“We see this pandemic as a transformation opportunity for the whole industry,” says Shiseido Travel Retail President & CEO Philippe Lesné. “It is a moment for us to identify areas of improvement and collaboration and to re-examine business models and adapt to the new normal of travel retail.”
Travel retail has historically been a powerful growth driver for Shiseido, but the crisis has forced the Japanese beauty giant to rethink and refocus.
Despite the challenges, Shiseido Travel Retail has successfully streamlined its approach; embracing omnichannel solutions, experimenting with digital technologies, and investing its marketing efforts in China’s booming offshore duty free business. In the last few months, the company has launched two blockbuster beauty animations with China Duty Free Group (CDFG) for NARS and flagship brand Shiseido.
It is this agility and early embrace of new technologies that has helped Shiseido navigate the COVID-19 crisis effectively. “While the globalisation of our industry has made us vulnerable to the pandemic, it has also allowed us to stay connected in more ways than ever before, thanks to technology,” adds Lesné. “
One key takeaway was that companies must be agile and able to adjust their business models quickly to survive in this ever-changing environment – and digitalisation is vital to building this resilience and adaptability.”
In this interview, Lesné discusses Shiseido Travel Retail’s forward-thinking approach; from accelerating its digitalisation capabilities to strengthening its relationships with key partners such as CDFG. He also discusses what ‘the new retail’ means for Shiseido and how success in the era of COVID-19 can only be achieved through shared vision and meaningful collaboration.
“We have achieved positive results and will continue to refine our go-to-market strategy and strengthen our digitalisation capabilities to offer consumers more diverse and seamless shopping options,” Lesné adds. “Success, however, can only be achieved with a shared vision and the support of our partners.”
What is the major focus for Shiseido Travel Retail at the Virtual Travel Retail Expo? What lines, launches or campaigns will you showcase?
We look forward to bringing key stakeholders and partners on an experiential journey through the Shiseido suite, where we envision the ‘New Retail’ concept in travel retail. This blending of online and offline commerce has become even more important in the current context, as traveller needs evolve and call for new forms of consumer engagement methods.
We have curated a tailor-made experience that showcases what we can offer in this new normal of travel retail. This includes omnichannel solutions, digital and retail technologies, as well as key insights that have helped to drive our growth in the channel and make Shiseido Travel Retail (STR) a partner of choice for retailers and airports.
To complete the experience, we will present new and upcoming products from our growing travel retail portfolio, which now includes Drunk Elephant, The Ginza and Tory Burch.
Shiseido Travel Retail’s Key Launches 1. SHISEIDO Vital Perfection Intensive Wrinklespot Treatment and the LiftDefine Radiance Serum and Face Mask |
What are your major targets by geography, channel or retailer type as you seek to tap into a recovering market?
Our focus remains on Asia, especially China, where we will develop further collaboration with key retailer partners. The return of domestic travellers in China has contributed to our Q2 FY2020 performance, and we are hopeful that the strong Chinese demand for prestige brands and enhanced offshore duty free shopping policy on Hainan Island will further accelerate the channel’s recovery.
As consumers have increasingly shifted their purchases online, we are working closely with our partners to expand our presence in the digital and ecommerce sphere.
We are also focusing our efforts in the downtown area, especially in South Korea and China. Recently, we leveraged the gradual recovery in Chinese domestic travel to strengthen engagement with Chinese consumers, launching our NARS ICONS and SHISEIDO Alive with Zero-Gravity Beauty animations at Haitang Bay in June and August respectively.
Travel retail – which has been an important growth channel for Shiseido in recent years — has been severely depressed by the crisis. What green shoots do you see and what are the lessons you’ve learned?
The Chinese domestic travel trend has been encouraging and we hope Chinese consumers will start travelling beyond the mainland, alongside the opening of ‘green lanes’ between countries and travel bubbles in the near future.
While the globalisation of our industry has made us vulnerable to the pandemic, it has also allowed us to stay connected in more ways than ever before, thanks to technology. One key takeaway was that companies must be agile and able to adjust their business models quickly to survive in this ever-changing environment – and digitalisation is vital to building this resilience and adaptability.
At Shiseido Travel Retail, we have pivoted our marketing strategies and ramped up our digital initiatives to continually engage our consumers. Success, however, can only be achieved with a shared vision and the support of our partners – another important lesson as we work towards recovery.
China’s offshore duty free market has become a beacon of hope for the travel retail channel, particularly for the beauty category. In what ways are you engaging with this important demographic? Could you give us some recent examples?
Our consumer engagement approach is underpinned by digital-focused, omnichannel campaigns that target consumers at every stage of their travel journey. Our retail partners are a vital bridge to consumers and the successful launch of our recent NARS and SHISEIDO animations at Haitang Bay would not have been possible without the strong partnership of China Duty Free Group (CDFG).
CDFG’s rapid mobilisation of its ecommerce and social platforms enabled us to execute extensive digital O2O campaigns, which included KOL engagement programmes and digital marketing investments on key social and travel platforms to drive footfall to the outpost and online traffic to CDFG’s ecommerce pages. In addition, at the outposts, we created excitement with digital elements like gamification and interactive touchpoints that enabled social sharing.
How is Shiseido Travel Retail embracing the ecommerce trend and how do you see this trend affecting your channel investment in the future?
We have embraced the ecommerce trend with a digital-first strategy that is strongly driven by partnerships with retailers on their online retail websites and social media platforms. We are working closely with our partners to expand and enhance our brand presence online, with a focus on increasing our reach and driving awareness and engagement with consumers.
We have achieved positive results and will continue to refine our go-to-market strategy and strengthen our digitalisation capabilities to offer consumers more diverse and seamless shopping options. Accelerating our digital initiatives with our partners will be a key priority.
How do you view the continuing impact of COVID-19 on the wider industry?
According to Air4casts, international passenger traffic is expected to improve slightly from -86% in August 2020 to -78% YoY versus last year by end-December. It will take a long time before passenger traffic returns to pre-pandemic levels; starting with domestic and essential business travel before the return of leisure travel, which is key to our business.
Consumer behaviour will keep evolving, with greater awareness of health and hygiene and a growing shift towards digital purchases, and it is vital that companies respond quickly to these developments.
We see this pandemic also as a transformation opportunity for the whole industry. It is a moment for us to identify areas of improvement and collaboration and to re-examine business models and adapt to the new normal of travel retail.
How do you think the channel can and should engage with travelling consumers to ensure a sustained recovery?
We have to help them feel safe and excited to travel again, so giving them a peace of mind and keeping them connected and engaged throughout their journey are key.
We have rolled out a comprehensive set of service and hygiene guidelines for our frontline staff, and these new-normal best practices are disseminated globally via our ShareApp digitalised platform for beauty consultants, ensuring a consistent, high-quality experience. We have also enhanced our digital engagement touchpoints such as using augmented reality for virtual try-ons and gamification to add excitement at our animation spaces.
We are collaborating with retailers to expand our ecommerce presence and offering consumers seamless and contactless shopping options.
How would you like to see industry partnerships evolve as we enter a new era for travel and travel retail?
Collaboration and adaptability are more important than ever. Collaboration has been the bedrock of Shiseido Travel Retail’s growth in the channel, and we believe that continual and close partnerships within the Trinity and with airlines will help drive recovery. A long-term mind-set and partnership approach are essential to keep our industry progressing in the same direction together.
We are also recognising the importance of digital in this new landscape, so we hope that partners – retailers, suppliers and airports alike – will be more open to digital initiatives. Leveraging data-sharing opportunities will also ensure a deeper understanding of consumers to better target and convert them.
