Marc Rey believes “luxury is still about aspiration and emotional connection.”
While everyone in the beauty space has been speaking about digital disruption, Rey (CEO of Shiseido Americas) believes digital development is not a technological shift, but a change in business model that enables consumer intimacy and builds a lifetime connection. He must know a thing or two, since as a global entity, Shiseido Co. Ltd. comprises 42 brands, with $9.2 Billion in annual sales, making it the fifth largest beauty company in the world. Shiseido Americas, for which Marc is responsible, is the third largest beauty company in the US, and the market leader in digital and make-up.
Rey shared his views on the industry in a conversation after his keynote address at the Harvard Business School Retail and Luxury Goods Conference.
Marc is a jovial and charming Frenchman who entered the beauty industry after spending time at McKinsey and several leading consumer companies. He is also a truly global leader who has embraced Shiseido’s philosophy of omotenashi as a key cultural differentiator in his organization. It’s likely his natural inclination to connect personally with people is what has made him so successful at the 145 year-old Japanese company.
In his words, omotenashi at Shiseido has two meanings. First, “the consumer is at the center of everything we do.” It’s about “the respect with which we treat our consumers, how we listen to them, how we go through a phase of discovery with them.” Second, “it’s about the respect we give our employees. We invest in our people, trust them, and give them opportunities to grow with Shiseido. It’s almost a family type of feeling.”
Consulting to luxury.
Of his time at McKinsey, he remarks “it’s a great school; not only of content knowledge, but a great school for integrity and intellectual honesty.” It’s no secret about a quarter of HBS graduates will pursue consulting immediately after graduation. For those who are keen to transition to luxury products, he advices focusing on operations and implementation, as these will make the most difference in industry.
In his view, premier consulting firms can be described as “auberges espagnoles”, a French expression that roughly translates to “potluck”, indicating that “you can find what you want to find; it’s an excellent vantage point.” He believes one should forge one’s own path from the varied possible experiences in order to position oneself for the next step, whether that is entrepreneurship, general management, operations, or anything else.
The role of technology in beauty.
Rey thinks the beauty market is experiencing significant disruption from technology. “Competitors of the future might be Google or 23andMe.” Shiseido plans to stay relevant by pursuing digital integrations and adapting to changing consumer behavior. “We have to connect with the heart and soul” and engage in a conversation. He thinks the old days of brands projecting their message onto the customer are over. “Beauty is no longer topical, but experiential and deeply personal.” Rey finds this particularly important because “technology can be a little cold.”
One way the company is embracing technology is by making acquisitions in companies that specialize in artificial intelligence and personalization. Several brands within the Shiseido portfolio are now experimenting with cosmetics specifically made to match an individual’s skin tone and type. Made2Fit from bareMinerals is probably the most prominent, which is a uniquely formulated foundation. This is part of the overall trend in beauty to focus on the diversity of consumers, across the full spectrum of races and ethnicities, many of whom have been historically underserved. “It took a long time for the beauty industry to recognize diversity, particularly in its ability and willingness to address the beauty needs of customers with darker skin tones. It’s long overdue. But now it’s happening and that’s a good thing.”
While Shiseido is at the forefront of the digital space, Rey warns about getting carried away with technology. “The ultimate personalization is the emotional connection. Luxury must come with an element of surprise. There has to be something special. There has to be magic.”
Think long term.
Marc Rey gave a final piece of advice over dinner for future business leaders: “Don’t do short term stuff. Do the best for the future. Think long term. It’s the best thing I’ve learned from the Japanese.”
Sergio Velasquez-Terjesen (MBA ’19) is a hodophile, epicure, logophile, and chemical engineer. He indulges in learning about cultures and people through gastronomy, visual arts, and language. His favorite things include sunny autumn days, long distance running, Champagne, and artisanal chocolate.