PROFILE

Franklin Chu

Managing Director, Azoya USA
Franklin is a member of RetailWire’s Brain Trust and often contributes to leading retail trade publications including Apparel Magazine, Chain Store Age, Retail TouchPoints, SmartBrief and WWD. Additionally, Franklin serves as President of Sage Capital Group Inc. a private equity and investment management firm. Franklin is a graduate of Yale University and Harvard Business School.
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  • Posted on: 12/28/2017

    U.S. retailers in dire need of growth look to the China market

    Thanks for sharing the article and insights from “Rules of the Road.” You might find this article and insight of interested too - "7 e‑commerce questions to ask before expanding to China."
  • Posted on: 12/28/2017

    U.S. retailers in dire need of growth look to the China market

    Among retailers, I always suggest starting with popular brands. Once you have successfully established your market awareness, you can promote some niche brands. While Chinese consumers certainly like domestic retailers (as Singles Day results consistently prove), they also seek the assortment variety and uniqueness of foreign products.
  • Posted on: 12/28/2017

    U.S. retailers in dire need of growth look to the China market

    Cross-border e-commerce remains one of the fastest growing retail channels in China, as foreign products remain attractive among China's growing middle class for their better quality and brand prestige. Unlike traditional imports, cross-border e-commerce faces fewer market restrictions, and allows retailers to test the market with less risk and investment. Top selling categories for cross-border include: nutritional supplements, mom and baby care products, cosmetics and personal care. Certain grocery categories are also emerging in popularity due to advancements in the supply chain and near-shore warehousing.
  • Posted on: 12/27/2017

    U.S. retailers in dire need of growth look to the China market

    Yes, it's true that not every product is going to succeed in China. It is important to research the popularity of the products you want to sell. Selling less-popular categories or marketing unknown brands in China can be risky. Finding the suitable marketing channel for your category is also key for growth. Also consider fulfillment, price and legal elements, among others, before making your decision. Although China is a market with great potential, it is also complex, so thorough planning is essential for success.
  • Posted on: 11/03/2017

    Can live streaming make online customers feel like they’re in-store?

    Livestreaming is quite popular in China right now, especially for cross-border e-commerce. Livestreaming gives the audience a chance to see the actual products and physical stores, which helps to enhance authenticity and build consumers’ trust towards a retailer and their merchandise. Metrics such as the number of views, sales records, increased numbers of followers and the volume of comments all indicate whether a livestreaming session is successful. Last month, UK retailer Feelunique invited two famous beauty opinion leaders in China to visit their pop-up store in the UK and livestream their experience to a China audience. This two-day event attracted tens of millions of total views and offered exclusive sales deals during the livestreaming session, enhancing engagement between the retailer and its fans, while boosting brand awareness of Feelunique in China.
  • Posted on: 09/25/2017

    Why are marketers increasing their online influencer budgets?

    While there is no best way to compensate influencers, certain approaches can minimize your risk and maximize your return of investment. First of all, define your objective before working with influencers, called key opinion leaders (KOLs) in China. Objectives such as increased brand awareness, user growth or sales growth require different strategies. Secondly, understand the KOL’s audience to ensure it aligns with your target market. Thirdly, manage your expectations; retailers should have modest expectations about the outcomes before working with KOLs. The challenges include:
    • The need to influence the influencers: KOLs cannot be dictated to do things; they are a partner to achieve your goals rather than your employees.
    • Strategic fit: Entering into terms with KOLs can be very tricky. Before you really tap into their followers, understand the upfront expenses. Some KOLs don’t really understand the consumption power of their followers, so test campaigns are necessary to research the segmentation of their followers.
    • Educating KOLs: While it can be time consuming, retail companies must educate KOLs about their brand and retail business to ensure they understand your objectives.
    • Ask for proof: While you don’t know a KOL’s historical campaigns, data always tells the truth. If you have trouble evaluating the outcome of a campaign, ask the KOL to provide more information on historical campaigns before making a decision.
    Companies should develop a strategy to evaluate the KOLs and campaigns and design terms based on the KOL’s understanding of your audience.
  • Posted on: 08/15/2017

    Should Walmart buy Birchbox?

    Buying Birchbox would further strengthen Walmart’s e-commerce strategy to compete against Amazon by helping Walmart attract younger and higher-income consumers. Walmart’s world-class fulfillment and operations could strengthen the awareness and reach of e-commerce brands like Birchbox. Walmart could also help brands expand their omnichannel experience, including in-store pick-up and ship from store. On the other hand, the retailers’ core audiences differ significantly. Loyal Walmart customers who value the retail giant’s Everyday Low Price strategy contrast with the relatively young, trendy and tech-savvy shoppers who buy from Birchbox, Modcloth and Bonobos. While buying Birchbox would expand Walmart’s reach, how Walmart will manage the massive traffic from different customer groups remains a challenge.
  • Posted on: 08/08/2017

    Are retailers squandering store traffic?

