ALBION President Shoichi Kobayashi: The more successful something is, the more it needs to be destroyed

Syukan Syogyo Publishing October 16, 2023, page 4

October 16, 2023 13:00

Syukan Syogyo Publishing Institutional Cosmetics Interviews

In short

Cosmetics industry more and more into a struggle for uniqueness and individuality
Progress is being made in "focusing on ingredients and raw materials" in both production systems and technological development
The key is not to change and be done with it, but how to evolve it.
Opened a flagship store in Los Angeles as a foothold for expansion into the U.S.
Challenging new channels and brands while planting seeds for new businesses

ALBION President Shoichi Kobayashi: The more successful something is, the more it needs to be destroyed

Since its establishment in 1956, ALBION has been striving to convey the joy and excitement of new cosmetics in order to realize its corporate philosophy: "As a leader in luxury cosmetics, we are committed to authenticity and spread beautiful emotions and trust around the world.

　We interviewed President Shoichi Kobayashi, who has implemented various reforms since joining the company and increased the scale of sales by about three times, about what is important for the company to become the "world's No. 1 luxury cosmetics manufacturer" from various perspectives.

The cosmetics industry is becoming more and more competitive,

The cosmetics industry is becoming more of a struggle for uniqueness and individuality.

　 --Looking back on your career to date, could you tell us what you think about it again?

　 Kobayashi: In business management and in life, there are times when you are in a difficult situation and there is nothing you can do. In such times of crisis, it is important to pursue what is inside (essence) without trying to patch things up or adjust the books. If you try to force yourself to make things right, you will suffer more pain later on.

　I believe that luxury goods are about endurance. We should be skinny when we should be skinny. My conclusion is that if you don't do that, you will suffer the repercussions later on.

　I mentioned earlier that what is inside is important, and there is an episode that led me to this conclusion.

　I joined the Saison Group because of my admiration for Seiji Tsutsumi. At that time, the company was at the peak of the bubble economy and its performance was so strong that it was flying off the charts. The number of new employees exceeded 2,500, so much so that the main venue for the initiation ceremony could not accommodate all the new employees. We continued to expand, culminating in the acquisition of the InterContinental Hotels Group for approximately 260 billion yen, which ultimately led to the dismantling of the company.

　I do not think that expansion is a bad thing, and I understand the desire of managers to expand. However, I feel that it is more important to focus on the substance of sales on the one hand while pursuing expansion on the other. We will continue to practice and pursue management that is grounded, commensurate with our abilities, and based on customer satisfaction.

　Of course, it is possible to double or triple sales in a short period of time by offering discounts or expanding sales channels. But we will not do that. That is the meaning of perseverance. We will continue to focus on the substance of sales.

　 ALBION the content of our sales is the pursuit of business that is based on each and every customer's satisfaction, and that is what ALBION way of life is all about. This is true whether we are in Japan or overseas. In this sense, it is natural that there will be periods of leanness and patience, especially in the luxury goods business.

　From 2015 to 2019, we were able to generate very strong inbound sales, totaling 60 billion yen (on a retail price basis) over a five-year period. After that, we suffered from the Corona disaster, but we are taking time to rebuild while focusing on the contents.

　Times have changed dramatically since the Corona disaster, but one thing has not changed. That is our customers' desire to be beautiful and to have beautiful skin. In order to meet these needs, ALBION will continue to focus even more on manufacturing and customer service. During the three years of the Corona Disaster, we managed to maintain the level of our operations while making full use of the online system, but this year we are finally back to normal.

　I am sure that we will continue to face a series of unexpected events, and only the unexpected will happen, but we will continue to face our work on the assumption that such things will happen.

　I also feel that the Corona disaster has "reset common sense. The dimensions of what is required are changing, and I have a sense of crisis that if we do not maintain the status quo, we will decline.

　I strongly feel that we need to respond to the premise that common sense has changed from the past, both in manufacturing and customer service.

　The number of men who are interested in beauty has increased overwhelmingly in recent years, something that was unimaginable five years ago. It is said that about 30% of people who go to beauty clinics are men, and I feel that this shows that common sense is changing.

　It is precisely because we live in such an era that we are taking on the challenge of creating products that have never existed before. We have a history of creating products and categories that have never existed before.

　In 1978, we launched Duke Marine Blossom, the industry's first dual-use water-drying summer foundation. It was ALBION that created the "whitening" category and popularized the term "beauty oil. Creating products that have never been seen before is one of the characteristics of ALBION. We will continue to actively create new products and new categories.

　We will spare no time or effort to create new products. We are prepared to use even the most expensive raw materials if they can be truly felt on the skin by our customers. We believe that this will ultimately lead to customer satisfaction.

