SKIN FIRST MAKEUP SECOND SMILE ALWAYS
The Soul of Glossier Enters Seoul, South Korea Now is the time for South Korea to experience Glossier
An omni-channel launch plan for the initial global expansion Hyewon Jeong
Step into the Gloss Beauty brand Glossier started its journey eight years ago as an esteemed beauty blog, "Into the Gloss.” Into the Gloss quickly became a hub for women interested in beauty tips, makeup tutorials, product reviews, and the latest techniques from the beauty industry (Glossier: Most Innovative Company). By sharing this information, Emily Weiss, the founder of Glossier, was able to build a community of followers and to develop unique insights into the lifestyles and values of modern beauty consumers. Emily Weiss put these insights to the work with the development of Glossier, a beauty brand that is built on a simple message: “Skin first. Makeup second.” This powerful message resonates with consumers who identify with the health and wellness movement and who embrace their own natural beauty not the commercial definition of beauty projected in the advertisements of other beauty brands. Glossier is not about chasing someone else’s vision of beauty but is about embracing the natural beauty we are born with. As a direct-to-consumer beauty brand, Glossier has built its business by creating a trusting community of followers online. Emily Weiss understands the opportunity presented by social media to connect with the customers of Glossier and to build an Figure 1 Glossier Skin Tint Ad Campaign
ongoing dialogue with those who care
about and relate to the brand. In this way, Glossier turns online visitors into customers and customers into brand advocates.
In addition to building a community of followers for Glossier online, the brand has also created retail stores that serve as a clubhouse of the brand. These stores often begin as pop-up shops opened in unique locations and featuring an innovative approach to store design and the way Glossier associates interact with customers. An interesting example of the Glossier approach to retail stores can be found in the popup shop it recently created in San Francisco in collaboration with a diner, Rhea’s cafÊ. This innovative shop provides a customer experience that combines the joys of dining with beauty. When describing the concept store that Glossier opened in New York as a platform for the launch of their first fragrance, Glossier You,
Figure 2 Glossier pop-up shop at Rhea's cafe, San Francisco
Emily Weiss observed, "Everything about the experience is unique, from the way the customers physically interact with the fragrance to how the editors talk to the customers. We're excited to be bringing Glossier You to life offline in a totally weird and unexpectedly luxurious way" (Keller, 2017). Glossier now operates permanent stores in New York and Los Angeles and continues to introduce pop-up shops built on this unique vision of the store experience. While customers in the US have access to Glossier online and on ground, there is a new world of consumers waiting for Glossier in Asia, particularly South Korea.
Global Winning Strategies of Gentle Monster and Aesop Gentle Monster is a Korean eyewear brand that operates with a philosophy of “high-end experimentation.” Jay Oh, one of the two founders of Gentle Monster, said: “We want our customers to look gentle but have great passion and enthusiasm inside” (Gentle Monster looks beyond sunglasses). Like Glossier, Gentle Monster believes in creating retail store environments that are highly innovative in their visual presentation and approach to store design. Each Gentle Monster store has its own source Figure 3 Gentle Monster in London, United Kingdom
and inspiration which can range from a field in harvest to the philosophy of
Nietzsche. Recently, Gentle Monster opened a store in London inspired by the theme of “tiny alien beings obsessed with kung fu” (Hawkins, 2018). This innovative approach to retail stores has resonated with consumers around the world and turned the product category of eyewear into a compelling customer experience. In addition to its creative approach to retail stores, Gentle Monster has introduced eyewear products designed to deliver an Asian fit, glasses that are suitable for people who have wide cheekbones and a low nose bridge. Gentle Monster has provided new products and new shopping experiences successful in capturing the imagination of customers around the world. Gentle Monster currently operates 16 stores in Asia, Europe and the United States. Aesop is an Australian skin, hair and body care brand founded in 1987 by Dennis Paphitis, a Melbourne hairdresser with an eye for aesthetics and literature, a love of philosophy
