CASE STUDY: Shiseido applies store makeover

Japanese cosmetics brand Shiseido has overseen an Asia-wide makeover of its expanding retail business

Shiseido is rolling out Cegid's cloud-based retail software to over 600 stores in Asia to ensure standardised processes and systems throughout the group.

The project, due for completion in 2020, will lead to seamless shopping experiences and better customer service, as well as improved stock management and in-store selling thanks to centralised control and real-time visibility on retail operations.  

Mobile devices are being introduced in 2020 to empower staff with the most up-to-date tools to engage more effectively with customers as it ramps up its omnichannel and international retail expansion efforts.

The phased rollout across six countries - including Vietnam, Malaysia and Thailand - follows a successful pilot in 30 stores in Singapore during 2019, and previous deployments of Cegid software across various brands and stores in the UK and France: for NARS lipsticks, bareMinerals makeup and Serge Lutens perfume.

Background

Founded in 1872, Shiseido is one of the oldest cosmetics companies in the world. Despite this, it has a strong pedigree in innovation and technology, buying up start-ups and beauty brands – for example, Giaran, a virtual robot which allows consumers to apply makeup via their phone screens and use artificial intelligence to suggest colour matches or lip-sticks to try on.

Shiseido owns numerous brands and subsidiaries worldwide, in addition to its founding label, the best-selling cosmetics brand in Asia. It is present in over 120 countries, has 10 production sites, and employs 46,000 people.

The skin and hair care company is on its way to becoming a billion dollar player in the travel retail market after achieving sales of more than US$500 million in the first half of 2019 and has seen 20 percent growth in many parts of Asia.

President and CEO Masahiko Uotani says it plans to shift all of the beauty house’s activities toward a consumer-oriented focus and enhance the Shiseido brand globally with more of its own retail stores.

The cosmetics and fragrance producer has already experimented with its own pop-up stores, including at Dubai and Singapore airports, set up in key travel retail locations during the last year to give visitors a glimpse of the future of skincare via interactive games, a digital wall and skin consultations.

Retail challenges

The cosmetics industry, much like retail, is highly competitive and many brands are under pressure to launch more and more products and open new channels in a constant battle to drive growth. Increased speed, efficiency and profitability through more automation and technology are other drivers.

Shiseido is launching makeup from its top beauty brands including NARS and Dolce&Gabbana Beauty in travel retail to attract globe-trotting shoppers, alongside new store openings, including a new flagship store which opened in Singapore in December 2019.

“Shiseido and many of our brands have traditionally been found in department stores, but there’s now an emphasis on opening more freestanding stores to give us more exposure, direct customer engagement and control,” says Roger Lim, head of IT at Shiseido, Asia Pacific and Travel Retail.

Beauty secrets

Cegid Retail’s unified commerce platform will prove instrumental in identifying best-selling ranges to help target customers in different locations - whether in department stores, airports or own-brand stores - and advise staff on what customers from America or China are likely to prefer. For instance, best-sellers among Americans include Shiseido’s Ultimune and NARS Orgasm blush, while for Asian consumers, lips are a growing segment along with makeup and skincare.

“Asian customers are especially led by promotions and expect high levels of service, with technology playing a key part in that role,” says Lim.

The retail point-of-sale software provides accurate, real-time information on stocks and sales and can prove vital in checking stock availability for customers, or for making sense of complex discount programmes. Staff can view a customer’s purchase history and offer advice and recommendations based on their profile for added-value selling. Merchandising tools also help automate replenishment, keeping shelves looking fresh and fully stocked with the right products for the right location or customer.

“For airport and travel retail stores, it’s more about offering exclusive offers and different products to capitalise on a captive environment,” he adds.

Retail innovation

Shiseido Asia Pacific has taken the IT project under its wing and refers to it internally as “Engage, the new retail way: the journey to technology transformation and digitalisation.”

After successful integration of the retail software in Singapore, store staff now feel empowered to provide customers with much more pertinent information, including targeted loyalty schemes and personalised offers. Reporting across the business has also improved:

“Everything is in one system and with a more systematic approach, governance is easier. There’s also the flexibility to drill down further into reports and consolidate data for smarter and more rapid decision making.”

Opting for a cloud solution also made sense, given the ease of adding new stores or functions as the business continues to expand overseas. Cegid Retail is already adapted to setting up in multiple countries and localised for different languages, tax systems, currencies and retail practices across Asia.

“Retail and consumers are evolving fast, so we needed an IT partner that can continually innovate with the times and adapt to our business and consumers demanding shopping expectations,” says Lim. “Cegid provides us with a retail ERP backbone, marrying omnichannel sales, order and inventory management, in-store operations and loyalty all in one easy-to-use platform. It’s given us a solid foundation and model for every country we operate in.”

Other countries in the Asia Pacific region - including Korea and Australia - are expected to follow next.