Kahn Research Inc. Response:
The client did a US search to identify a “best in class” shopper marketing agency partner. I was asked to take the Strategic Planner lead function, and partnered with an Account Lead from the selected agency who had a 20-year consulting history in luxury cosmetics.
Our scope was to uncover obstacles, identify opportunities and develop strategies to grow sales for the Korean brand within the department store environment.
- Multiple trips to Asia allowed the formation of relationships with the Korean client team, provided time to observe the issues first-hand, and gave us the chance to be immersed into the Korean cosmetics shopping experience.
- Next, we developed a multi step research plan to uncover the core issues with younger shoppers, understand how the in-store consultant experience differed from that of key competitors, and understand brand perceptions and issues versus competition.
- We hired and oversaw Korean based research firms to conduct the local research in-language, while we provided the design and content. The overall design consisted of both qualitative (focus groups followed by in-home and in-store shopping experience ethnographic interviews), and quantitative research to measure impact of the issues as well as the opportunities.
- Our team was present throughout the qualitative research phase and the ethnographic in-home and shopping components.
The Result:
The research driven insights indicated several primary obstacles to success:
- The positioning of the line did not resonate with younger shoppers. It lacked a “reason to believe” these products change skin texture, tone and diminish visible wrinkles. Competitive products used clinical trial data to support their efficacy. Korean shoppers, just like US shoppers, spend money to achieve results, and they needed a promise to believe in.
- Shoppers did not experience the in-store consultants as truly knowledgeable and able to customize the solution to their skin. They felt that competitive consultants knew more about skin care, and were more genuine. They also did not feel the consultant took sufficient time to establish and build on the relationship.
- Finally, shoppers felt pressured to purchase the entire line, at great expense, versus being offered introductory products that would have deliver visible results and create opportunity for future sales.
We developed two major strategies to address these issues:
First, a results focused strategy to help consumers better understand and believe the product’s efficacy.
Second, a consultant focused strategy including enhanced training with greater focus on customer follow-up, as well as techniques to better identify lead-in product sales opportunities.
Both strategies were implemented and achieved success. Results-focused communications and messaging, while maintaining a strong Korean roots connection led to increased business with younger consumers. In-store consultants were given additional training, and follow-up processes were adopted. This resulted in increased customer value over time, and overall increased sales for the flagship brand.
The Challenge:
South Korea’s largest cosmetics company faced strong competition from US and Japanese brands within the Department store retail channel. Though overall sales were still strong, the brand wasn’t growing at the pace of competitors. Existing research indicated that their flagship brand was not being adopted as quickly among younger women, and had become associated with older women’s beauty regimen. The department store counter environment and consultant experiences are all critical, and both had issues. While a new counter design was planned, rollout would take several years, and some stores were not slated to receive the new design at all. The client believed the in-store consultants were not delivering a proper experience to each customer, and wanted to seek insights how to improve this process.