and a determination to do things differently (Strickland, 2017). Thomas Buisson, general manager for Aesop of Europe, said: "Our core philosophy is to deliver products of the finest quality that speak honestly and intelligently to our customers" (Fetto, 2017). The Aesop brand is built around values that embrace high-quality products transparent in their development and effective in delivering results for customers. Aesop differentiates itself from other brands with a unique approach to store design that is created to reflect the local environment. Instead of replicating one store design all over the world, Aesop engages local architects in designing stores that are compatible with their surroundings and respectful of the communities they serve. “It is our intention to weave ourselves into the fabric of place and add something of merit rather than impose a discordant presence, and our consistent practice to use a locally relevant design vocabulary,” Aesop states boldly on
Figure 4 Aesop Nolita store designed by New York-based architect Jeremy Barbour in New York, United States
its website (Aesop's stores show sustainability). Chief executive of Aesop Michael O’Keeffe said “In existing cities, we try not to overextend ourselves and be happy with the size we get to. Aesop is not for everyone, so we won’t be in every department store or street. It’s about being comfortable with that and relevant to those early adopter customers in those cities” (Strickland, 2017). With the ethos of "do less and do it well," Aesop has been successful in building a network of more than 350 stores spread across 70 cities around the world.
The Beauty Market in South Korea is Ready for Glossier The beauty market of South Korea is estimated to be over US$13 billion in 2017, which makes it one of the top 10 global beauty markets (A bright future, 2017). Like Glossier, Korean consumers have a “skin care first” mentality which comes from their interest in enhancing their overall complexion. Jane Jang, the Senior Beauty Analyst at Mintel, commented: “The Korean beauty market remains buoyant thanks to fast-paced innovations and highly engaged consumers who don’t hesitate to adopt novel products delivering new beauty experiences” (Mintel). “Korean consumers are very sophisticated. Their interest in beauty and expectations of cosmetics are high, and they are willing to try new concepts,” L’Oreal Korea said in emailed comments to Reuters. “It’s a market where new trends emerge before potentially going global” (Lee, 2016). Adults in South Korea will spend more than one-quarter of their daily media time on a smartphone this year according to eMarketer’s latest time spent with media forecast. South Korea continues to have the highest daily share of mobile (non-voice) time in the world (Smartphones Will Capture). South Korea leads global smartphone penetration. 70% of mobile phone owners use a smartphone, and 48% of Korean online shoppers Figure 5 Smartphone usages in South Korea
purchase on their smartphone (Zaryouni, 2015).
Korean consumers care about the ingredients that go into the products they apply to the skin. They use their smartphones to research the ingredients listed on product labels to learn more about their safety and effectiveness. Hwahae is a cosmetics analysis app that empowers users to find the best cosmetics products for them. With a
Figure 6 Hwahae, a cosmetics analysis app
database of more than 2.8 million ingredients and 1.9 million user reviews of 79,000 Korean and international cosmetic products, Hwahae is a powerful resource considered by Korean consumers to be the first tool to use when deciding to make a cosmetics purchase (Hur, 2017). While South Korea is clearly an attractive market for beauty brands including Glossier, it is important to note that South Korea provides access to the Pacific Asia Market, a marketplace with sales for beauty and personal care valued at $141 billion according to Euromonitor. This compares to a market size of $92 billion in beauty and personal care for North America and Western Europe combined. The marketplace for beauty in South Korea includes not only sophisticated local consumers but also includes international customers from nearby countries in Pacific Asia. (See Appendix A for Customer profiles). A Marriage Made in Heaven: Glossier Enters South Korea Clearly, the beauty consumers of South Korea are ready for Glossier which will arrive as a pop-up shop located in Seoul on Sinsa Blvd. Sinsa Blvd, which is also called Garosu-gil, is home to an impressive Figure 7 Sinsa Blvd in Seoul, South Korea
