A look into Shiseido's digital transformation ambitions

Global beauty and fragrance company's chief digital officer talks through the significant transformation program designed to help it become more relevant to consumers

Shiseido is building a global customer data platform, investing in omni-channel marketing automation and driving real-time engagement capability as part of a major transformation program aimed at providing more relevant experiences to customers.

Shiseido has its heritage in Japan and the fragrance market. Over the last 20 or so years, it’s been rapidly growing its brand base and global footprint into complementary areas such as skincare and make-up. The portfolio today includes US and global brands such as Nars, Dolce & Gabbana fragrance, bareMinerals, Laura Mercier and Zadig & Voltaire.

Speaking at the Salesforce Connections event in Chicago, global chief digital officer, Alessio Rossi, said the group kicked off a major transformation program in 2015 following the arrival of a new CEO ambitious for global expansion, innovation and change.

‘Vision 2020’ incorporated three major priorities: Global customer data centralisation that could serve all functions in the business; omni-touchpoint marketing automation, by connecting CRM to media, for example, and building out a one-journey approach to customers; then collecting real-time customer insights that further tap into the needs of the consumer.

“We want to make the most of the trail she leaves behind,” Rossi said.  

According to Rossi, the new beauty shopper journey has become very short, articulated and fragmented.

“It’s definitely not linear and it involves a number of channels, touchpoints and devices,” he told attendees. “But these are not crossed randomly; there is a sequence and logic to how consumers pull them together in one reasonable sequence.”

Shiseido’s ambition is understanding the individual, moving away from clustering personas to applying data in such a way that it can identify and continue interactions seamlessly with a consumer when she shops across the portfolio of brands and different regions. It’s also about reducing the number of communications and building trust-based, longer lasting relationships with the consumer.

Core to these efforts is having a single global customer data model. Rossi said his team worked to identify which attributes it wanted to focus on initially for each consumer, starting with 150 base points. These are used whenever a consumer can be identified for trigger-based campaigns and range from product engagement and location to channel preference.

Across the whole meanwhile, Shiseido’s path to digital transformation is being taken in steps. “We had to do a lot of change management and programs at the beginning of this transformation in 2016,” Rossi explained.

“This required the group to orchestrate more transformative teams and use AI tools and in-depth customer insights to transform the company end-to-end around the changing shopper journey.”

Key is being channel agnostic. “From a change management perspective, this is the toughest challenge, as organisations are usually designed by channels. So we have been working to break all the silos and ensure these digital platform changes are something everyone in the organisation can use,” Rossi continued.  

The tech investment

On the technology front, Shiseido adopted Salesforce’s Commerce and Marketing Clouds in 2015-2016 as the foundation of its automation and digital personalisation strategy.

In addition, it has been acquiring or building complementary emerging technologies specific to the beauty space. In the last 12 months this list includes US-based startup, MatchCo, which produces custom mobile app technology that scans then matches foundation products to an individual’s skin type; and AI technology Giaran focused on virtual make-up trialling, colour matching and personalised make-up recommendations. Shiseido also debuted its own personalisation system, Optune, which uses environmental data as well as individual skin data readings.

Another objective has been expanding global ecommerce capability. To do this, Rossie said he started to establish benchmarks for each team, brand and region.

“However, we have been good at avoiding one big mistake, which is to consider these websites for the top-line,” he said. “We have designed these websites to become major marketing touchpoints, so we can apply data we know about consumers to make experiences more relevant and we can connect the dots on what is a very fragmented journey.”

Shiseido SVP of global ecommerce and direct-to-consumer, Angelica Munson, said the group has deployed Commerce and Marketing Clouds wrapped in analytics and insights to provide a core code base that could drive digital ‘flagships’. These digital properties are the number one engagement channel for data collection, she said.

The outcomes Shiseido is aiming for include collecting data and growing direct-to-consumer penetration, and leverage best-of-class technology to scale quickly as well as partner with other vendors to lift unique engagement with consumers.

“In 2016, we had a lot of challenges. The first was a fragmented ecommerce platform, multiple contracts for Demandware. We also a lack of ability to scale maintenance and grow successfully because we had different code bases for all brands globally,” she explained.

“We worked hard to remedy this with Salesforce plus our systems integrator partners. We know digital flagships are the place where brand equity is top of mind, especially in the prestige beauty space, for storytelling, and 24/7 access to customer service. They’re where we gather data, test, have voice-of-customer - ratings and reviews are so important in our category. Also, the nuances for beauty in terms of sampling, replenishment and the drive to store.”

While the back-end framework is unified, brands can reskin the digital front-end and adjust content through to merchandising, services and promotions to tell a differentiated story by region and brand, Munson said. Importantly, these can be done in rapid manner, she said.

To date, Shiseido has undertaken six flagship brand launches in the US, as well as several in EMEA, and also launched its first Commerce Cloud site in Japan. The group is also about to launch NARs in Japan in July. From there, further deployments are planned across the globe including South East Asia digital properties next year.

The priority now is to look at how to better integrate Commerce Cloud with Marketing Cloud to create new levels of personalisation and relevancy, Munson said.

Shiseido is also starting to use Salesforce Social Studio and is looking at extended media listening tools to empower the data it’s gathering on consumers.

The people problem

But while the technology is paramount to success, people and process change management has to be the foundational area for any transformation, Rossi said.  

“Without it, your technology can’t be successful,” he said. 

Shiseido prioritises digital capability against five pillars: Data and analytics, CRM, direct-to-consumer, innovative partnerships and education.

Read more: Why financial services companies should be in fear of the tech disruptors

Education is about changing the company one person at a time. This is not necessarily about hiring but transforming the existing teams by transferring knowledge from partners, coaching people and helping them grow to become centres of excellence), Rossi said.

“Like many other companies, we say people first, but what we mean is empowering our folks with knowledge,” he said.  

Shiseido launched a digital academy to train more than 2500 employees in six regions and three languages. It’s built out 10 curricula and seven global learning expeditions across three online global platforms.

“This is not optional – it’s part of everyone’s job as know this is where the future is,” Rossi said. “Everything has to have a knowledge transfer component with our partners, for example, as we’re trying to accumulate knowledge.

“Technology is just one part of the equation… it’s also investment in people and workflows, organisation workflows and partnerships, and a focus on change. There must be sitting across all aspects of the organisation, not just a digital team. Everyone has to come to the transformation party.”

  • Nadia Cameron travelled to Salesforce Connections as a guest of Salesforce.

 

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