NEW YORK —?Call it the next step in Aveda’s quest to become a dominant force in the global hair care market.

After more than three years of planning, the brand is about to realize the first stage in a long-anticipated Asian strategy next week by opening its first door in Japan.

Unlike previous global expansion ventures for Aveda —?in most cases, the launches internationally had been handled by distributors in those markets — the Japanese undertaking is being managed by the brand’s U.S. team, headquartered in Minneapolis and New York.

Why now, when the economy is so challenging, is the brand kicking off a growth plan in Asia — particularly in Japan, one of the most hair-involved markets on the planet? Executives involved in the expansion plan emphasize that despite any temporary economic challenges, this market is ripe with opportunity. And while Aveda is already present elsewhere in Asia — in Korea, Taiwan and Hong Kong — Japan, being such a major beauty market, is a major step in the brand’s long-term Asian growth plan.

As William Lauder, chief operating officer of the Estée Lauder Cos., noted: “We have a wonderful opportunity to make Aveda an important brand in Japan, and we are going to do so in a controlled way.”

The three-year preparation process involved extensive market research, product tweaks and other moves designed to optimize the brand’s chances of success in Japan. As Lauder explained, the undertaking wasn’t as simple as printing packaging in Japanese and taking it to salons. “When we started talking about this project, we were determined to bring this to the market in the right way,” said Lauder. “And that takes time. We had reformulate products for this market, as well as do considerable market research. Now that we’re done with those preparations, it’s not like we can hold off launching.”

Aveda’s parent, the Estée Lauder Cos., has planned on expanding the brand globally since it purchased it in December 1997 from founder Horst Rechelbacher. And the brand’s president, Dominique Conseil, has extensive experience in the market — before taking on his current role in July 2000, Conseil had run rival L’Oréal’s prestige beauty business in Japan as president and representative director for Cosmelor Ltd., Japan, the Japanese division of L’Oréal Parfums and Beauté that oversees the Lancôme, Helena Rubinstein and Biotherm skin care and cosmetics brands and the Ralph Lauren, Giorgio Armani and Lanvin fragrances in that market.“This is the first significant international market we’ve launched since [Lauder] acquired Aveda,” said Lauder. “In the past, many international launches were done through distributorships. This time, we are launching in our own way. Aveda is not a traditional cosmetics brand, and therefore we could not launch it in the same way as we would launch a traditional cosmetics brand.”

Added Dan Brestle, the group president at the Estée Lauder Cos. who oversees the brand, “We don’t want to be everywhere. In Japan, as in our other markets, we will be very careful to launch the brand in the right places, and we will roll it out in a very careful, controlled way to ensure that Aveda is sold in the right environments.”

While none of the executives wanted to commit to firm numbers in the market, sources estimated that Aveda would be in about 5,000 doors in Japan —?a mix of salons, spas and retail locations — when the brand is at final capacity. Within five years, the brand is expected to be in about 1,000 doors. Within five to 10 years, Aveda’s sister brand, Bumble and bumble, may be the next to expand in Japan.

And while none of the executives interviewed would comment on sales projections, the careful and controlled approach could have a huge payday for Lauder —?industry sources estimated the brand could do upward of $10 million at retail in its first year in Japan, with projections rising to $100 million in five years and as much as $200 million within seven to 10 years.

For his part, Conseil seems confident — but not complacent —about introducing Aveda to a market that nearly always presents challenges for Western brands. In a May interview, Conseil pointed out, “the economy is disappointing currently, not only in Japan, but also around the world. The reason we decided to proceed with our launch is that we have a long-term focus. We know it will take 10 years to capture the full opportunity Japan offers us. Obviously, economic cycles are irrelevant over a period of 10 years.”

As Conseil reiterated earlier this week, he —?and his team —are ready for the challenge. “We can’t be a major player in Asia if we are not in Japan,” he said. “It’s been a three-year process for us to get ready to sell here, but that’s not a long time for deep preparation. Most companies have an introductory period of about 10 years in Japan — you invest for about 10 years before having a deep market penetration there. The challenge of becoming global is succeeding in three markets — the U.S., Japan and Western Europe. We are hugely successful in the U.S., our performance in the U.K. is excellent and Japan is the third piece of that very important strategy.”The Japanese rollout will come in stages. After the brand is fully established in the Tokyo area, the next planned target market is Osaka. In each market, the brand plans to open one major flagship salon and spa, as well as a few retail outlets, by itself and then work with distributors to further expand Aveda’s reach. “Usually, we go into a market either with a retail perspective, or selling to distributors who then sell to salons,” said Chris Hacker, senior vice president of marketing and design for Aveda. “In this case, we’re going to do a little of both. We’re opening the initial facility, but we will partner with distributors in the greater rollout plan.” He was referring to Lauder’s intention to use distributors to add outlets in the later stages of the rollout.

