Our Leaders Exploring Edges series tells the stories of bold, future focused leaders across the Fung Group who, with help from the Innovation Catalysts at the Fung Academy, are exploring the edges of what’s possible for the future of the supply chain.
In this edition, you’ll read about Simeon Piasecki and the DX team’s journey into the complex world of social commerce in China, and understanding how to unlock its value. Unlike many of the brands served by the Fung Group, DX is all about last season. They breathe new life into quality items from brands like Roberto Cavalli, Diesel and Escada, selling them at discounted prices in their pop-up stores across China.
DX experienced great success selling in their physical stores but did not want to get complacent with their strategy, they experimented with social commerce, selling items through WeChat. It was these experiments that showed them firsthand the power of the channel. During a 3-day sales event, they sold more than 7000 items, as much stock as they would sell in two weeks instore. But the majority of items sold had a price tag of less than 100RMB.
“Higher priced items just weren’t moving, and for us these are the items that deliver the greatest value. If we could move the same volume of items over 200RMB on WeChat as we did less expensive items – that would transform our business.” – Simeon Piasecki, Managing Director DX
With a limited understanding of the social commerce ecosystem, Simeon and the DX team came to the Innovation Catalysts to help them discover how they might unlock the value of social commerce for higher priced items.
Daowen Chang from the Innovation Catalyst team worked with Simeon and the DX team to design a series of research that saw them connecting with different people from around the social commerce ecosystem to understand the behaviours and underlying values that powered people’s buying and selling habits.
Conducting more than 60 hours of research across China with WeChat dealers, WeChat shoppers, factories and physical store owners, they discovered a cast of characters with complex buying relationships where price only played a small part in the purchasing decision.
Synthesizing everything they collected through their research, it became clear to Daowen and the Innovation Catalyst team that the WeChat dealers who were most successful at selling
higher prices items had sophisticated relationships with their customers built on friendship, tailored advice and their own strong personal style.
“Because our discounted prices are one of our biggest selling points at DX, we were relying on these to power our sales on WeChat. But the discoveries from research made it clear – discounted prices weren’t enough when selling on WeChat.” – Simeon Piasecki, Managing Director DX
The Innovation Catalysts have been working with the DX team to run two different content-based experiments to help WeChat dealers who are selling their stock build stronger relationships with their customers.
The first experiment will see DX creating brand related content as opposed to discount related content. And the second will see them start to use images of real people wearing their stock as opposed to runway models.
The hypothesis here is that equipping WeChat dealers with this kind of content to post in their moments page will help them build stronger relationships with their customers.
Simeon’s tip for exploring the edges: If what you’re considering today seems crazy; it’ll probably be normal tomorrow.