Technology shapes the new beauty landscape

New chief growth officer says technology and tactical M&A will play major roles in driving Shiseido's expansion.

Marc Rey - ShiseidoTechnology is not only changing the way leading global beauty company Shiseido connects with consumers but it’s also making a big impact on product development and distribution. Leading this revolution is Marc Rey, president and CEO of Shiseido Americas, who added the newly created position of chief growth officer for the Shiseido Group to his responsibilities at the beginning of the year. In this expanded role, he is looking for opportunities for growth, both organically and through strategic acquisitions.

Rey says, “We’re very ambitious but it’s a bit of a misconception that the position of chief growth officer is basically a statement that we want to grow our marketshare and increase our financial performance. While that is true, we also want to think differently about the future and bring in new ideas to reinvent what the Shiseido Group is going to be in the future.”

The path to reinvention requires a more direct consumer relationship as per shifts in the beauty market. “We really want to move to the next level, increase direct sales and integrate technology into our beauty thinking and into building a much more long-term and closer relationship with the consumer.”

Shiseido is in the second phase of its Vision 2020 strategy, a transformation that began in 2014 after Masahiko Uotani was made president and CEO of the global company. The strategy focuses on growing its portfolio through digital acceleration, new business development, innovative acquisitions and partnerships.

Shiseido MakeupIn addition to his other responsibilities, Rey is also global brandholder for the NARS, Laura Mercier and bareMinerals brands and leader of Shiseido’s commercial business in the Americas. He also oversees Shiseido’s Centers of Excellence for Makeup and Digital, in addition to the company’s newly established Technology Hub.

The Technology Acceleration Hub based in Cambridge, Massachusetts is dedicated to creating new disruptive models for consumer engagement and intimacy.

Rey says, “The Technology Acceleration Hub is where we’re exploring how to integrate everything happening in AI, the internet of things, voice activation and augmented reality and then use it as a way to connect with our consumers. This is the kind of thing that’s not pure product but it certainly helps to make the relationship with the consumer richer.”

A good example of how this works involves MatchCo, one of the technology companies Shiseido acquired in 2017. With this technology, consumers can order customized foundation created in their exact skin shade simply by using a mobile phone to take five photos of their skin. The makeup is delivered to the customer in two days.

Technology is being integrated into all aspects of Shiseido’s business including advertising and marketing.

Rey says, “In the past, it was very much a monolog type of marketing. Today, it’s not only a dialog we are having with our consumers, it’s a conversation.”

The beauty industry is in the vanguard of digital transformation, as its consumer base has moved en masse to mobile. Rey says that, “in the US, 83% of women use their mobile device in some part of their transaction when purchasing a beauty product. You see the same thing in Canada. Before, during or after the purchase, they check their phones for reviews, to find out what friends say about the product or to check the price. There’s no place to hide. Consumers have access to everything. We need to do traditional advertising to express our point of view but there’s a need to be extremely aware of what consumers are saying about your brand.”

Opportunities for the brand’s growth involve current consumer trends and evolving demographics. Two segments that Rey says are exploding in the beauty industry are the Chinese consumer and the 50-plus market, an aging population with the specialized needs of older skin.

Other trends affecting the cosmetics business have more to do with lifestyle than age or nationality. These include urbanization of the population. Rey expects that 10 years from now 90% of the world’s population will be in big cities and with that, there is the issue of protecting skin from pollution. He says there is also a very strong movement towards organic/clean/sustainable products, one that is important to Shiseido’s future goals.

“There has never been a more exciting time to be in the beauty industry. Engagement and intimacy with the consumer will bring long-term value to the Shiseido Group,” says Rey. “The very definition of beauty is being reinvented, and we are thrilled to be at the forefront of these transformations, helping to define the future of beauty.”