    One of the major differences between shopping online and offline is that customers will inevitably leave trails when they shop online: e-tailers know their home addresses, phone numbers and email addresses. Retail companies even know which products shoppers browsed yet didn’t buy. By contrast, physical retailers lack the capacity to keep track of their customers. When shoppers enter the store, pick up items and pay by cash, retailers do not capture any detailed customer profile data. In response, retailers with physical stores should monitor customer conversion to understand their silent customers and adjust their service accordingly. They can start doing this by equipping their stores with technology, including headcount devices and mobile payments. Most importantly, physical stores should take advantage of the richer, multi-sensory customer experience they can provide and embrace technology to offer personalized customer service.
  • Posted on: 08/07/2017

    Will talking about pain points make Babies ‘R’ Us the go-to retailer for parents?

    Yes, I think this approach makes Babies "R" Us stand out as a trusted resource because the retailer is not only selling products -- it is selling solutions. New parents often feel overwhelmed, anxious and even competitive with other parents. Babies "R" Us’s approach makes the retailer seem like a wise, trusted friend who deeply understands parents’ needs. The campaign embraces the fact that unexpected things will happen and reassures new parents they will be okay even when things aren’t perfect. This messaging strategy makes Babies "R" Us seem authentic, relatable and trustworthy -- qualities that Millennials appreciate. Today’s new generation of parents values honesty and wants to feel cared for and understood; this realistic campaign shows that Babies "R" Us offers empathy and relevant solutions to help overwhelmed parents relax and savor this special period of their lives.
  • Posted on: 08/02/2017

    Will Gen Z demand a new level of collaboration?

    Gen Z consumers expect and reward authenticity. They select brands and retailers that reflect their own identity, including their values and lifestyle. This trend represents an exciting opportunity for niche brands and retailers to align with Gen Z consumers by being relatable and relevant to these young shoppers. Gen Z also relies on peer recommendations rather than traditional marketing, so many retailers and brands now collaborate with opinion leaders who Gen Zers trust. These shoppers also want to be heard and receive a timely response, so retail companies should put more effort into adapting to consumer feedback to improve the shopping experience and collecting flattering customer reviews to earn consumer confidence.
  • Posted on: 07/27/2017

    Do mini makeup studios make sense for Sephora?

    Sephora’s new trial is a great example of offline to online marketing. To offer clients an omnichannel experience, retailers should think beyond content marketing and selling, and embrace unique, memorable service. Offering makeup courses to neighborhood customers is a great idea to create an exclusive, loyalty-enhancing membership experience, and it is also a valuable service for customers. However, I still think 2000 square feet is too big for a mini makeup studio. Automated shops and gyms in China take up only 100 square feet. Is 2000 square feet too extravagant?
  • Posted on: 07/27/2017

    Will dropping prices on cosmetics drive traffic to department stores?

    Dropping the price of cosmetics will certainly drive more traffic to department stores; however, it is not a sustainable, long-term strategy. In China, there is already a generation of young shoppers who can live without physical storefronts because they can always find cheaper prices online. For many young female consumers, in-store cosmetics counters are simply places to test the products and verify their authenticity. Consumers who visit department stores are no longer just looking to buy things. On the contrary, they are searching for new tricks, new experiences, and opportunities to learn more.
  • Posted on: 07/11/2017

    Can an app know a customer better than a personal shopper?

    Apps and algorithms can make better recommendations to customers and increase the chances of a sale. Retailers with big ambitions in the China market should also realize that, with more players on board, the ability to make relevant, effective product recommendations can potentially help them stand out from their competitors. What retailers can do is to provide as much consumer feedback as possible to enable such a recommendation system to work. Working with platforms that already have data on customers and similar products can also save a lot of trouble. More importantly, retailers will need an experienced local partner that understands how these technologies make the customer experience more pleasant and convenient.
  • Posted on: 07/11/2017

    Is inept forecasting holding back online fulfillment?

    The ability to see the stock level in real time is very important to planning e-commerce sales events. When customers come to an e-commerce site from different channels, the last thing they want to see is that the products have been sold out or – even worse – receive an email saying their order’s been cancelled. Being able to forecast accurately is a core capability for running a successful e-commerce business in China. Retailers would know when and where to market, and allocate a sufficient budget for each promotion. This capability can be only built upon trusted data analytics, as well as a good understanding of both marketing channels and their own supply chain capacity.
  • Posted on: 06/29/2017

    What will a Nike/Amazon deal mean for the brand and other retailers?

    The Nike/Amazon deal could only happen to Amazon, the omni-mall that is confident enough to be the only digital channel for all brands. Amazon gave Nike what it really wants: the ability to control all channels, synchronize its pricing strategy and shift traffic to channels with the highest margins. However, this isn’t necessarily what Nike really needs. Angry retailers could go to the extreme to feature other brands that have better terms and offers, which could challenge Nike’s share in the market. In China, Alibaba is also doing similar things but it has yet to make progress like Amazon. It’s terrifying to think these giant marketplaces could eventually become the "sole" channels for brands and eat away at retailers’ already-slim margins.

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