lineup of luxury stores, art galleries and cafes, and has become a magnet for tourists and locals alike. The Glossier pop-up shop will feature a spa environment to encourage interactions between Glossier, estheticians, and customers while also allowing customers to experience the unique qualities of Glossier products. In addition to the spa environment, the Glossier pop-up shop will feature an event space where customers can sign up for makeup tutorials and personal skin consultations at the rear of the store. In this way, the Glossier pop-up shop will be more than a retail store but will be a platform for providing an intimate and compelling customer
Figure 8 Illustrative example of Glossier spa session
experience of the Glossier brand. This approach to store design will also give rise to many Instagramable moments and will maximize the social media exposure of the Glossier pop-up shop. The aesthetics of the Glossier pop-up shop will also build off the theme of a spa environment, featuring a water wall installation and soft colors in shades of white, pink and blue. Each makeup station will be supplied with a custom mirror embossed with a signature message from Glossier, “YOU LOOK GOOD.� The launch of the Glossier pop-up shop will be planned for August 2019. International beauty influencer, Irene Kim, will serve as a brand ambassador and the face of Figure 9 Irene Kim, wearing her Bunny Headband
Glossier in Seoul. Irene Kim is known for rainbow-colored hair, her opposition to cosmetic surgery, all things opposed to natural beauty and for her social media savvy. Irene Kim has an impressive 1.2 million followers on Instagram and has taken her place as a central figure on the fashion and beauty scene. Irene Kim will put her extensive reach as an influencer to work for Glossier through her posts on social media (#goodforyou) featuring her experiences with the Glossier brand, the pop-up shop and its products. In addition to her role as a beauty influencer, Irene Kim is also a fashion
Figure 10 Irene Kim exclusive
designer and will support the launch of Glossier in Seoul with an exclusive collection of beauty accessories. These accessories will include makeup bags, tote bags, pouches and headbands designed by Irene Kim and available only at Glossier Seoul. (See Appendix C for Irene Kim and her exclusive products at Glossier). Building the Glossier Community Online In addition to opening a pop-up shop in Seoul, Glossier will begin to make its products available to the market in South Korea through e-commerce on its newly established website. This website will feature the entire Glossier product range as well as the exclusive collection of beauty accessories designed by Irene Kim. Sales for the website and customer returns will be processed through the Glossier pop-up shop in Seoul. Glossier will put its unique understanding of the power of social media to work to create a new community of Glossier followers in Asia. To accomplish this, Glossier will create a dedicated team of multilingual brand representatives who will monitor posts from Asian consumers to Instagram and who will engage with followers to build lasting relationships.
Glossier will also utilize KakaoTalk, South Korea's most popular messaging platform as a key element of its digital marketing strategy. KakaoTalk plus friend is a special feature in KakaoTalk messenger that allows each customer to receive exclusive contents and updates from their favorite artists or brands by adding them as Plus Friend. Many brands in South Korea currently take advantage of this feature to build long-term relationships with their customers. Glossier will also support its entry into South Korea with the launch of a Glossier App which will function as a mobile shop and will provide another opportunity to build the Glossier community. Glossier customers will be able to access through the app product reviews and tutorials and will also have the chance to earn loyalty rewards Figure 11 Glossier App
points for their shopping.
Product Assortment and Financial Planning Product assortments for the Glossier pop-up shop in Seoul will feature best sellers from the brand with a focus on the critical category of skin care which is of primary interest to Asian customers. Assortments will also introduce new colors for foundations, concealers, and highlighters to compliment Asian skin tones. Sales for the Glossier Seoul pop-up shop are planned at $435,032 for Fall 2019 and are based on an assortment plan with an average stock of $165,500 and the inventory turn of 2.6. Please see Appendix B to review a complete financial plan for Fall 2019 and the assortment plan on which it has been built.
