Shiseido Growth Strategies and Beauty Consultants

September 10, 2015
Mizuho Securities Conference
Shiseido Growth Strategies
and Beauty Consultants
Chikako Sekine, Corporate Executive Officer
Mihoko Nagai, Vice President, Corporate Communications
Shiseido Co., Ltd.
Summary
Shiseido's medium- to long-term growth strategy
Mihoko Nagai
Vice President, Corporate Communications
Beauty consultants as key messengers of brand value
Chikako Sekine
Corporate Executive Officer
Q&A
2
Corporate Profile
3
Company name Shiseido Co., Ltd.
Registered Head Office
5-5, Ginza 7-chome, Chuo-ku, Tokyo, Japan
Foundation
1872
Incorporation
1927
Number of Group companies
98 companies (as of March 31, 2015)
Number of Group employees
About 46,000 (as of March 31, 2015)
Capital
Net sales
Major brands/lines
64.5 billion yen
777.7 billion yen (for the fiscal year ended March 2015)
Global brand SHISEIDO(sold in 89 countries and regions)
ISSEY MIYAKE (designer’s fragrance brand of Beaute Prestige International
sold in 119 countries and regions)
clé de peau BEAUTÉ, ELIXIR, MAQuillAGE, and more
Our Mission
4
We cultivate relationships with people
We appreciate genuine, meaningful values
We inspire a
culture
life of beauty and
Retail counter (Japan)
Retail counter (overseas)
Medium- to Long-Term Management Strategy:
VISION 2020
Vision for 2020
2018-2020
Next 3 years
First 3 years
2015-2017
New Strategy to
Accelerate Growth
Restructure the Business
Foundation
5
Become a company filled with
growth energy
Become a company overflowing
with youthful spirit
Become a company that is
constantly talked about all around
the world
Become a company that inspires
and is admired by younger
generations
Become a company that is driven
forward by diverse cultures
Become a company supported and needed
consumers worldwide
Key Strategies of VISION 2020
6
Toward Brand Enhancement
Integrated
consumer-driven
Marketing
Marketing Product
development
X
on our innovative
Innovation based
core technologies
Human resources and organizational structure
with strong executional abilities
Regional,
front-line focus
Flat
organization
Speed
Accountability
Top Line Growth
7
Sales Growth by Region (CAGR for 3 years ended March 2015 vs. 3 years ending 2017) *
2%
9%
6%
3%
1%
Europe
-2%
China
4%
7%
-1%
日本
Japan
３%
3%
Asia
アジア
* The growth rates presented above are shown on a local currency basis.
With FY2014 as a base, the three-year growth rate for FY2015 – FY2017.
Americas
Cost Structure Reform for Growth Investment
Changes in Marketing Investment
Cost Reduction Targets by Region
15.0-18.0
over ¥100 billion +
2.5-5.0
¥180 billion
(Billion yen)
6.0-8.0
6.0-8.0
Europe China
0.５-1.0 Japan
Americas
Asia
2014
2015
2016
2017 FY
Expansion of investment in
consumer marketing and R&D
To generate ¥30 to ¥40
billion by FY2017
(Compared with year ended
March 2015)
8
Consolidated Sales Target
9
(Billion yen)
Consolidated sales
target
Over ¥900 billion in
FY2017
Over ¥1 trillion in
FY2020
CAGR
3-5%
CAGR
5-7%
Over 1,000
Over 900
777.7
2014
2017
2020
Rejuvenate
Consolidated Operating Profit Target
10
(Billion yen)
Consolidated operating
income target
¥50-60 billion in
FY2017
Over ¥100 billion in
FY2020
Over 100
50 - 60
27.6
2014
2017
2020
Goals of VISION 2020
Everything based on a “consumeroriented viewpoint”
VISION 2020
Heading for the next 100 years
of Shiseido
11
What is a Beauty Consultant?
