“We’re reaching a level of consumer intimacy that is absolutely insane,” Rey said. “The level of data is crazy…How do you make sense of this data?”
This intimacy, he explained, has been fueled by a highly connected consumer and resulting shopping experience that’s exploded on all fronts. The notion of doing all one’s shopping in-store has been replaced by multiple touch points, from e-commerce sites, tutorials, mobile videos, apps and more.
It’s not about controlling these channels, though, especially for a company the size of Shiseido. Rey said it’s consistency — and the ability to maintain a consistent message across touch points — that will result in success.
While size has its advantages, he acknowledged the main challenge that exists today for the large beauty firms is the pace of change.
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“It’s harder to renovate a house than build one from scratch…It’s hard to change when you’re big,” Rey said, citing what happened in the prestige makeup category in the U.S. last year. He pointed out that traditional brands “barely managed to maintain their sales” and indie brands grew by 42.7 percent.
To combat this, Shiseido has unleashed a number of initiatives since Masahiko Uotani, president and ceo of Shiseido Company, and Rey took the reins.
“My boss Masahiko Uotani crystalized the fact that we came back to our roots,” Rey said. “We have things centralized and the capacity to go faster. It’s far less Japanese-centric.”
He explained that Shiseido “desocialized” many elements internally, increased its global focus, doubled down on technology and purchased several companies. As a result, the company has seen substantial growth and increased its profitability in the past 18 months.
“We’re very open to the outside; we don’t think were going to solve everything in house,” he continued, rattling off a list of recent acquisitions. These include 20-year-old brand Laura Mercier; MatchCo, a technology powered by Apple that allows for mobile to facilitate the creation of custom blended foundation and JWalk, a creative digital agency.
Last year, Shiseido opened its Global Makeup Center of Excellence in New York, which is the home to future development and innovation of the company’s prestige color cosmetics business, including the integration of MatchCo within the Shiseido portfolio.
“In beauty brands you used to have ultraprestige, low-price and [the] middle…[And] now we’re moving to an hourglass shape. [There are] superprestige brands and a lot of entry-priced brands, and when you’re stuck in the middle you aren’t doing really well,” Rey said.
Next up for Rey — which he referred to as “the biggest change that hasn’t happened yet” — is an evolution of the marketing department. He admitted that the firm needs to “completely rethink” the way it approaches marketing, from social marketing and data to trade and consumer marketing.
But despite Shiseido becoming “less Japanese centric,” Rey still thinks the U.S. could learn a few things from Asia when it comes to beauty.
There is an obsession with service in Asia that’s unmatched in the states, as well as retail stores that “are really an experience like we don’t have in the U.S.” where he said stores could sometimes “be a little boring and very basic.”