Shiseido Growth Strategies and Beauty Consultants

Transcription

1 September 10, 2015 Mizuho Securities Conference Shiseido Growth Strategies and Beauty Consultants Chikako Sekine, Corporate Executive Officer Mihoko Nagai, Vice President, Corporate Communications Shiseido Co., Ltd.

2 Summary 2 Shiseido's medium- to long-term growth strategy Mihoko Nagai Vice President, Corporate Communications Beauty consultants as key messengers of brand value Chikako Sekine Corporate Executive Officer Q&A

3 Corporate Profile 3 Company name Shiseido Co., Ltd. Registered Head Office Foundation Incorporation 5-5, Ginza 7-chome, Chuo-ku, Tokyo, Japan Number of Group companies 98 companies (as of March 31, 2015) Number of Group employees Capital Net sales Major brands/lines About 46,000 (as of March 31, 2015) 64.5 billion yen billion yen (for the fiscal year ended March 2015) Global brand SHISEIDO(sold in 89 countries and regions) ISSEY MIYAKE (designer s fragrance brand of Beaute Prestige International sold in 119 countries and regions) clé de peau BEAUTÉ, ELIXIR, MAQuillAGE, and more

4 Our Mission 4 We cultivate relationships with people We appreciate genuine, meaningful values We inspire a life of beauty and culture Retail counter (Japan) Retail counter (overseas)

5 Medium- to Long-Term Management Strategy: VISION First 3 years Next 3 years New Strategy to Accelerate Growth Restructure the Business Foundation Vision for 2020 Become a company filled with growth energy Become a company overflowing with youthful spirit Become a company that is constantly talked about all around the world Become a company that inspires and is admired by younger generations Become a company that is driven forward by diverse cultures Become a company supported and needed consumers worldwide

6 Key Strategies of VISION Integrated consumer-driven Marketing Regional, front-line focus Toward Brand Enhancement Marketing X Innovation Flat organization Speed Product development based on our innovative core technologies Human resources and organizational structure with strong executional abilities Accountability

7 Top Line Growth 7 Sales Growth by Region (CAGR for 3 years ended March 2015 vs. 3 years ending 2017) * 2% 9% 3% 6% 1% Europe -2% China 3% 3% Asia アジア 7% -1% 日本 Japan 4% Americas * The growth rates presented above are shown on a local currency basis. With FY2014 as a base, the three-year growth rate for FY2015 FY2017.

8 Cost Structure Reform for Growth Investment 8 Changes in Marketing Investment over 100 billion + Cost Reduction Targets by Region (Billion yen) billion Europe China Japan Asia Americas FY Expansion of investment in consumer marketing and R&D To generate 30 to 40 billion by FY2017 (Compared with year ended March 2015)

9 Consolidated Sales Target 9 (Billion yen) Consolidated sales target CAGR 3-5% CAGR 5-7% Over 1,000 Over 900 billion in FY2017 Over 1 trillion in FY Over Rejuvenate

10 Consolidated Operating Profit Target 10 (Billion yen) Consolidated operating income target Over billion in FY2017 Over 100 billion in FY

11 Goals of VISION Everything based on a consumeroriented viewpoint VISION 2020 Heading for the next 100 years of Shiseido

12 What is a Beauty Consultant? 12 An indispensable player in consumeroriented marketing

13 Summary 13 Shiseido's medium- to long-term growth strategy Mihoko Nagai Vice President, Corporate Communications Beauty consultants as key messengers of brand value Chikako Sekine Corporate Executive Officer Q&A

14 14 1. Beauty consultants (BCs) as messengers and creators of Shiseido's value 2. Vitalization of BCs for top-line growth

15 15 BEAUTY CONSULTANTS (BCs) AS MESSENGERS AND CREATORS OF SHISEIDO S VALUE BC: Beauty Consultant

16 Debut of Miss Shiseido in The origin of beauty consultants

17 BCs Working in 89 Countries and Regions 17 About 22,000 BCs Americas 7 Europe 63 Asia and Oceania 18 Japan 1 *Countries and regions where SHISEIDO brand products are sold as of April 2014 (including Japan) Japan About 10,000 BCs China About 7,000 BCs Asia (excl. Japan and China) About 1,600 BCs Americas About 3,100 BCs Europe About 700 BCs

18 Pillars for Conveying Value 18 BC = Brand advisors Convey the brand value through the five senses

19 Increase Brand Value at Point of Contact with Customers 19 To increase the brand value created by the marketing department by as much as % at the point of contact with customers to generate even greater customer satisfaction. Brand value (products, services) Brand value (products, services) Value created by customer care Strengthening of the ability to convey value Increase in new users & loyal users

20 Lead to Tomorrow's Sales and Lasting Growth 20 <Influence on the customer's intention to re-visit> Satisfaction with customer care by BC : Satisfaction with purchased products For purchases made after undergoing a consultation 2.5 : 1 (Quantified from the 2014 WEB survey results on BC customer care evaluation)

21 Lead to Tomorrow's Sales and Lasting Growth 21 Non-BCdispatched store VS. BCdispatched store Average sale per customer 1.3 times higher Number of customers (intention to re-visit) *For cosmetics specialty stores Average sale per customer Non-BCdispatched store BCdispatched store

22 OMOTENASHI 22

23 Worldwide Introduction of OMOTENASHI CREDO (Behavioral Guidelines) languages 89 countries and regions Kansei (Sensitivity and sensations) Engineering + Behavioral Science

