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Red Star To Red Flag: Macy’s Targeting The Chinese Market?

Is Macy

For years, American retailer Macy’s has adopted several strategies to entice foreign tourists to spend more at its flagship location in New York’s Herald Square, from discount cards for international shoppers to promotions tied to free coupon books. As the global financial crisis bit down on New York tourism in the last year, there are signs that stores like Macy’s may be looking abroad to markets they have never before targeted specifically, namely China, where the number of tourists traveling overseas has skyrocketed in the last 20 years. Cities like New York, where travelers from places like mainland China tend to spend most of their time shopping, are expected to benefit the most from the oncoming wave of Chinese tourists, and since the relaxation of some travel restrictions last year, a noticeable rise in Chinese tourists has already been noted in New York — where Chinese spend an average of $2,200 each, making them the city’s most profligate foreign tourists.

With its size, midtown location and historical pedigree, Macy’s has always appealed to foreign tourists looking for a “New York shopping experience” (or those who just want to take advantage of a comparatively weak dollar to stock up on clothes). If Macy’s truly wants to target the Chinese market, and get a larger slice of the Chinese tourist dollar, they would be well advised to learn a few cultural particularities about Chinese tourists:

1.) Chinese travelers love giveaways…and will go out of their way to get them

Chinese tourists love to go on luxury shopping sprees when they’re overseas, but they also love “freebies.” By simply offering small items like teddy bears, small bags or keychains to tour groups, department stores like Macy’s can capitalize on the influx of Chinese tourists while remaining sure that these tourists will be unlikely to simply take the free gifts and leave. By positioning the giveaway table or stand near high-priced items that are popular with Chinese tourists, such as luxury handbags, wallets, or jewelry, Macy’s could benefit from the inevitable long lines and attendant certainty that some tourists would wander off while waiting for their free gift and purchase some high-priced items.

2.) Chinese tourists may not expect, but highly appreciate, extra steps taken to accommodate them…Language-wise

In the 1980s, as Japanese tourists began to head overseas in exponentially higher numbers, airports, major hoteliers and tourist sites began to include Japanese-language signs to accomodate this important (and free-spending) group. Retailers like Macy’s would be well advised to take this one step further. By aggressively targeting younger Chinese travelers through Chinese-language Internet campaigns, perhaps by outsourcing this marketing work to university students in China — who work cheap and know the fast-moving trends taking place in the notoriously fickle Chinese 18-35 group — Macy’s can position itself as one of the “must-see” sites in Manhattan. Even though most Chinese university students do not have the means to travel overseas just yet, word of mouth travels fast, and the rising number of Chinese students attending universities in America is rising year on year.

Chinese-language online campaigns can work wonders — just ask companies like BMW. As I said, Chinese travelers may not expect signs, guidebooks, coupon books or even greeters in their own language when they visit Macy’s, but they will greatly appreciate them — and respond with their wallets.

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3.) Discounts and promotions are a plus

Targeting Chinese tourists without alienating other foreign tourist groups may be a challenge — however, it can be done. Chinese tourists, like most other tourists, love promotions. Macy’s could give extra attention to promoting its sales or promotions by distributing Chinese-language coupons or promotional materials on Mandarin-language Gray Line bus tours or sending these materials to reputable tour guides in major Chinese cities like Beijing and Shanghai.

Chinese tourists are, essentially, the same as most other foreign tourists — they come to places like New York to shop and sightsee. However, Chinese tourists, like the Japanese and Korean tourists that predated them, tend to lean slightly more towards the “shopping” side. Unlike some other foreign tourist groups, Chinese tourists do have some cultural particularities that should be taken into consideration. China’s middle class is growing so fast — and is so amorphous and complex in their buying habits — that many American retailers have no concrete idea how to maximize their appeal to the Chinese tourist, nor do they know how to attract Chinese tour groups to spend more money. By paying a little more attention to the Chinese middle class — reading more news stories, doing a little research, learning a little more about the culture — retailers like Macy’s can benefit from China’s economic boom while ensuring that returning Chinese tourists — hopefully lugging massive Macy’s bags through the airport — have great stories to tell their friends back home.