Conseil emphasized Aveda has no intention of competing with its salon customers. “We don’t want to be in the service business, but in a new market — and particularly in Japan — it was critical for us to start off in the right way,” he said. “I think the most we will own is one [salon and spa] in Tokyo and one in Osaka. What we always own are the retail locations. However, there are a limited number of retail locations — in the U.S. there are only 135 —?and they are designed to work in synergy with our salon partners to give a wider consumer awareness for the brand.”

The new Tokyo space includes a salon, spa and cafe and is housed in a 5,877-square-foot, three-story building, located on a small residential street off Omotesando in the city’s fashionable Minami Aoyama area. It includes 915 square feet for retail; 1,119 square feet for the salon; 1,216 square feet for the spa, and 743 square feet for its organic cafe. The retail space and the cafe will be on the first floor, and the salon and spa will be on the second floor and in the basement, respectively. (Lauder prefers to call the basement the “ground floor,” noting that “if it’s a basement, it’s the world’s most expensive basement!”) The Environmental Lifestyle Store and the Pure Café open Sept.12, while the Aveda Lifestyle Salon and Spa open Sept. 24.Hacker noted that the brand’s two objectives for the space were to “to reduce energy consumption and improve air quality throughout the space, using environmentally preferable, locally sourced materials and specific plants to achieve these goals.”

As such, the steel-and-glass shell — true to the brand’s environmental heritage — contains some typically Aveda touches. “Some of the wood is oak from a grove of trees along the coast in Japan, which needed to be culled to make flood damage less severe,” said Hacker. “In other places in the space, we used aged wood from houses taken apart many years ago. There’s a glass company on Kushu, which we bought glass from, and photoelectronic panels on the roof generate part of power as solar power, and we’ve installed energy-efficient, low-voltage lighting and energy-efficient appliances throughout.” About 90 percent of the materials, noted Conseil, were sourced in Japan.

Cabinets are made from certified Tamo oak, and flooring and stairs are constructed from Sokoita wood, recycled from a 100-year-old farmhouse. Some walls in the spa are designed with corn sorghum grass in a traditional mud-construction format that Brestle likens to Japanese adobe.

Lauder executives declined to comment on the cost of construction, but industry experts estimate the price tag exceeded $2 million.

Services will seek to address the needs of the market. The spa will feature signature services centered around Aveda’s new holistic spa philosophy, Elemental Nature. They will include Aveda’s Hydromat (Hydrotherm in the U.S. and Europe) Treatment, a Himalayan Rejuvenation Treatment, and an Indigenous Purifying Stone Massage, among others. In addition, noted Hacker, the building’s southern and northern exposures make it well suited to hair color services.

Offering the right products here has been a challenge. “The Asian hair type is different [from a Western customer’s]. It is often more damaged — or the customers think it is —?and they prefer a different feel for their hair,” said Hacker. Asian skin, added Conseil, is typically thinner and more sensitive, which also influenced decisions on certain skin care products for the market.

“With the specificities of the Japanese market, we created products for Japan with the idea to globalize them,” said Conseil. Damage Remedy, a very heavy hair conditioning product, provides the slippery feel that this consumer generally prefers, explained Hacker. As well, the company will launch Nature White, a skin-lightening lineup, early next year. This line, while expected to strongly appeal to Asian consumers, will be marketed globally, “but we didn’t feel we could go into the Japanese market without it,” said Hacker. Aveda also drew upon its market research —?and contacts — to globally launch Light Elements, a four-stockkeeping-unit styling collection, earlier this year.So what’s next for the brand? The executives see long-term potential in China — but not immediately. “I think the future screams China, but Japan will be well into its life cycle before that happens,” noted Brestle. Any potential rollout there is likely at least five years off and probably more, added Conseil.

And, Conseil added, the first priority is to succeed in Japan.

“If we are successful in Japan, I think it will be because Aveda is very unique, but at the same time very Japanese. You need to be different in such a competitive market, but you also have to have a strong affinity with the market, and we have worked hard to achieve this. We provide efficacious, natural products with tangible results. This is unique in Japan, especially in the salon industry. And this is not a marketing strategy; it’s our company culture.”

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