Affluent Chinese shoppers are influencing Harrods 200 million pounds renovation

London - I last visited Harrods a fortnight ago, to look at the fashion collections and as part of my annual tour of department stores pre Christmas. En route to the lower ground, where designer menswear is housed, I passed the Diana and Dodi memorial at the base of the Egyptian Escalator, where a horde of Asian tourists were taking photographs and obligatory selfies.

I mention this because Harrods is prime destination retail for Chinese shoppers, and as London's largest luxury shopping mecca - trading over 1 million square foot - the store is making all the necessary adaptations to its Knightsbridge flagship to capitalize on the trend.

Last month Harrods announced it was undergoing a 200 million pound, three-year renovation project, the first of its kind in its 180-year history. Speaking to the South China Morning Post, managing director Michael Ward said the revamp is aimed at maintaining Harrods’ appeal for tourists.

Affluent Chinese shoppers outspend the British

“Our Chinese and Asian customers are extremely important to Harrods, and so are considered part of our redevelopment plans,” he told the Post. Affluent Chinese shoppers have long been outspending their British and European counterparts.

Ward reported in Jing Daily that the refurbishments were designed to accommodate their global customer, but specifically stated the Chinese shopper is becoming increasingly “discerning”, especially in the fine watch and jewelry departments. To cater to Chinese customers, the department store has more than 200 Mandarin speaking staff and more in training, and they accommodate Chinese payment service Alipay for shoppers. Tencent’s WeChat Pay will also soon be introduced to the store.

While this new evolution of Harrods will involve many transformations, the brand is still more focused than ever on promoting itself as an essential part of a famous UK tourist destination. Chinese tourism to Britain experienced an uptick following the Brexit referendum as shoppers sought to benefit from the declining value of the pound. In the first six months of this year, Chinese spent more than 231 million pounds in the UK, according to VisitBritain.

“We do not make large adaptations specifically aimed at Chinese customers, because we want to celebrate our brand identity and Britishness,” Ward said. “If you come to London, you don’t want to see something that’s from your country: you want to celebrate everything that’s British, and we think that’s important.”

According to Jing Daily Harrods maintains a presence on WeChat where they share promotions and videos of events at its London location. Ward cites its recent Dolce & Gabbana fashion show, broadcasted on its WeChat and Weibo platforms, as a particularly successful example, especially in connecting with its Chinese millennial customers.

Ward said Harrods is also looking at expanding its print magazine to mainland China next year after already pivoting to shoppers in Asia, specifically making it available to consumers in Hong Kong, Singapore, Thailand and Malaysia. The brand is considering an online format for the mainland Chinese expansion of Harrods Magazine Asia to accommodate the increasingly digitally savvy consumer.

“It’s all about having personal relationships with the store,” he said. “There is no length we won’t go to for our customers—from securing the most coveted products from leading luxury brands to creating inspiring concepts in-store and making sure our customers have whatever their heart desires, no matter where they are in the world.”

China is currently the largest international market for Harrods, while Hong Kong is its largest Southeast Asian market and fastest growing. Harrods claims that research shows one in every 5 pounds spent by Chinese visitors to London is at Harrods.

Photo credit: Photo: By user: Sokkk y (Own work) [Public domain], via Wikimedia Commons