Shiseido Japan’s Optune skincare system delivers optimal care for each customer’s skin condition, and NRI has supported Optune’s development as a member of the project. We asked people from both Shiseido and NRI who worked on the project how this unprecedented business in the cosmetics industry came about, with features including personalization backed by IoT and AI, the development of a dedicated machine, the launch of a beta version, and the subscription business model.
Digital technology enables the creation of groundbreaking skincare
The Optune project started in January 2017 and was carried out at a brisk clip with the mission of developing a new, unorthodox business model from a consumer’s perspective and the goal of a market release by the first half of 2018. Even for Shiseido, with its 145 years of dedication to meeting the wide-ranging needs of customers through counseling by beauty advisors and its multi-brand strategy, it was inconceivable to customize a product itself using digital technology, says Shiseido Japan’s Michifumi Kawasaki, who led the project.
Michifumi Kawasaki, Shiseido Japan
It all began with the out-of-the-box concept of using different volumes of different cosmetics products depending on “fluctuations” in one’s skin condition, rather than always applying the same volumes of the same products. This radical idea led Kawasaki to envision a new service composed of sensing, analyzing, and solutions, and he says it was then that he realized how the use of IoT could bring about a more advanced level of personalization in skincare.
With the new service, customers first use the Optune smartphone app to take images of their skin and evaluate its condition. The climate, the user’s mood, and other factors will also be taken into account and data will be analyzed by a cloud server. Based on dermatologic intelligence that Shiseido has accumulated over many years, its proprietary algorithm will calculate an optimal combination of serums and moisturizers and their optimal volumes, and this information will be communicated in real time to the dedicated dispenser machine at the user’s home. The machine contains five cartridges chosen for each user, and dispenses serums and moisturizers in over 1,000 combinations. This is how Optune delivers care that is tailored to the user’s skin condition in a given moment.
In-house approach doesn’t work for development in the digital age
Keiichiro Hisano, Shiseido Japan
Still, it would have been extremely difficult for a company that had been making nothing but cosmetics to develop everything from cartridges and a dedicated machine to a system and all peripheral support involved in a service within one year, says Shiseido Japan’s Keiichiro Hisano, who was in charge of the business model and systems development. “In particular, when using IoT and digital technology, it’s impossible for a single company to provide the value that customers expect. It was challenging for us to adopt the approach of having other professional companies on board and to move the project forward together.”
So NRI, which had provided systems support for Shiseido’s “watashi +” and “hada pasha” services, joined the project, and handled systems development and other responsibilities. “NRI paid close attention to everything from challenges in executing the new income model of cartridge sales and the monthly subscription fee to alliances with various partners and hammering out requirements. They took an active role in moving the project forward, so it was really helpful,” Hisano says.
Using data to deepen marketing
Misuzu Kondo, Shiseido Japan
Six months after the launch of a beta version, Shiseido is using the tremendously increased collection of data to explore the type of message to be sent as part of effort to encourage continued use, as well as the timing for sending such message, says Shiseido Japan’s Misuzu Kondo, a CRM* officer. Previously, with online purchase histories and POS data, the company was unable to understand how customers used products after buying them. But “because customers turn on their machines and place their hands in them, we now know how many times and how often customers use the product; this is information we didn’t have before. I feel this will lead to a major CRM innovation. But this is an area where existing marketing knowhow doesn’t work, so we are doing trial and error with NRI to create a logic model.”
Satomi Tanabe, NRI
“To find out where the customer is stuck and what problems they have, we look at data with everyone and have discussions, and we discover something new every day,” says NRI’s Satomi Tanabe, who was involved in the project as a whole and supports data analysis.
Aiming for ultimate personalization
“Optune’s brand value may change drastically depending on how satisfied customers are with the results of the customization, and this makes it an unprecedented challenge. Analysis will need to be more precise going forward, and this is where NRI can provide full support,” Ms. Tanabe says enthusiastically.
“We want to deliver optimal skincare all the time to people who are busy with work and/or parenting and thus don’t have time to find the cosmetics products that work for them. So we’re refining the system and the business model for a full-blown launch,” says Kawasaki, adding the following vision: “Down the road, we want to try to achieve the ultimate personalization by developing sensing technology that, for instance, can detect the skin condition when a customer simply stands in front of the bathroom sink, as well as by enhancing the analysis accuracy using image analysis technology, and bringing the Optune service overseas.”
Optune App (a dedicated smartphone app) and Optune zero (a dedicated dispensing machine), Optune Shots (serums and moisturizers to be set in Optune zero)
※CRM Customer Relationship Management An organizational effort to maintain and strengthen customer relations. The goal is to improve productivity and enhance the enterprise value through this effort.
Nomura Research Institute, Ltd.
Corporate Communications Department