Four years ago Japanese prestige skincare brand Shiseido launched Ultimune Power Infusing Concentrate. In quick time the serum became the brand’s best-selling product.
2018 sees the launch of a renewed Ultimune Power Infusing Concentrate. The product’s exclusive travel retail pre-launch, in partnership with The Shilla Duty Free and Singapore Changi Airport, was celebrated two weeks ago with a digitally-focused Red Vibe Street activation.
This year also marks the second phase of Shiseido Group’s Vision 2020 strategy, which encompasses a CAGR target of +5-7% for 2018-2020. Shiseido Travel Retail will be at the forefront of this growth through its mission to inspire 1 billion travellers to become Shiseido shoppers.
The Moodie Davitt Report’s Helen Pawson caught up with Shiseido Travel Retail Asia Pacific General Manager Kenji Calméjane in Singapore during the recent TFWA Asia Pacific show. He spoke about the new Ultimune Power Infusing Concentrate, the role that travel retail will play in Shiseido’s Vision 2020 and about putting the consumer first.
The Moodie Davitt Report: How would you describe the performance of the Shiseido brand in travel retail over the last year? What factors have influenced this?
Kenji Calméjane: We closed 2017 with strong double-digit growth in net sales. This is thanks to several factors, including ramping up our marketing efforts with increased advertising and high-profile animations across all our brands, such as the prominent ‘The Beauty of Thailand’ campaign with King Power Thailand, last year. It leveraged influencer marketing to target Chinese tourists travelling to Bangkok, using a strong Sense of Place concept that included Thai-themed travel retail-exclusive packaging and digital and social media platforms.
We have also opened new counters and renovated existing ones, while enhancing productivity with staff training.
This stellar performance has surpassed our expectations and set a solid foundation for us to further grow our business in the next phase from 2018 to 2020. We plan to maximise growth in a sustainable way, by focusing on our growth drivers: our core brands, insights-driven marketing, sales productivity and operational excellence.
Shiseido Travel Retail has a strong and established presence in Asia Pacific. How do sales here compare with EMEA and the Americas?
Asia currently represents 68% of Shiseido Travel Retail sales, with EMEA at 21% and Americas at 11%. Clearly the influence of J-Beauty, Chinese travelling consumers and the growth of cosmetics in general across Asia can be felt here. Our Asia Pacific travel retail business grew over +80% in 2017 versus 2016, meaning growth was close to six times the global travel retail beauty market (+13.8%).
In terms of Shiseido Travel Retail global sales, which is the top-performing brand and what is the split between make-up, skincare and fragrance? How does this differ in Asia Pacific?
For Shiseido Travel Retail globally, Shiseido is our number one brand, followed by Clé de Peau Beauté, Dolce & Gabbana and NARS. In Asia, we also see Anessa, and Issey Miyake among the top performers.
In terms of category split, skincare is the dominant category, with make-up being a rising star. For us, the fragrance category has seen good growth due to the addition of Dolce & Gabbana to our portfolio. However, the fragrance category has challenges due to its traditional regional strength in EMEA and Americas. Fragrances is not seeing the boom witnessed in cosmetics in Asia.
What does a great travel retail partnership look like to Shiseido Travel Retail?
A shared vision, open communication and realistic expectations are the foundation of a great travel retail partnership. We are fortunate to have many examples of such collaborations, such as the Clé de Peau Beauté two new flagship openings with DFS Group in Asia Pacific in Singapore and downtown Macau.
“A shared vision, open communication and realistic expectations are the foundation of a great travel retail partnership”
A true partnership project also embodies a ‘Think Global, Act Local’ philosophy. Probably our best example of this was the ‘The Beauty of Thailand’ campaign, developed exclusively in partnership with King Power International.
How has the Trinity concept evolved over the years. What could be done to improve the collaboration between the three parties?
The Trinity model is extremely important to us. It is a philosophy that is in line with our Vision 2020 goal to put the consumer first in everything that we do.
Creating a truly omnichannel framework requires strong partnerships with airport authorities, airlines and retailers, and we have been focusing on building comprehensive strategies to strengthen our relationship with our partners in the digital arena.
A big part of our strategy to increase the impact of our in-store animations involves creating effective digital activations that push awareness, generate leads and drive engagement at every touchpoint of the consumer journey. This includes retailers’ CRM programmes, digital and social media platforms, where we are working to amplify our brand presence through closer collaboration with them.
We’ve developed guidelines on enhancing our presence on retailers’ social media platforms and websites in terms of look and feel, ensuring that all content provided adheres to digital best practices while adapting our brands to retailers’ digital environments to drive in-store footfall.
