Advisors ‘tick off the boxes’ according to their training, but their actions do not have much of an impact on the final decision of the customer. Certainly, whether or not a purchase is made will be heavily influenced by the three earlier points detailed above, but it is amazing how much of a difference a few simple, personal words can make at the moment of decision. Complimenting the customer on their choice or encouraging them to feel excited about owning the item can easily inspire a shopper on the fence to take the proverbial plunge.

However, not only does this personal gesture seldom occur, but our work shows that many customers who have a very good overall experience are not clearly invited to purchase at all. This is a lost opportunity for the sales advisor, the boutique, and the brand.

In over a decade of work across the luxury sector, we have found that these four subjects are often weak points in the sales ceremony. These behaviours are not easy for sales advisors, as they entail stepping out of their comfort zone. Teams must be supported by their employers and given focused training to learn to interact this way, and this is even more true in the case of Hong Kong, where by and large sales advisors are accustomed to making a tremendous volume of sales without using any of these skills. These sales advisors are used to customers who point and purchase, and have not been prepared for a luxury market that requires much more personal, individual interaction. For a boutique to flourish in the new Hong Kong, brands must provide their retail teams with tools, training, and incentives that shift the focus from closing the sale to creating a distinctive, meaningful and memorable experience for every customer.