For innovations in e-commerce, look to China, where clothing retailer Vancl is turning consumers' love of fashion and photography into a word-of -mouth marketing tool.
Vancl, known for cheap-chic duds, offers products that are less fashion-forward than those at H&M and Uniqlo. But its prices are a big draw for Vancl's following of young urbanites. And it's China's largest apparel retailer, according to iResearch.This year, the 4-year-old company launched Vancl Star, a photo blog-social networking site on which users post pictures of themselves in Vancl looks. Those with the most fans become Stars. Visitors can buy featured items by clicking on the photos; Vancl handles the sale and shipping. Account holders get a 10% commission, with some Stars reportedly earning thousands of dollars.
"I think this is a very bold move," said John Liu, assistant planner with Leo Burnett in Shanghai. "They give you a platform, and all you have to do is register. ... It's grass roots and helping people get recognized." Vancl, with annual sales of $1.5 billion, may become more familiar outside China if it proceeds with reported plans for an initial public offering soon in the U.S. intended to raise about $1 billion.
The company is also behind a high-profile outdoor campaign featuring blogger Han Han and actress Wang Luodan photographed against a white background and surrounded by personal statements such as "Love the internet" and "Love pretty clothes but love sale tags even more," along with the tagline "I am just like you. I am Vancl." The ads tapped into a wellspring of individualism among Chinese born in the 1980s, Vancl's target audience, who have fought the label of being spoiled as the first generation born under the one-child rule.
The online community embraced the ads and churned out parodies, some with "celebrities" such as Homer Simpson ("Love beer") and Paul the Octopus ("Love soccer"). Vancl's customer service focus is also unusual in China. A courier waits while patrons try on what they've ordered and takes back unwanted items. All returns within 30 days are accepted.
The approach has cut into profits but is worth it, according to Vancl founder Chen Nian. "It's quite troublesome," Mr. Chen said in an interview with China Central Television. "Not only does the courier have to spend time returning the items, but the clothes can't be resold. [But] we don't want to lose a customer over the small delivery cost of [$3 to $5]. What would you choose -- to hold on to a small amount of money or keep a customer you've worked hard to attract? It's a simple choice."