Most recently, for our #BeautyofTravel campaign for Shiseido’s Essential Energy, we have expanded this digital collaboration with retailers to include a mobile game. We hope to leverage their online platforms to help drive awareness of the new campaign through this interactive game, which promotes Essential Energy in a fun way and helps to convert online traffic to offline footfall to in-store activations.
Our efforts to enhance collaboration are paying off – not only have we improved our ranking as a supplier in the Advantage Report which is based on retailer feedback, we have also had several breakthroughs with our partners as evidenced by retailer-exclusive initiatives such as the earlier mentioned ‘The Beauty of Thailand’, our successful entry into new markets, and closer collaboration on their digital platforms.
How powerful can pop-ups/promotions be in travel retail?
We view pop-up spaces as a key opportunity for all of our brands – they stimulate conversation and create more meaningful and engaging experiences for travellers beyond the traditional realms of retail. For us, pop-ups are one cog in a bigger wheel, where we look to engage travellers across multiple platforms – a physical experience that is then amplified by digital shareability.
“The Trinity model is in line with our Vision 2020 goal to put the consumer first in everything that we do”
There are hundreds, even thousands, of products launched every year and pop-ups are a great way to stand out in the crowd. It becomes about more than just the product. It’s a takeaway experience for customers – one that consumers will remember.
When pop-up opportunities are integrated with insights and data-driven marketing, we are able to create an even more powerful proposition. The result is increased awareness and engagement at every touchpoint of the consumer journey. The insights we harness from these touchpoints allow us to deliver tailored marketing campaigns and content to better engage and serve consumers.
In 2017, Shiseido Group surpassed JPY¥1 trillion (US$9 billion) in sales – a target originally set for 2020. How does the company plan to build on this achievement as it enters the next phase of the Vision 2020 strategy? Can you outline the role that Shiseido Travel Retail will play in accomplishing the Vision 2020 targets?
It has been a really exciting period for Shiseido; its planned brand rejuvenation continues this year with further product innovation. This next phase is about the acceleration of our growth, to hit ambitious revenue and operating profit targets. Key strategies in place to accomplish the Vision 2020 targets include further selection and concentration of our brand business, with a prestige first approach, which is great news for travel retail. We already play in the prestige space, and don’t have the plethora of domestic masstige brands that Shiseido Group owns.
We are also on route to accelerating our digitalisation plans, with the support of the Digital Centre of Excellence in New York. We also have new innovations in the pipeline, and a people-first approach, with investments in talents. Globally speaking, we have a new management model.
Between 2017 and 2020, travel retail is forecast to be the fastest growing region in Shiseido Group, accounting for around 20% of the group’s incremental revenue growth over that period. To achieve this, Shiseido Travel Retail will have to deliver a +22% CAGR 2017-2020. Pleasingly, we made a great start last year!
Looking ahead to 2030, Shiseido Group wants to be in the top three ranking beauty companies worldwide, the number one in Asia and remain the undisputed number one in Japan. Being a pioneer in the J-Beauty wave is one of the aspirations that brings us to this long-term vision.
Ultimune Power Infusing Concentrate became a cult Shiseido product soon after its launch in 2014. Can you talk us through the thinking behind the product’s reformulation?
The renewed Ultimune Power Infusing Concentrate has been in development for a number of years; since its inaugural launch in 2014 it has cemented its status as the best-selling Shiseido product. The revitalised concentrate builds on 25 years of research to deliver a seamless and effective serum that elevates its defence. ImuGeneration Technology contains potent natural extracts that encourage skin’s ability to defend its own ideal condition, even under extreme stress.
We wanted to create a skincare product to relieve women who are experiencing constant emotional stress, which is why we are the first company to test a skincare product on this group of users. Ultimune’s rich, dewy texture absorbs immediately, and feels like an invisible veil of protection; while ImuCalm Compound, containing soothing fragrances such as Rose Element and Lotus Element, relieves stress and offers a calming effect. The compound also emits Green floral fragrances to evoke both a sense of relaxation, and a feeling of fresh, new energy.
Shiseido views the art of package design as part of the science of skincare, and every aspect of the new product’s look, feel, and function reflects the serum itself. As a result, the packaging holds true to its original design to project an image of inner strength. A silver line was also added to the package to represent the start of a bright future.
“Between 2017 and 2020, travel retail is forecast to be the fastest-growing region in Shiseido Group”
Who is the main Ultimune consumer and how will you target them going forward?
Ultimune was created to relieve women who are experiencing constant emotional stress, and thus they are our target audience. Ultimune is all about celebrating women’s strength. Even before the launch of the revitalised formula, it began with the #FindYourStrength campaign last year, drawing inspiration from the philosophy of Shiseido and Ultimune, and resilience in the face of adversity; this message will be carried through in the new #StrongSouls campaign.
