Shiseido shifts focus to ‘Gen Y’ consumers
TOKYO: Shiseido Co, the Japanese beauty company that’s 146 years old, is giving itself one big makeover.
To attract more coveted consumers in their 20s and 30s, the company is overhauling its entire Shiseido makeup line and discontinuing almost 100 products.
It’s being replaced with a new collection in September that marries popular Western trends such as bolder colours and matte cosmetics with Japanese flair for minimalist design and packaging that appeals to a younger crowd drawn to Asian beauty brands.
“What’s important is we can recruit new users to the Shiseido brand,” said president Masahiko Uotani in an interview on Wednesday. “We can now get into this new segment of younger consumers who are going to become long-term users for us.”
The company, which operates the millennial-friendly brands Laura Mercier and NARS, is betting huge on young consumers in a bid to keep up with the $440 billion global beauty industry that’s seen smaller brands gain followers while technology disrupts shopping habits.
Shiseido is targeting sales to grow 20% to almost $11 billion by 2020.
It’s also enlisting 16-year-old Russian figure skater and Olympic champion Alina Zagitova to help the company sell high-end beauty products. The skater will be the new face of Shiseido in marketing campaigns later this year.
Key to the company’s push among younger consumers is using the newly-launched cosmetics line as a way to hook them into using Shiseidobranded items.
Makeup constitutes about 10% of sales for the Shiseido brand, with the remaining revenue coming from skincare.
Uotani said he wanted to grow makeup sales to 30%. “We still have room to grow with younger, millennial consumers. They will use this, and we will introduce skincare products to them as well.”
“Shiseido will spend a record amount to market the new makeup collection in the second half of the year,’’ said Uotani, declining to give exact numbers.
“The company will roll out the products in 88 markets and expects them to sell best in the US, Europe and Japan. That will be followed by a roll out in China, where sales of NARS-brand products targeting millennials is skyrocketing,” he said.
Cosmetics sales are projected to grow faster than skincare in Shiseido’s key markets around the world such as China and the US, according to Euromonitor International.
“Consumers aren’t as brand-conscious when it comes to makeup, making it more effective for capturing new customers,’’ said Jefferies Group LLC analyst Mitsuko Miyasako.
“Shiseido’s always appealed to the mass market in the past, but now people’s preferences are fragmenting,” she said. “Now the company has to figure out what kind of segment it wants to target and the image it wants to project.”