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How Chinese jeweller Ideal transformed staff into live-streaming KOLs

Shenzhen’s multi-brand jeweller Ideal has transformed its 18-year-old traditional business model to a New Retail business virtually overnight in light of the coronavirus crisis. 

The retailer rolled out a transformation initiative dubbed “Thousand People, Thousand Stores” by establishing ‘online cloud stores’ through live streaming, turning its ranks of sales associates into live stream broadcasters. 

Transforming the traditional landscape

The jewellery industry traditionally has a high dependency on physical brick-and-mortar outlets due to the nature of the high-ticket items it sells. However, with the pandemic forcing stores to shutter and consumers to stay home, Ideal fast tracked its New Retail plans originally scheduled for launch in May to navigate the coronavirus crisis in February. 

With several brands under its umbrella, the group had first trialled community marketing with its sister brand Cemni where it garnered more than 100 fan-community groups engaging with more than 50,000 people within three days of launching online. The retailer has admitted it was difficult to turnaround multiple subsidiaries and sub-brands, resulting in a huge test of agility and resilience as it created a virtual ‘store’ experience to replace physical shops.

The push to go online was undoubtedly driven by the digital-savvy Gen Z consumers in addition to the rising competition from decentralised D2C jewellery brands. Shifting its focus from its traditional business model, Ideal had developed a new younger range of fashionable jewellery pieces, different to its offline offer, to attract a new customer segment online. Its brand-new product selection showcases fine jewellery pieces at an economical price point starting at RMB1000 (US$141), with a diamond ring valued at RMB3000 ($424). Ideal also plans to introduce more luxurious and high-value pieces into the mix as its client base matures with a stablising spending power. 

One for all, all for one

The transformation of jeweller Ideal’s physical store network into an online business involved transitioning its in-store sales staff to become live broadcasters, each managing their own ‘store’. Ideal chose to partner with YouZan, a SaaS retail-software and service provider that builds mini programs within WeChat, which enable brands and influencers to sell natively within the platform. Using YouZan’s platform as a virtual warehouse, its retail stores and sales associates can now collectively share the total warehouse inventory nationwide.

The brand curated most marketable products for its online entity and had set up sales associates with YouZan accounts to transact through their own private domains within their WeChat community. Under the new business model, sales associates earn a commission ranging from 10 to 50 per cent on each sale, a huge jump from the original 3 per cent an employee would have received from in-store sales. With high incentives set in place, Ideal hopes to encourage its sales associates to be more aggressive with their selling. Very early results show more than 2000 pieces sold, achieving more than RMB2 million ($282,000) in revenue. On Valentine’s Day, the brand also sold a 5.01 carat diamond ring for RMB99,000 ($14,000) online.

To maintain the interest of its franchisees, Ideal has also broadened its transformation strategy to include its partners into the New Retail system. Franchisees’ sales staff are incorporated into the New Retail model, and will not need to carry the cost of goods or the risk of returns.

From sales associates to live-streaming KOLs

IiMedia Research predicts live-streaming e-commerce will hit RMB916 billion (US$129 billion) in value this year and reach 526 million users online. Ideal transformed its sales associates into KOLs firstly by nurturing and empowering them through online training courses. Expanding its existing online business school from 2010, the retailer has supercharged its course-based system to launch more online live courses nationwide. A grading system for sales associates has been set in place with training content customised to their level. 

Ideal has also partnered with an agency managing Tmall live broadcasters to direct and guide its sales associates. Jewellery expert and KOL broadcaster Lan Congge was recruited to train and empower Ideal’s employees in how to successfully upgrade their broadcasting skills to maximise sales.

Localised live streaming

Jeweller Ideal has tasked each regional team with pushing out and endorsing the group’s New Retail plan among its employees. Regional stores have curated their own selections according to the consumption characteristics of their local customers. Yet, certain cities with a stronger consumption power are directed to specialise in content creation whereas stores in prefectures are to create more personal and interactive content during live streaming by acting as a personal stylist, offering peer advice and using discounts and promotions to attract new sales. 

As older members of the community are synonymous with existing customers, sales staff look to retain their client base through promotional activity such as birthday offers and personalised recommendations. To attract new and younger clients, sales associates are encouraged to create an interactive and dynamic selling atmosphere such as using flash sales and QR codes for direct orders as a means to shorten the conversion path.

Discovering Douyin

Bytedance’s short video platform Douyin currently reaches more than 400 million daily active users making it one of the most powerful social-media platforms in China. The unique selling point of jeweller Ideal has always been storytelling, so now the company plans to begin marketing the story of the brand and its culture on Douyin. 

As part of its strategy to boost exposure and manipulate its algorithm, the aim is to have each virtual store follow the brand’s main account. From there, Ideal’s official account will reverse-generate interest to each of its individual smaller stores. The Douyin profile will provide content support for thousands of its virtual stores to drive traffic and popularity and in turn boost sales. 

However as Douyin’s e-commerce features are still maturing, Ideal will focus for now on leveraging the platform’s user base to promote its brand culture, while pushing the platform to develop e-commerce as part of its longer-term plan.

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