On Friday, October 23rd I conducted an onstage conversation with Chanel Japan CEO Guillermo Gutierrez for the French Chamber of Commerce in Japan. In case you were unable to attend, below are some of my key takeaways from the discussion.
- There is a nearly doubling of growth opportunity for large Japanese retail stores in luxury cosmetics if they do things right. Overseas retailers intelligently cluster similar brands together in high traffic areas. Shopping malls and to some degree department stores tend to act merely as renters of space, with different brands and products placed haphazardly.
- In luxury cosmetics, the greatest growth potential is in e-commerce, but only if the human interaction experience of physical retail can be matched. AI will not help with that, but rather innovative ways a human consultant work with a customer remotely in real time. Existing e-commerce platforms are poorly suited for this. Most brands will likely need to build their own with the help of technology experts.
- The failure of online selling platforms like Rakuten and Amazon when it comes to premium and luxury is the focus on lower price of products, and in some cases a deliberate predatory strategy of killing targeted product categories.
- COVID has forced innovation in how cosmetic brands reach and sell to customers remotely. COVID has also changed what customers buy. Working from home has not eliminated the need or the desire to look good, but rather created the need to look one’s best online. Masks have accentuated the importance of cosmetics around the eyes.
- For those who lead brands in Japan, the opportunity is in trying new methods, channels and approaches aggressively and frequently. Keep what works. Drop what does not. The brands that will succeed in Japan are the one’s whose leaders who prioritize innovation fearlessly and whose global head office executive allow the latitude to do so.
If you find these takeaways provocative, keep a lookout for future onstage conversation events with me. Check the French Chamber’s events regularly, or better yet, join the French Chamber (https://www.ccifj.or.jp). Also, keep abreast of American Chamber events as well (https://www.accj.or.jp). Join the American Chamber’s Independent Business Committee, which I co-chair, and you will receive announcements of all the committee’s events, include those that I run.