Marc Rey assumes a leading role at Shiseido.
Appeared In
Special Issue
Beauty Inc issue 10/30/2015

Marc Rey is a persistent Motivator with a touch of the poet.

This story first appeared in the October 30, 2015 issue of WWD. Subscribe Today.

The recently named president and chief executive officer of Shiseido Americas has an offbeat way of using his idle time on airplanes and in out-of-town hotel rooms. While others are fiddling with remote controls, trying to snag a tolerable movie, Rey is busy crafting fiction—in French.

“I don’t watch movies in planes, I write. To be able to even start writing you probably need two hours of nonstop time.” Once he’s on the ground and checked into a hotel, jet lag provides oodles of sleepless writing time in the middle of the night.

“I have an almost religious belief in books,” he admits. “It’s the ultimate form of art…not only a description of the world, but it’s a description of the inner world of people.”

Rey has finished four novels. All of them are unpublished but he’s in contact with a publisher about one of them, which he describes as political fiction. It opens on Election Day on November 2016, when a woman is elected president.

“I like human personality,” he observes. “I like misunderstanding among human beings, I like provocation and I like a total absence of political correctness.”

Then morning comes and it’s time for business.

What is your assessment of the beauty market in North America?

It’s probably the most fascinating place to work, and the most challenging. It may not be the biggest per capita market for all of the categories, but it’s certainly the biggest market. So all of the big guys want to be here.

That creates competition and a lot of visibility because what you do in the U.S. is visible to everybody. So people are very nervous about it. The competition is extremely fierce. It’s tough to make money in this market.

The second characteristic is the channels of distribution. This is the largest and the biggest variety of distribution channels in the world. None of them are small. For example, TV retailing only exists in a few countries—it’s big here. Digital is more developed here than in any other country. Outlet stores exist in a few countries, but not to this extent. Department stores to this level exist in some countries, but in Europe they’re almost nothing. And you have self-service with Ulta and Sephora. It means that you cannot grow your brands with only one channel of distribution.

The significant brands that have been generated in the last 20 years have come from the U.S. Obviously you have a few brands from Korea, but the big European brands have been here for 30 years. All the newness, like Urban Decay and Nars, have come from the U.S.

What is amazing here and doesn’t exist in any other market is the scope of price and promotion coverage. When atop designer does one of those crazy expensive fragrances and only wants 40 doors in the world, there’s always 20 in the U.S. At the same time one of the faster segments in makeup is the dollar mascara business at Wal-Mart. If you go to France, you’re probably not going to sell the top price, but you’re not going to sell for $1. You’re going to be more in the middle. The combination of fierce competition and extreme visibility of what you do in the U.S., and the scope of price coverage, makes the market extremely unique.

Finally, the U.S. is not the U.S. The U.S. is the world. You have such a variety of ethnicities, and you can’t only say, “I’m only going to target this group.” When you launch a foundation here you better have all the shades to cover all the types of skin.

Is the payoff correspondingly greater than in other markets?

I think so. If you know how to extract the learning of all that then you can explode with learning in Europe and Asia and many places. That’s one of the things [Shiseido ceo Masahiko] Uotani is putting in place. The other area where the U.S. is interesting is social media and digital. The American woman is extremely connected and is evolving rapidly. I don’t think we as an industry are evolving at the same speed.

The only thing that the U.S. beauty market doesn’t do well is fragrance. By having no barrier to entry and focusing on promotion, you are making that exactly the opposite of a luxury category. It becomes almost a commodity.

Where do you think the big opportunity is?

There are a lot of opportunities, because Americans consume and spend much more than [those in] any country in the world. In periods of crisis the first country that always comes back is the U.S. There are probably three channels that are going to emerge as faster-growing. Digital, for sure. People are spending more time on their phones than talking to other people or watching TV. It’s not digital, it’s life. So life is going to be the biggest channel of distribution. This is going to grow enormously, particularly in skin care.

Also, digital in terms of information. Whatever I say in my advertising is going to be ignored by the consumer, who prefers to look at a comment by a user whom she doesn’t know than listen to what I say.

The second channel which is going to keep growing is the directly operated store. Consumers like them because it’s direct contact.

In the U.S., because we used to have a very strong presence of assisted sales of department store, self-service is going to develop more. If you see the growth of companies like Ulta, the consumer today wants to be able to test, try, compare; she wants to have her phone and get information and most customers don’t want to be cornered. Self-service is probably going to win.

Switching gears, in what area of this vast company you find yourself in now do you think you can have the biggest impact?

I can very much change the status quo. When you come in as a newcomer, you can play the usual game of challenging everything that is done and seeing where we can do different.

In the Americas regions, I can increase the synergies between the different brands. The brands used to work a little bit in silos, but there are a lot of synergies. For example, when you talk to retailers you have more weight with all the brands around you. In terms of knowledge, Bare Escentuals is a very well-known retail store and fascinating [in] makeup, while Shiseido knows skin care better, so all those things can be shared. If you generate more resources, you can better allocate those resources and you can push success more.

How do you acclimate so agilely [to businesses] and go about putting your imprint on a business?

I grow talent. I motivate them to go with [their] strong mind. I create successes, I test new things. The American market is very forgiving [when it comes to] testing.

And I fully respect brands and consumers. The most important thing is to motivate talent to go the extra mile. I try to push successes to the limit. I believe very much in a model based on successes. The impact goes beyond the sales and profits, it can move and change completely an organization.

In terms of encouraging talent, how would you describe your management style?

It is challenging in the good sense of the term. Contemplate the thing we haven’t been contemplating. Test. Make choices. I hate the absence of choices.

For the rest I tend to be a chameleon. With somebody who needs guidance, even if I need to get into the service level in supply chain, I’ll do it. If I’m with somebody I need to have a coffee with and talk about what’s going to be the next frontier for a brand, I’m going to do it this way. I work on trust, and I like to “inspirate.”

We make choices together. And if we have successes, we celebrate them, we push them to the maximum. Some people get a lot of comfort with routine and repetition. I am not one of them. I love change situations. I’m not the best manager, I’m the best leader.