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In our last Shan Hai Jin Media and Consumer Insights, we noted that as the effects of Covid faded, seasonal factors took over the changes in media behavior. With the summer 2024 travel boom, consumer media engagement has fully recovered. In this issue, we analyze shifts in consumer-brand interactions and their impact on brand competition, helping brands seize market opportunities for sustainable growth in today's media and consumer landscape.
Key Takeaways
Outdoor activities and the cultural tourism market drive growth:
• Outdoor reach increases, interaction drives sales.
① In summer 2024, peak travel and outdoor activities offered brands with a change to increase exposure and interaction.
② The accompanying behaviors of outdoor ads, steer consumers to various platforms and stores, effectively promoting purchases.
• In the upcoming holidays, the cultural tourism market may continue to be an important incremental scene.
① Consumer spending habits are evolving, with saving prioritized and impulsive buying reduced.
② Rising savings demand has tightened consumer budgets, leading to more cautious spending on goods and investments, but travel and vacations are gaining popularity, making cultural tourism a key area for experiential spending.
Brand consensus again become the key to driving the post-chain of consumer journey:
• Brand consensus in the "exposure domain" is again propelling "sales domain" growth.
① By the summer of 2023, the omnichannel brand experience had not fully recovered, with media effects still showing the “operations domain” was driving the “sales domain.”
② Offline restoration has led to a fundamental shift, with media touchpoints in "exposure" and "sales" growing in tandem, "operational" domain weakening, and brand consensus increasingly tied to business growth.
③ Physical stores provide diverse scenarios, notably aiding user retention through repurchase and breaking price wars by facilitating spontaneous orders, underscoring the need for brands to protect offline channels.
• How to effectively address the challenges brought about by brand attention dilution has become a significant issue for both international and domestic brands in the current market environment.
① The number of brands consumers awareness and usage has decreased, with international brands experiencing a greater decline and facing larger performance pressures.
② At the same time, domestic brands are also facing severe challenges in terms of user retention. Although they managed to achieve sales growth through online touchpoints during the covid, in the long run, these brands clearly lag international brands in maintaining consumer mindshare and loyalty, resulting in a higher risk of customer churn.
③ As offline channels fully recover, the return of omnichannel brand experiences raises consumer expectations. International powerhouses, which generally possess stronger brand equity, further extend their advantages in maintaining consumer relationships.
The summer travel boom has increased the reach of outdoor advertising, and the diversification of OOH accompanying behaviors has led to more sales opportunities
In 2024's peak summer travel season, China's railways transported 887 million passengers from July to August, a 6.7% increase, and civil aviation carried over 140 million, averaging 2.289 million daily, up 12.3% from 2023 and 17.7% from 2019.
The popularity of summer travel also boosted the reach of outdoor advertising. Data from Shan Hai Jin shows that while the monthly reach of outdoor advertising in home scenarios decreased significantly, outdoor scenarios increased significantly. Transportation and consumption scenes tied for first place, providing advertisers with more marketing opportunities.
It is worth noting that OOH is highly engaging for consumers, with 70% interaction rates, of which 39% lead to online searches and 18% lead to sales, according to Shan Hai Jin. It's also diversifying with new formats such as naked-eye 3D screens and pop-up stores and accelerated its integration into the entire media chain.
A further comparison between the interactive and exposed-only audiences shows that engagement with OOH is an effective driver of purchase behavior. In terms of types of short-term consumables purchased, as well as the price of durable goods, the former is significantly higher than the latter.
As consumer expectations change and consumption priorities shift, the cultural and tourism market will continue to be an important scenario for incremental consumption
Amid the challenges of stimulating domestic consumption, Shan Hai Jin has observed fluctuations and a decline to the same period last year in the proportion of consumers with optimistic expectations for the future. The change in expectations has led to changes in consumer spending patterns:
Spend when necessary, save when possible
Consumers are balancing the concept of thrift with a willingness to spend on quality, while also curbing impulsive purchases. This requires brands to create more functional value or emotional experiences beyond cost-effectiveness to drive final purchases.
Experience consumption takes precedence over physical goods
Consumers’ savings demand is significantly increase, reducing spending on goods and investment but boosting travel and vacations by 5%, highlighting the shift towards enjoyable experiences is expected to continue, emphasizing the cultural tourism market's role in incremental consumption.
Another key to achieving incremental growth is leveraging the brand consensus of "exposure domains" to drive growth in "sales domains"
In the early post-Covid period, although consumer consciousness gradually thawed, the full brand experience was still recovering. The role of media was still represented by online experiences that sparked interest and content to drive sales. By summer 2024, consumer behavior shifted significantly — with the roles of media touchpoints in "exposure domain" and "sales domain" enjoy a synergic increase, while the "operational domain" weakened. The connection between brand consensus and business growth becomes tighter.
Offline consumption recovery boosts brand exposure and interaction, offering marketing opportunities and expanding consumer purchasing scenarios, which benefits brand sales.
Offline stores are superior at encouraging repeat and experience-based purchases, effectively retaining customers and overcoming price competition. This advantage offers growth opportunities for brands with extensive offline channels but also requires stronger protect for physical channels.
The impact of brand consensus on sales continues to exist, with international and domestic brands each having their challenges in the short-term and long-term growth competition
As “brand-sales synergy” regains focus, brand consensus impacts business growth, with short-term effects on sales performance and long-term influences on loyalty and sustainable growth.
From 2022 to 2024, numbers of brands awareness and usage for 18 categories declined by 24% and 12%, showing a coordinated decline in brand awareness and usage.
Domestic brands, with nimble marketing, suffered less decline, swiftly pivoting to online for "effect-driven sales" and "sales-driven branding."
In contrast, international brands saw a greater decline in the number of uses, consistent with some statements from the finance reports of international brands, such as L'...l, Es...der, and Pro...mble, which faced steeper declines in the Chinese market, with some reporting negative growth or reduced growth forecasts.
Switching to a long-term operational perspective, international brands have further expanded their advantages in maintaining consumer relationships across 18 categories.
After the full recovery of offline consumption, consumer expectations for brands have risen. Major international brands have seen a 3% increase in mental growth and a 5% boost in repeat purchases.
For domestic brands with declining loyalty, more effort is needed to solidify long-term brand recognition and maintain online marketing traffic while preventing erosion.
Source: GroupM Shan Hai Jin, China Railway, Umetrip, Related finance report
Keira Wu
GroupM Knowledge Analyst
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