　The cosmetics industry will become even more competitive in the future in terms of uniqueness and individuality. The era in which sales can be generated only by launching new products has come to an end, and we have entered an era in which sales cannot be protected. Customers will not come to us unless we can demonstrate our uniqueness and individuality, and I believe that it will be difficult to increase sales simply by launching new products.

About 50 years after its birth, it is still evolving.

Medicated Skin Conditioner Essential

Our commitment to craftsmanship lives on in our cloudy lotion.

Our commitment to materials and raw materials has developed in both the production system and technological development.

Our commitment to materials and raw materials has progressed.

　 --In the past, you told us that "it is important to fight through creativity and ingenuity, build a strong foundation, and pass it on to the next generation. In the past five years or so, please tell us about the initiatives that have made progress through creativity and ingenuity, and the points where the foundations have been put in place.

　 Kobayashi: In terms of manufacturing, we have made progress in the three areas of "attention to ingredients and raw materials," "development of extraction methods," and "accumulation of know-how at our own factories.

　Of these, our "commitment to materials and raw materials" has progressed the most. In addition to our own farmland, we have farmers throughout Japan and around the world who cooperate with us in the production of our original materials. We also utilize plant biotechnological technology to efficiently produce raw materials through cultivation.

　We are also promoting the development of original raw materials using various extraction technologies, centering on ALBION proprietary "subcritical dimethyl ether extraction" method. We will continue our efforts to maximize the inherent power of plants.

　We are also making steady progress in accumulating know-how at our own plants. Currently, more than 80% of ALBION brand products are made at our own factories, and we will continue to accumulate know-how by making products at our own factories through trial and error, except for products that cannot be handled by our own production facilities.

　As for open innovation, we are working on collaboration with Osaka University and Tokyo University of Agriculture, but we feel that the number of partners is somewhat insufficient. We believe that we can increase the number of partners and will continue to work on this issue in the future.

　 --Please explain your efforts to strengthen customer service.

　 Kobayashi: We have been focusing on customer service as much as manufacturing, and I don't have the impression that we are getting so tired of it, but I think it is necessary to pursue customer service tailored to today's customers.

　However, no matter how much the times change, the point of customer service is to "put the customer first. The "attentive customer service" that we have valued since our founding, in which we always think and act with the customer in mind, will remain unchanged. We believe it is very important to "have customers come back again" and "keep them as members for as long as a year" by providing the kind of customer service that only ALBION can provide.

　While the theme of "inviting customers to come back" remains unchanged, the way of doing so changes with the times, and we intend to flexibly change the content of our training in accordance with the changes of the times.

Shirakami Research Institute Extraction Research Building

Change is not the end of the story.

It is important how we continue to evolve.

　 --In an interview five years ago, you mentioned three policies that left a lasting impression on you, and "narrowing down the number of dealers" came at the top of the list. After that, there was the "introduction of FLARUNÉ." Where do you place this policy?

　 Kobayashi: I think "introduction of FLARUNÉ " ranks at the top of the list, surpassing "narrowing down the number of dealers," since it means eliminating the signature series "Exage," which has had a very large number of loyal customers for 25 years since its launch, and launching a new one.

　We do not believe that the current " FLARUNÉ " is all there is. The product lineup will change, and we will continue to evolve it further in the second and third years. To make it even better, it is important to change constantly, and I tell our development staff to keep changing things. We are not done changing "Exaje" to " FLARUNÉ " but it is important to evolve it to a better form once it is changed.

　Ana Sui," which set a new world record (at the time) for one-day sales of a newly introduced brand on the first day of its launch, has been saying since its introduction, "If you don't change it, it will decline someday," but because it became a hit at an unprecedented level, it has been unable to destroy its worldview.

　It is difficult to change something when it is selling well, but it is important to change it when it is selling well, because it will not sell well if you change it after it is no longer selling well. It is important to change things when they are selling well, because changing things that are selling well will make more effort and increase the possibility of sales.

　Since customers' needs are constantly changing, we need to keep changing our brands and series to make them even better. FLARUNÉ " is a series that was born from this idea, and the level of the product itself has evolved considerably compared to "Exage.

　--Can you tell us again how you introduced " FLARUNÉ "?

　 Kobayashi: People's awareness and values have changed dramatically since 1997, when Exage was launched. In this age of respect for diversity and individuality, the FLARUNÉ line was born with the concept of "tailoring to the individuality of the skin" and with the appeal of each product standing out even more.

　Looking at our target customers in their 20s and 30s, the environment and tastes are completely different today than they were in 1997. We decided to introduce a completely new series with a new concept, believing that we could not satisfy the needs of today's customers by improving "Exage" as an extension of its predecessor.

　We did not appoint any ambassadors when we first introduced the new series, and it was a quiet start, but I think it was a good thing that it was a quiet start in terms of changing the product for the better.

