In the view of YOSEIDO, when we are building a brand, we need to first consider: who am I, what I have, and where to start.
Every brand, though seemingly on the same track, possesses its unique brand DNA. For example, some brands may excel in marketing, others may focus more on product development, and some may have exclusive insights into user expansion. Therefore, it is crucial for brands, especially emerging ones, to first clarify their advantages.
YOSEIDO was very clear about its advantages from the beginning of its development. While many suggested starting from department store channels before entering CS channels, for YOSEIDO, CS was the advantageous channel. The brand could ensure price stability and supply chain stability, as well as guarantee consistency between online and offline.
However, the “ability” also implies significant costs. Without a financially robust group behind the brand, it would be unthinkable to prioritize “price control and channel management” at the initial stage of the brand. This is why every group, and every brand, has its DNA, and choosing a suitable development path is crucial for initiating offline operations.
It is important to note that regardless of the starting point, offline ultimately faces the same group of consumers. The inevitable question that brands will encounter next is: how can online and offline work together effectively?
For brands, this is undoubtedly a headache. Because the cost structures of online and offline are different, if online prices are higher, it can easily lead to dissatisfaction among online consumers; if offline channel prices are higher, offline stores may be reluctant to cooperate. Therefore, it is evident that online and offline form an inseparable community of interests.
In the past two years, we have also explored various methods, such as separating online and offline product lines. However, in the long run, this strategy inevitably leads to confusion in product positioning perception. We prefer that online and offline consumers establish a unified understanding and perception of the YOSEIDO brand. So, we need to consider where the differences between online and offline lie. Where do the profits from offline come from? What changes have occurred in offline business?
When cosmetics first entered China, many European and American brands regarded shopping malls as important offline traffic venues. At that time, the best malls, the best locations, and the best decorations could attract a considerable amount of customers for the brand. However, nowadays, shopping malls have gradually transformed from traffic venues to stock venues, and from sales venues to lifestyle experience venues. Now, the reasons for consumers to visit malls have changed: they hope to have a place outside of work where they can enjoy life.
Against this backdrop, offline stores have naturally begun to change. For example, some international brand offline stores have started to gradually shrink, and the store area has also changed. Many stores have set up negotiation areas, and brands hope that customers will sit down and experience the products.
Therefore, in the view of YOSEIDO, the primary function of offline has become “experience,” and the experiential function of offline has become increasingly important. Perhaps at the beginning of its establishment, the brand did not have such strong brand power, and the sales ability of beauty advisors was not as good as that of mature brands. Therefore, the most direct way to close a deal with consumers was through “experience,” and offline undoubtedly took on the first responsibility of “experience” and customer maintenance.
In addition, when we are operating offline, we must consider both gross profit margin and gross profit amount. Gross profit margin can be obtained through discounts, but gross profit amount can never be obtained through discounts. What supports gross profit amount is the brand and quality behind it. The stronger the brand power, the lower the gross profit margin may be, but the higher the gross profit amount. When building the brand, YOSEIDO hopes to maintain stable profit output while increasing the gross profit amount of all stores, allowing stores to expand their final profit amount while consuming existing inventory.
Currently, it can be seen that if pricing is well controlled, high gross profit products with high repurchase rates will provide significant assistance to the growth of offline revenue. Sometimes, there may be a surge in sales of individual products, but what ultimately determines whether it can help stores achieve long-term profitability is the total amount and the number of repeat customers.
Furthermore, to provide consumers with a better experience, a membership system is also very important. In this era where information flow is crucial, the membership system provides better welfare guarantees for brand consumers, integrating online and offline, allowing consumers to use online tools while also visiting stores multiple times. This is an area we are further perfecting.
As everyone knows, YOSEIDO entered the offline channel starting from small-scale CS stores. Initially, we chose to focus on distributors to develop the CS channel. In the past two years, we have started to establish our teams in top-tier stores. In the future, while maintaining cooperation with some distributors, we will also establish more service providers and start a true counter-operated mode. Of course, for YOSEIDO, counters are not the end but another starting point.
Thank you all!