An indispensable player in “consumeroriented” marketing
12
Summary
Shiseido's medium- to long-term growth strategy
Mihoko Nagai
Vice President, Corporate Communications
Beauty consultants as key messengers of brand value
Chikako Sekine
Corporate Executive Officer
Q&A
13
14
1. Beauty consultants (BCs) as
messengers and creators of
Shiseido's value
2. Vitalization of BCs for top-line
growth
15
BEAUTY CONSULTANTS (BCs) AS
MESSENGERS AND CREATORS OF
SHISEIDO’S VALUE
BC： Beauty Consultant
Debut of “Miss Shiseido” in 1934
The origin of beauty consultants
16
BCs Working in 89 Countries and Regions
17
About 22,000 BCs
Americas
7
Europe
63
Asia and Oceania 18
Japan
1
*Countries and regions where SHISEIDO
brand products are sold as of April 2014
(including Japan)
Japan
China
Asia (excl. Japan and China)
Americas
Europe
About 10,000 BCs
About 7,000 BCs
About 1,600 BCs
About 3,100 BCs
About 700 BCs
Pillars for Conveying Value
BC = Brand advisors
Convey the brand value
through the five senses
18
Increase Brand Value at Point of Contact with
Customers
19
To increase the brand value created by the marketing department
by as much as 150-200% at the point of contact with customers to
generate even greater customer satisfaction.
Brand value (products,
services)
Brand value (products,
services)
Value created by customer care
Strengthening of the
ability to convey value
Increase in new users & loyal users
Lead to Tomorrow's Sales and Lasting Growth
20
<Influence on the customer's intention to re-visit>
Satisfaction with customer
care by BC
：
Satisfaction with purchased
products
For purchases made after undergoing a consultation
2.5
：
1
(Quantified from the 2014 WEB survey results on BC customer care evaluation)
Lead to Tomorrow's Sales and Lasting Growth
Non-BCdispatched
store
VS.
21
BCdispatched
store
Average sale per customer 1.3
times higher
*For cosmetics specialty stores
Number of customers (intention to re-visit)
Average
sale per
customer
Non-BCdispatched
store
BCdispatched
store
ＯＭＯＴＥＮＡＳＨＩ
22
Worldwide Introduction of OMOTENASHI CREDO (Behavioral
Guidelines)
23
27 languages
89 countries and regions
Kansei
(Sensitivity and sensations)
Engineering
＋
Behavioral Science
24
Preparation
Action Point 1
Well-maintained cosmetics
Action Point 2
Well-maintained testers and tools
Approach
Action Point 3
First approach to attract customers
Consultation
Action Point 4
Comfortable treatment for customers
Action Point 5
Beautiful ways of pointing things out and presenting products
Action Point 6
A pleasant method of contact with the skin for customers
Action Point 7
Introduction of products
to stimulate the five senses
of customers
Closing
Action Point 8
Indication of intentions regarding after-sales service
The following procedures should be performed
collectively.
- Explain orally (hearing)
- Show tools (vision)
- Have customers touch the contents and containers
(touch)
- Have customers smell the scent (smell)
Comprehensive product introduction to stimulate the five
senses will generate a lot of positive feelings among
customers toward the products.
Product Introduction to Stimulate the Five Senses
25
①Hearing
②Vision
③Touch
④Smell
⑤Touch
Oral
explanation
Use of
tools
Touch the
contents
Smell the
product’s scent
Touch the
containers
Customers Are More Satisfied and the Product Is More Beneficial When
They Have Touched the Product
26
Beauty
lotion
Milky
lotion
No
demonstration
(Explanation of product only)
Cream
Effect of preceding
demonstration
The product is beneficial for me
I am satisfied with the product
24 respondents in their 20s to 30s
Beauty
lotion
Milky
lotion
No
demonstration
(Explanation of product only)
Cream
Effect of preceding
demonstration
Customers Are More Willing to Use the Product Once
They Have Touched It
27
％
Increase in product price
Product price customers are willing to pay
24 respondents
40
20
UP
31％
More willing to
use the
product
0
(Explanation of product only)
Higher price
customers are
willing to pay
With demonstration
(Neuromarketing technique)
Global Web Survey
28
Satisfaction survey for BC customer care (vs. competitors)
ALL Regions
Internet users survey, February 2011
Before
After
introduction introduction of
of ＣＲＥＤＯ
ＣＲＥＤＯ
Change
Superior areas
１
１１
＋１０
Inferior areas
６
２
－４
Areas with no
significant
difference
１２
１０
－２
Total
１９
２３
*The total number is different
because of an increase in the
number of countries where it
is available
29
MIKA KADOYA, Shiseido Beauty Specialist
Selected from around 1０,000 beauty consultants nationwide, Mika received three years’ highly
specialized training in an environment with a few select others to become a beauty specialist.
