How Shiseido is planning to thrive as consumers change the way they buy beauty products

How Shiseido is thriving in an ever-changing beauty purchase journey

Japanese beauty brand Shiseido is well known for its cutting edge approach to both product and communications but keeping up with consumers is still a challenge.

The company recently announced a major investment into building a Global Innovation Centre (GIC), on top of investments into a travel retail HQ in Singapore, where ad campaigns like High School Girl in 2015 were way ahead of the zeitgeist.

Moves like this and more are needed, according to Pranay Mehra, vice president of digital and e-commerce at Shiseido Asia Pacific, as the needs of its target audience are more complex than ever.

In particular, the brand has had to shift to become more digitally-minded. “Our customers’ needs and demands are ever-changing. We need to be a step ahead of our customers, which means anticipating their needs, delivering and providing them with value-added brand experiences wherever they are,” explains Mehra.

He says that the first step has been connecting better product information, so people can make better decisions, while the brand has also been heavily invested in creating consistency of experience across online and offline. He says the brand is now at the next step, a turning point in its strategy, as customers are demanding more human and customized experiences.

“No aspect of beauty and retail has changed more than the purchase journey. Today’s most powerful channels for discovery, research, consideration and conversion have all evolved in the last decade. Social media has changed the ever-complex purchase journey; discovery has replaced loyalty."

"Apart from beauty retail in our brick-and-mortar stores and e-commerce platforms, we are also seeing the potential for social commerce. By combining digital technologies with our business, we are creating new products and consumer experiences,” he adds.

The need to be creating e-commerce strategies is a ‘do or die’ situation for brands. While Shiseido is racing ahead on looking at technology, it says it uses its traditions and ‘spirit’ to ensure it doesn’t run away with irrelevant strategies.

“Any brand that is not e-commerce enabled is no longer relevant to the consumer – a website without the opportunity to purchase and act creates a negative brand experience. E-commerce, among other digital technologies, is a key touchpoint that allows customers to experience brands outside of the typical brick-and-mortar stores," he explains.

"However, businesses have to ensure that the consumer experience is personalized and relevant. Shiseido does this by incorporating our spirit of ‘Omotenashi’, a tradition of hospitality that puts the customer at the heart of everything we do.

He continues: "With more customers shifting their shopping online, this has evolved the way we maintain our relationships with them while keeping our philosophy. Today’s customer is always on – they are deciding when to engage with the brand, a decision that is no longer restricted to store operating hours. We are strengthening our solution through personalisation, to provide value according to our consumer’s individual needs."

As with many brands, this strategy is not just about directing people to its own e-commerce spaces but understanding how Shiseido fits into the wider e-commerce ecosystem via partnerships. An important part of the partnerships and marketplace model for brands is getting the right agreement in place with respect to sharing data.

“Other areas of focus are strengthening partnerships with major e-commerce players in the region, integrating in-store customer data and understanding our customers with a 360 view, respective of her customer journey and points of interaction. We are empowering our customers to make their purchases at their convenience. Having an online presence for our brands – whether through partnered or owned stores – is absolutely crucial to enable this," says Mehra.

"At the end of the day, the average consumer is looking for a streamlined purchase journey; one that makes it easy to buy and that begins where the customer is most active and engaged. A straightforward purchase journey often makes a great brand experience. Brands need to understand and seize this opportunity and have a clear e-commerce strategy between brand.com, social commerce and marketplaces,” he adds.

In order to keep up with super-fast consumer changes, marketing and digital talent at brands has to evolve. The Drum’s Marketer of the Future series seeks to understand what that means to different brands. For Shiseido, it means investing $130 million USD in talent and leadership development, as well as innovation and growing its capability in Asian consumer insights.

“We also value leadership diversity and local expertise. Our all-rounded talent base brings different perspectives, experiences and skills to the table, ensuring that our diverse customer base is represented," explains Mehra.

"At the same time, we are business enablers. My team is made up of change agents and digital experts. As much as my team needs to be digital subject matter experts, each individual is also a change agent, helping the brand and country teams sharpen their focus on the consumer and be relevant on all digital platforms that the consumer uses. Attitude and agility are key traits we are looking for in new hires."

The investment isn’t just internally, as Shiseido needs to partner with outside organizations to scale-up its digital efforts. Mehra describes these partnerships as needing to be ‘enterprise-grade’.

"At Shiseido, we have extremely talented marketers, business leaders and digital experts; but to activate our efforts at scale and quickly, we need to partner with the likes of Accenture, Salesforce and others, to build various technology stacks that enable us to be in touch with our consumers at all points. Similarly, we partner with Alibaba Group in China and South East Asia for our e-commerce endeavors.”

As for even further into the future, Mehra says artificial intelligence (AI) is an important tech development that the brand is keeping an eye on. He gives the example of its acquisition of AI platform Giaran, which it bought to help gain a closer relationship with younger buyers.

“AI is definitely at the top of every brand’s radar. Today’s fast-changing market, the continuous evolution of the product and consumer-centric innovation is key to deepening relationships with our consumers and finding new fans. Our younger consumers prefer to shop online and try new technologies, bypassing the advice offered by physical store sales assistants. Shiseido has been investing in a couple of technologies to offer our customers the benefits of AI and other emerging technologies," he says.

"Take our acquisition of Giaran for example – leveraging simulation AI technology, our customers are now able to use their mobile devices or desktops to apply and remove makeup in a virtual environment so they can see how they appear before making a purchase. Technology tools such as this Virtual Try-On can be embedded into the brand’s e-commerce experience, bringing the consumer even closer to an in-person experience while engaging with the brand on their personal devices."

Ultimately, Mehra believes streamlining data, internet of things and AI will be how it creates the best experience for its customers and these things will be at the route of all its development as it tries to anticipate what customers want.

This is part of The Drum's Marketer of the Future coverage for 2019. You can read our coverage here.

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