Going Global Given the success of the Seoul pop-up shop, it will become a permanent store location for Glossier. This store will continue to service e-commerce sales at the same time Glossier will open new pop-up shops in major cities in South Korea as well as in Pacific Asia. In South Korea, new pop-up shops will be opened in Busan, Daegu and Daejeon. With the interest of South Korean consumers in new beauty trends, this network of pop-up shops in South Korea will provide the opportunity for Glossier to test new products before making the investment necessary to add them to the product line. New pop-up shops will also be opened in Bangkok in Thailand, Pulau Ujong in Singapore, and in Shenzhen in Hong Kong, which will open the door for Glossier to become a major force for beauty in Pacific Asia. The strategy of opening pop-up shops as a path to global expansion will minimize the financial risk for Glossier at the same time it will provide significant opportunities for learning about new markets and for engaging with new consumers. Each new pop-up shop will feature a store design that reflects the culture, the geography and the lifestyles of its location while continuing to provide the benefits of a spa environment. It will be necessary at this point for Glossier to open a distribution center in Asia to service multiple store locations as well as the continued growth of e-commerce. The success of Glossier has been built on its unique approach to beauty and on its ability to engage with consumers in ways that turn novices into customers and customers into brand advocates. This strategy not only works for markets in the west but will resonate with beauty consumers in South Korea, in Asia and around the world.
Figure 12 Glossier’s future presence in Pacific Asia
Appendix A: Customer profiles #1 Ji-eun Kim, Seoul, South Korea Kim is 22 years old and is a student at Korea University in Seoul, where she is studying psychology. Kim is interested in people, but she is also interested in fashion and has a part-time job at a boutique to discover new up and coming designers. Kim enjoys spending time on YouTube where she likes to stay in touch with the latest fashion trends while also watching the latest how-to videos in makeup and skin care. Kim enjoys taking advantage of the rich cultural life of Seoul and especially enjoys the time she spends with her friend at museums and art galleries. #2 Mandy Chan, Shenzhen, Hong Kong Mandy is 31 years old and is a freelance photographer who enjoys traveling all over the world to capture the moment. Mandy is fearless on the trips she plans to exotic locations to support the professional portfolio she is building in photography. When she is not taking photographs, Mandy enjoys spending her time outdoors pursuing activities including hiking, camping and skiing. Mandy cares deeply about the environment and investigates sustainability when making decisions to buy. She also volunteers her skills as a photographer to support initiatives to protect the environment.
Appendix B: Six-month financial plan and assortment plan
Glossier Seoul Financial Plan Fall 2019 (000's) Net Sales Plan $ Net Sales Plan units Average Unit Retail Inventory Turnover Average Stock $ Average Stock units Reduction $ Reduction % IMU % GM %
435.0 18.3 24 2.6 165.5 7.0 43.5 10.00% 60.00% 49.50%
(000's) Net Sales % Fall Stock / Sales Ratio BOM Stock EOM Stock Reductions % Fall Receipts Retail Receipts Cost
August 74.0 17.00% 2.5 184.9 172.3 4.8 11.00% 66.1 26.4
September 78.3 18.00% 2.2 172.3 150.1 5.7 13.00% 61.8 24.7