Boasting excellent cosmetic skills and top class knowledge of the world within Shiseido, she won
the Grand Prix Award for two consecutive years in the Shiseido Global Beauty Consultant Contest,
which is an in-house worldwide competition of beauty consultants.
As a legitimate successor of the best cosmetic skills and the spirit of Omotenashi of Shiseido,
which have been nourished from its tradition of more than 140 years, she is currently actively
involved in a variety of fields, including lectures inside and outside the company, events, TV,
magazines, and more, not only in Japan but also overseas in European and Asian countries.
Beauty Tablet
30
Store tool
for product
introduction
Communication
Manual
text
Feedback
The Magic Mirror Can Be Experienced Anywhere in the 31
Country
The Magic Mirror,
a tool for revealing your unseen self
The experience of seeing simulated makeup by simply looking in the mirror, which
was previously only available in Ginza, is
now accessible with the beauty tablets of
BCs nationwide.
Menu of
colors that
suit skin tone
Consumer-Oriented Marketing
32
In-house feedback of consumers' voices and BCs' opinions
<Provide feedback from consumers' voices to the company>
・Information that only BCs can obtain from
contact with customers
・ Issues and ideas observed from consumers'
standpoints
Feedback input into the beauty
tablet
↓
Transferred to the relevant
department at the Home Office
as soon as the next day
10,000 researchers
continuing to increase
customer satisfaction
Consumer Information Center: Collecting the Voices of 33
200,000 People Annually
In the “Information Desk Rating,” our Center received three
stars, the highest rating, for two consecutive years.
(Survey conducted by the Help Desk Institute-Japan in 2013 and 2014)
Products Improved in the Early Stage by Reflecting
Consumers' Voices and BCs' Opinions
I would like a
portable case.
34
Customers appear
confused as to how to
put it away in the case.
巻きアー儒
Renewal with a case
Foundation
brush
I like the cream, but
the container is
slippery and stressful
to use.
Improvement of
the container
Attach an explanation
label explaining how to
put it away.
MAQuillAGE
True Cheek
The nozzle is too hard to
remove. It is stressful for
customers who use it
every day.
clé de peau BEAUTÉ
La Creme
Improvement of
the container
Prior
Mask-In skin toner
and milky lotion
Important Touch Point in Creating Core Fans
Beauty consultants to lead to lasting growth
35
36
FOR TOP-LINE GROWTH
- BC VITALIZATION -
Areas to be Strengthened to Meet the Expectations of
Customers by Channel
BC remembers the faces and
names of customers
37
WEB survey in 2012
BC invites customers for another
visit
Cosmetics
specialty
stores
General
Merchandise
Stores
Welcoming atmosphere in the
entire store
Department
stores
BC's make-up is
beautiful
BC allows customers to
look at the products
without speaking too much
Drug stores
BC differentiates the cosmetics
the customer wants to buy from
others
BC speaks to customers at a
good time
Inbound: Confirmation and Proposal of Needs with the 38
Beauty Tablet
Vitalization of BC
Employment and retention of
talented individuals
Employment
of 500 fulltime
employees
Appointment
as full-time
employees
 Foster a sense of responsibility
 Improve motivation
39
Challenging but worthwhile activities
Adequately
varied
evaluation
Placement of
the right
people in the
right jobs
Further evolution into a professional beauty group
Innovation (Proposing a new kind of BC)
40
BC in store
Web BC
Beauty therapist
Goals of VISION 2020
Everything based on a “consumeroriented viewpoint”
VISION 2020
Heading for the next 100 years
of Shiseido
41