FLARUNÉ " skincare series

Left: "Lively Line" recommended for fall and winter

Right: "Bright Line" recommended for spring and summer

As a foothold for expansion into the U.S.

Opening a flagship store in Los Angeles

　--How do you think you should realize your policy of "becoming the world's No.1 luxury cosmetics manufacturer" that you have been pursuing since your establishment? Please explain your domestic and overseas (Asia, Europe, and the U.S.) strategies.

　 Kobayashi: The most important thing is to become "dominant" in Japan, not only in terms of sales, but also in terms of the sales floor environment and customer service. If we become dominant in Japan, we will be able to attract inbound demand, and this will also lead to increased recognition overseas. Our specific future goals are to have 100 stores with annual sales of 200 million yen, 200 stores with annual sales of 100 million yen, and 300 stores with annual sales of 60 million yen.

　If we can achieve these goals, we will be able to create customers and maximize sales for each and every store. ALBION basic concept is to contribute to the differentiation of the stores and also contribute to sales. If we can build such a strong foundation, I believe we will have a stronger structure that will not be defeated by advertisements, and we will have a deeper relationship of trust and bond with our stores.

　In order for cosmetics specialty stores to continue to prosper over the next 10 to 20 years, it is important for them to make constant efforts to increase sales, make up-front investments, and continue to improve the attractiveness of their stores. We will spare no effort to cooperate with such positive efforts, and we hope that as many stores as possible will increase sales and profits and grow.

　As for Asia, we believe that to some extent we can continue to compete along the same lines as before. We believe that we can compete well in China, Taiwan, Singapore, Malaysia, Indonesia, and Thailand.

　In Europe and the U.S., we believe that we will have a tough time unless we create specialized products to compete because of the differences in tastes, customs, sensibilities, and climate.

　We understand that it is not an easy market to sell products that sell well in Japan simply by bringing them to Japan, so we will first work to attract Asian residents in Europe and the United States, and then, as a next step, develop exclusive products suited to Western consumers.

　As part of this effort, we opened a concept-type flagship shop in the Venice area of Los Angeles in June of this year to offer lifestyle proposals.

　In the U.S., the department store business selling high-end cosmetics has generally lost its vitality, so we launched a directly managed store in an area that is at the forefront of the times, where international brand flagship stores, unique select stores, art galleries, and restaurants are located.

　It will be a little while before we reach that point, as sales will expand in earnest and the brand will become more widespread when we introduce exclusive products. First, we will approach Asian residents and work to penetrate the ALBION brand.

　In Europe, the hurdles to entry are even higher than in the U.S., and we are still in the process of formulating a strategy. If we do enter the market, we are thinking of street stores, but we have the impression that nothing is in vogue except for sweets stores. We will find a method that has a high probability of success, and we will try to conquer Europe.

ALBION GARDEN Abbot Kinney

While planting the seeds for new businesses

New channels and brands while planting the seeds for new businesses

　 --Lastly, please tell us what you would like to do toward the 100th anniversary and what dreams you would like to realize in the future.

　 Kobayashi: There is one thing I would like to see Albion do on its 100th anniversary, which will be about 30 years from now. I hope that ALBION unique character will have been inherited, and that the company will continue to practice its management philosophy, "As a leading manufacturer of luxury cosmetics, we are committed to authenticity and to expanding the circle of beautiful inspiration and trust throughout the world," in ALBION way.

　I want ALBION to be known as a high-end cosmetics manufacturer with a different way of life, and I want ALBION to continue to be exceptional. I hope that Albion will continue to have a culture of nurturing and cultivating cosmetics 30 years from now.

　I will turn 60 this year, and I would like to work on something new. I have no plans at all to open drugstores, supermarkets, or convenience stores, but I would like to take on the challenge of developing new channels, and I would like to consider developing new brands.

　We also believe it is important to plant seeds for the future by launching new businesses based on the concept of making people smile.

Related Keywords

This article appeared in Syukan Syogyo Publishing October 16, 2023 issue, page 4.

Cosmetics Market to Re-Expand by Gaining External Demand; 2030 Aims to be the Prime Era of Inbound Demand ■Executive Officer Interviews with Cosmetics Daily Necessities Related Companies ◎Shoichi Kobayashi, President, ALBION ◎Toru Nishiguchi, Director and Senior Managing Executive Officer, Kao Corporation ◎Hitoshi Suzuki, Director and Executive Vice President, Lion Corporation ◎Kiyomi Horii, Executive Officer, Shiseido Japan Executive Officer, General Manager, Prestige Brand Business Division ◎Kao Corporation/Kanebo Cosmetics Yosuke Maezawa, Senior Executive Officer, Cosmetics Business Division, Kao Corporation...