October 65.3 15.00% 2.3 150.1 156.6 7.4 17.00% 79.2 31.7
November 65.3 15.00% 2.4 156.6 172.3 8.7 20.00% 89.6 35.8
December 78.3 18.00% 2.2 172.3 162.7 9.6 22.00% 78.3 31.3
January 74.0 17.00% 2.2 162.7 160.0 7.4 17.00% 78.7 31.5
Total 435.0 100.00% 165.5 43.5 100.00% 453.6 181.5
Key Assumptions: Sales plan of $435,000 is based on assortment plan with average stock of $165,500 and inventory turn of 2.6. Sales reflect the impact of the store opening in August and Korean holidays in September, December and January. Reductions planned at 10% sales to account for merchandise damages and mark out of stock. Inventory turn of 2.6 reflects high customer demand as well as sales from the shop and e-commerce. Assortment Plan
*Best Sellers Category Skincare Skincare Skincare Skincare Skincare Skincare Skincare Skincare Skincare Skincare Skincare Skincare Skincare Makeup Makeup Makeup Makeup Makeup Makeup Makeup Makeup Makeup Makeup Body Body Fragrance Fragrance Misc Misc Misc Irene exclusive Irene exclusive Irene exclusive Irene exclusive Irene exclusive Irene exclusive Irene exclusive Irene exclusive Totals
Sub Category Cleanser Moisturizer Balm Chemical Exfoliation Mist Moisturizer Sunscreen Mask Mask Serum Serum Serum Spot Treatment Eye Blusher Lip Eye Face Face Face Lip Finishing Powder Eye
Description *Milky jelly Cleanser *Priming Moisturizer *Balm Dotcom Solution Soothing Face Mist Priming Moisturizer Rich *Invisible Shield Mega Greens Galaxy Pack Moisturizing Moon Mask Pack Super Pure Super Bounce Super Glow Zit Stick *Lash Slick *Cloud Paint Generation G *Boy Brow Stretch Concealer Perfecting Skin Tint *Haloscope Lip Gloss Wowder Lidstar Body Hero Daily Oil Wash Body Hero Daily Perfecting Cream Glossier You Perfume Solid Glossier You Cotton Rounds Wowder Brush Glossier Sweatshirt Glossier Beauty Tote Glossier Bunny Headband Glossier Holohram Beauty Tote Glossier Sleeping Mask Glossier Rainbow Hair pin set Glossier Rainbow Pearl Hair ties Glossier Rainbow Jelly Hair ties Glossier #goodforyou t-shirt
# of SKUs 1 1 6 1 1 1 1 1 1 1 1 1 1 1 6 6 4 7 7 5 1 1 6 1 1 1 1 1 1 6 1 1 1 1 1 1 1 6 87
Average Retail $ 18.00 $ 22.00 $ 12.00 $ 24.00 $ 15.00 $ 35.00 $ 25.00 $ 22.00 $ 22.00 $ 28.00 $ 28.00 $ 28.00 $ 14.00 $ 16.00 $ 18.00 $ 18.00 $ 16.00 $ 18.00 $ 26.00 $ 22.00 $ 14.00 $ 22.00 $ 18.00 $ 18.00 $ 22.00 $ 22.00 $ 60.00 $ 4.00 $ 20.00 $ 60.00 $ 48.00 $ 16.00 $ 58.00 $ 18.00 $ 18.00 $ 18.00 $ 9.00 $ 58.00
Total Unit On Hand 180 144 216 144 144 144 180 144 144 144 144 144 180 216 216 216 180 252 252 216 180 144 216 144 144 180 180 296 284 180 180 216 180 144 180 180 216 180 7024
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
Unit Stock 3,240 3,168 2,592 3,456 2,160 5,040 4,500 3,168 3,168 4,032 4,032 4,032 2,520 3,456 3,888 3,888 2,880 4,536 6,552 4,752 2,520 3,168 3,888 2,592 3,168 3,960 10,800 1,184 5,680 10,800 8,640 3,456 10,440 2,592 3,240 3,240 1,944 10,440 166,812
Inventory Turn 3.0 2.5 2.5 3.0 2.5 2.5 3.0 2.5 2.5 2.5 2.5 2.5 2.5 3.0 3.0 2.5 3.0 2.5 2.5 3.0 2.5 2.5 3.0 2.0 2.0 2.0 2.0 3.0 2.0 2.5 3.0 3.0 3.0 2.5 3.0 3.0 3.0 2.5
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
Plan Sales 9,720 7,920 6,480 10,368 5,400 12,600 13,500 7,920 7,920 10,080 10,080 10,080 6,300 10,368 11,664 9,720 8,640 11,340 16,380 14,256 6,300 7,920 11,664 5,184 6,336 7,920 21,600 3,552 11,360 27,000 25,920 10,368 31,320 6,480 9,720 9,720 5,832 26,100 435,032
Appendix C: Irene Kim and her exclusive products at Glossier
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