24 24 Preparation Action Point 1 Well-maintained cosmetics Action Point 2 Well-maintained testers and tools Approach Action Point 3 First approach to attract customers Consultation Action Point 4 Comfortable treatment for customers Action Point 5 Beautiful ways of pointing things out and presenting products Action Point 6 A pleasant method of contact with the skin for customers Action Point 7 Introduction of products to stimulate the five senses of customers The following procedures should be performed collectively. - Explain orally (hearing) - Show tools (vision) - Have customers touch the contents and containers (touch) - Have customers smell the scent (smell) Comprehensive product introduction to stimulate the five senses will generate a lot of positive feelings among customers toward the products. Closing Action Point 8 Indication of intentions regarding after-sales service

25 Product Introduction to Stimulate the Five Senses 25 1Hearing 2Vision 3Touch 4Smell 5Touch Oral explanation Use of tools Touch the contents Smell the product s scent Touch the containers

26 Customers Are More Satisfied and the Product Is More Beneficial When They Have Touched the Product respondents in their 20s to 30s I am satisfied with the product Beauty lotion No demonstration Milky lotion Cream Effect of preceding demonstration The product is beneficial for me Beauty lotion No demonstration Milky lotion Cream Effect of preceding demonstration (Explanation of product only) (Explanation of product only)

27 Customers Are More Willing to Use the Product Once They Have Touched It 27 Product price customers are willing to pay Increase in product price % 0 UP 31% (Explanation of product only) 24 respondents With demonstration Higher price customers are willing to pay More willing to use the product (Neuromarketing technique)

28 Global Web Survey 28 Satisfaction survey for BC customer care (vs. competitors) Before introduction of CREDO After introduction of CREDO Change Superior areas Inferior areas ALL Regions Internet users survey, February 2011 Areas with no significant difference Total *The total number is different because of an increase in the number of countries where it is available

29 29 MIKA KADOYA, Shiseido Beauty Specialist Selected from around 10,000 beauty consultants nationwide, Mika received three years highly specialized training in an environment with a few select others to become a beauty specialist. Boasting excellent cosmetic skills and top class knowledge of the world within Shiseido, she won the Grand Prix Award for two consecutive years in the Shiseido Global Beauty Consultant Contest, which is an in-house worldwide competition of beauty consultants. As a legitimate successor of the best cosmetic skills and the spirit of Omotenashi of Shiseido, which have been nourished from its tradition of more than 140 years, she is currently actively involved in a variety of fields, including lectures inside and outside the company, events, TV, magazines, and more, not only in Japan but also overseas in European and Asian countries.

30 Beauty Tablet 30 Store tool for product introduction Manual text Communication Feedback

31 The Magic Mirror Can Be Experienced Anywhere in the 31 Country The Magic Mirror, a tool for revealing your unseen self The experience of seeing simulated makeup by simply looking in the mirror, which was previously only available in Ginza, is now accessible with the beauty tablets of BCs nationwide. Menu of colors that suit skin tone

32 Consumer-Oriented Marketing 32 In-house feedback of consumers' voices and BCs' opinions <Provide feedback from consumers' voices to the company> Information that only BCs can obtain from contact with customers Issues and ideas observed from consumers' standpoints Feedback input into the beauty tablet Transferred to the relevant department at the Home Office as soon as the next day 10,000 researchers continuing to increase customer satisfaction

33 Consumer Information Center: Collecting the Voices of 200,000 People Annually 33 In the Information Desk Rating, our Center received three stars, the highest rating, for two consecutive years. (Survey conducted by the Help Desk Institute-Japan in 2013 and 2014)

34 Products Improved in the Early Stage by Reflecting Consumers' Voices and BCs' Opinions 34 I would like a portable case. Customers appear confused as to how to put it away in the case. 巻きアー儒 Renewal with a case Foundation brush Attach an explanation label explaining how to put it away. MAQuillAGE True Cheek I like the cream, but the container is slippery and stressful to use. The nozzle is too hard to remove. It is stressful for customers who use it every day. Improvement of the container clé de peau BEAUTÉ La Creme Improvement of the container Prior Mask-In skin toner and milky lotion

35 Important Touch Point in Creating Core Fans 35 Beauty consultants to lead to lasting growth

36 36 FOR TOP-LINE GROWTH - BC VITALIZATION -

37 Areas to be Strengthened to Meet the Expectations of Customers by Channel BC remembers the faces and names of customers BC invites customers for another visit WEB survey in Cosmetics specialty stores BC allows customers to look at the products without speaking too much General Merchandise Stores Welcoming atmosphere in the entire store Department stores BC's make-up is beautiful Drug stores BC differentiates the cosmetics the customer wants to buy from others BC speaks to customers at a good time

38 Inbound: Confirmation and Proposal of Needs with the Beauty Tablet 38

39 Vitalization of BC Employment and retention of talented individuals Challenging but worthwhile activities 39 Employment of 500 fulltime employees Appointment as full-time employees Foster a sense of responsibility Improve motivation Adequately varied evaluation Placement of the right people in the right jobs Further evolution into a professional beauty group

40 Innovation (Proposing a new kind of BC) 40 BC in store Web BC Beauty therapist

41 Goals of VISION Everything based on a consumeroriented viewpoint VISION 2020 Heading for the next 100 years of Shiseido

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