Shiseido has made another acquisition, but this time the target is not another beauty manufacturer. It is a full-service, New York-based creative agency, called JWalk.
This story first appeared in the March 7, 2017 issue of WWD. Subscribe Today.
In a market driven by buzz, the American arm of the Japanese beauty giant has sharply departed from tradition and made a bid to gain more quickness and agility in its marketing and message-making.
“Creative excellence is at the core of consumer communication and is key to building the value of our prestige brands,” stated Masahiko Uotani, president and chief executive officer of the Tokyo-based parent Shiseido Group. “I am convinced that JWalk will add significant intangible value and capabilities to our marketing efforts, especially in leveraging their digital communication expertise.”
Marc Rey, president and ceo of the New York-based Shiseido Americas Corp., which made the deal, stressed the importance of creativity in the new digitally driven beauty business. “We work in an industry where rational and emotional communication to the consumer needs to be combined,” he said. “We are not selling detergent. We are selling prestige beauty.”
Rey declined to disclose the financial terms of the acquisition, but outlined how certain aspects of the deal depart dramatically from traditional industry practice and thought. For one thing, the agency will continue working with companies in other fields, outside of Shiseido’s circle of competition, as a means of keeping their antennas tuned to new ideas.
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“We want to make sure that they keep the agility, the creativity and the recruitment of the best talent and the openness to other markets,” Rey continued.
Rey added, “It is very important for us that JWalk still has the capacity to leverage the best talents to know what is happening in other markets and leverage that for all our brands. Here we have a small agency, which has a lot of good talent. In addition to that they have their network which they can trigger and leverage whatever they want, including people that work normally in other industries.”
JWalk was founded in 2010 by Doug Jacob, Michael Lastoria and Charlie Walk. The agency began by developing a string of now 20 pizza shops, called &Pizza in Washington D.C., Virginia and Maryland, then developed a pioneering specialty in purpose-driven creative design in beauty, fashion, spirits, hospitality and consumer goods. Walk left the agency to become president of Republic Records.
JWalk works out of a 10,000-square-foot studio in midtown Manhattan with a staff that Jacob said will probably never exceed 40 people.
An estimated 60 percent of the firm’s work is in digital media with the remaining 40 percent in brand development. “It’s more than creating logos,” Jacobs said, “it’s more about finding the purpose of the brand and helping that brand carry that purpose all the way through. It goes back to consistency. Those are the brands that are winning today.”
The firm’s experience ranges from start-ups like SoulCycle to established brands like Lacoste.
Shiseido gained knowledge of the agency during the last four years, as it worked on the company’s bareMinerals and Buxom brands.
Jacob will carry the title of creative director, Shiseido Americas, as well as founder of JWalk. He will report to Jill Scalamandre, president of Shiseido’s Global Makeup Center of Excellence. She, in turn, continues to report to Rey. JWalk will put about 90 percent of its effort into makeup, Rey said, while primarily concentrating on core American brands. But other projects, based overseas, may include collaborations conducted elsewhere, such as on Shiseido’s fragrance projects in Paris. Uotani noted, “I also look forward to JWalk’s collaboration with our creative teams in Tokyo on key projects to deliver creative excellence on a global scale.”
An important objective is to find a solution to a problem that Rey has previously raised — How “to get much more consistency across all the touch points of the consumer. The consumer is being reached by all kinds of stimuli everyday from influencers to social to digital media to print to TV to store [displays] to merchandising. It’s getting more difficult to be consistent across all those touch points. JWalk is going to be working on almost all of our brands [with the exception of Nars, which has its own creative director in François Nars]. But they will cover many things; they will cover digital assets, print,” he continued. “They will be involved in all the elements of the companies. So we feel we will get much more consistency.
“We are going to bring Doug and his team, very early into the business kitchen. They will be part of all the business thinking, including stuff that a creative agency should not be part of. They will not do the product development, but they will know what are the trends in the market. The result will be a much better alignment between the creation and the strategic issues of the brand.”
As a result, “we will get much more agility and speed. That’s the name of the game today,” he said.
“By leveraging JWalk and the way they work, it is going to be much, much faster in bringing a solution and bringing an answer,” Rey said.
Jacob said he will be “helping each of these brands find a consistency and message on a daily basis.”
As for being disruptive, he said, “The biggest thing is agility. Larger brands have a process that is antiquated. When we sat with Marc and Jill, they presented this and allowed us to continue to run as we do. We have a voice and that’s being disruptive and we have a voice that’s being listened to. That to me is incredibly innovative. Just by disrupting a process that’s traditional in larger organizations is going to push change.”
Jacob insists that money was not his motivation in combining with Shiseido.
“The big advantage is the alignment of values,” he said. “Either you do it for the money, or you do it because it’s passion. My business partner and I had the luxury of not needing to sell the business. We are truly doing it because the exercise ahead of us is going to be an incredible case study. It hasn’t really been done like this.”
When asked about his commitment to the deal, he said, “I am here for the foreseeable future.”