Exclusive interview: How Shiseido is focusing on Asia for future success in the travel retail space - CEO
Lesné said that Shiseido Travel Retail plans to focus its core activities on the Asia-Pacific region as the market shows some of the greatest growth potential
He added that current forecasts estimate that the beauty segment will represent a potential market size of US$26 billion by 2021.
Reinvigorated interest in J-Beauty
In the third quarter of 2018, Shiseido Travel Retail experienced organic year-on-year sales growth of 42%. Last August, the company said it has aimed for the division to hit ¥100bn ($900) in sales by 2020.
The company’s success in the region is partly due to the renewed interest in Asian, particularly Japanese, beauty brands. The interest is especially strong from Chinese consumers which have been key in driving growth in APAC.
To capitalise on the robust market, Lesne said the firm plans to expand its brands further into the region.
“Other than our four core brands – SHISEIDO, Clé de Peau Beauté, NARS and Dolce&Gabbana – IPSA and Laura Mercier are also a focus for our Asian markets,” he said.
“We will be expanding these brands further in the region as their performance has surpassed our expectations and has set a solid foundation for us to further grow our business in the next phase of Vision 2020.”
What millennials want
To continue its strong growth in the region, Lesné said the division will continue to place focus on millennial travellers, travel exclusive products, and digital innovation.
With more and more millennials taking to the skies, Lesné highlighted the importance of creating more immersive and impactful campaigns to capture their attention.
“Millennials bring with them a host of different demands and needs. They are looking for experiences that are personalised and memorable, something that Shiseido Travel Retail has been delving into and creating, to allow travellers to have greater brand engagement.”
Some campaigns that Shiseido Travel Retail has successful executed include SHISEIDO’s Beauty of Thailand campaign and Ultimune #StrongSouls campaign that “incorporated a sense of place”, said Lesné.
Additionally, he added that Travel Retail Exclusives (TREX) will continue to be in popular among travellers, as most of them see duty free shopping as an opportunity to buy something unique.
“TREX are gaining in popularity, making up a significant proportion of our overall portfolio. We are constantly working to create a robust TREX offering for our consumers, such as introducing bestsellers in travel retail-specific sizes, which are also popular due to their value and exclusivity,” he said.
Hyper-connected millennials are also driving another trend in the industry: digitalisation. Lesné regards digital and mobile technology as a mainstay in the industry now and believes the industry will see dramatic change in this area over the next five years.
“What used to be grand ‘ideas’ half a decade ago, are now becoming a reality. The industry is gradually adopting digitalisation – it’s now part of all brand owners’ strategy,”
The NARS Lip Gallery is one of the innovative concepts launched by Shiseido Travel Retail last year. It gave consumers the chance to interact with the brand in a different way.
“It had engaging elements with a digital focus that was designed to attract our target consumer, the female Chinese millennial,” commented Lesné.
The elements included the NARS Digital Lip Wall and the NARS Virtual Lip Trial app. The latter an augmented reality app that allowed users to play a game and try NARS lip shades digitally.
Lesné added: “It will be exciting to see the new concepts that are imagined, the boundaries that are pushed and the memorable experiences we create for travel retail consumers.”
Technology and digitalisation is also manifesting itself in a different way in the travel retail sector. Lesné commented that creating omnichannel shopping experiences will be a big focus going forward.
“Increasingly, brands are shifting away from resources operating in parallel, and instead, creating shopping experiences that cater to the consumer pre-, during and post- trip, with campaigns that operate across [online and offline platforms] that really ‘speak’ to each other.”
He added: “For us at Shiseido Travel Retail, we have the luxury of utilising Shiseido Group’s Digital Centre of Excellence and Consumer Market Intelligence teams to leverage digital technologies to create captivating animations and successful omnichannel campaigns that are appealing to our target consumers.”