If you were to pick one resounding theme from the Top 1000 Brands event in China, it would be this: Times have changed. The auto industry is one of the few remaining “traditional” industries, according to Paul Hu, Volkswagen’s CMO of Greater China & ASEAN, but even there, change is inevitable. Ecommerce is getting bigger, and the challenges that companies like Volkswagen face now are in creating a process that will take consumers seamlessly from online browsing to an offline purchase.
“There was a time when you’d simply put your products in a showroom and people would come,” he says. “Now you have to make a lot more effort.” Speaking to Chris Reitermann, President & CEO of Ogilvy & Mather China, Hu describes how the changing commercial landscape and booming digital generation has transformed Volkswagen’s business.
“The one phenomenon we’ve been observing is that the consumers are changing,” says Hu. “First and foremost, consumers are getting a lot younger.” Research indicates that within five years, 80% of consumers buying cars will be digital natives. Which means that marketing products and brands to these consumers will be vastly different to marketing to their parents. “With the emergence of new technologies, especially big data technologies, the way we do marketing and the way we approach consumers will change fundamentally.”
Reitermann points out that fostering sustainable change in marketing practices doesn’t necessarily help to deliver sales in the short term, but Hu believes that creating brand advocates should be a long-term objective, even if it doesn’t immediately show up on P&L. “We don’t see a difference between a brand-driven campaign and a sales-driven campaign,” he says, stating that there are plenty of ways to create value-added service when selling a sophisticated product like a car, rather than simply relying on discounts, for instance, financial easing, after-sales packages, and insurance. “Marketing has to be a lot more sophisticated, by employing new techniques such as derivative service.” He is confident that this simultaneously benefits customers and protects the value of the brand.
Advertising has traditionally been seen as part art, part science, but Hu foresees a shift. “In the new digital era, science is increasingly important,” he says. “Science is playing a more significant role.” He thinks it is now necessary for brands to have a consumer data lab, in order to tap into Big Data analytics and yield genuinely useful consumer insights.
“There must be a pattern between people’s behaviour today, and their purchasing decision tomorrow,” he says. “This pattern has to be studied and established…Once the mystery of today’s online behaviour vs. tomorrow’s purchasing behaviour can be unlocked, this is a big step forward — you will actually be able to predict the sales tomorrow.”