Huge growth potential as luxury brands generate about 7% of their revenue from e-commerce
Skin Inc is developing a chatbot to provide a more personalised client experience
Francois Arpels has joined Singapore-based skincare brand Skin Inc Global as board adviser of brand and strategy.
Skin Inc, which sells customised skincare products in more than 100 cities worldwide, will have access to Arpels’ decades of experience in entrepreneurship, strategy, retail, mergers and acquisitions, fundraising and more.
The company has been growing steadily since its inception in 2008, with market share doubling year on year. It has quadrupled its revenue since 2013 and is expecting its revenue to increase steadily in the next few years.
Arpels joins as the company actively grows its online and offline presence internationally. Arpels says that with his background in the luxury and lifestyle industry, he believes he can contribute experience in brand positioning, marketing and digital strategy to Skin Inc, and capitalise on these areas to help propel the brand’s geographical presence.
Arpels is the scion of luxury brand Van Cleef & Arpels, which was co-founded by his grandfather, and has an “intimate understanding” of the luxury and premium brands market.
He set up France’s first low-cost business class airline, founded Yearlings International, which focused on luxury and brand strategy, and Arpels Corporate Finance, which advised on positioning and strategy for mergers & acquisitions.
In 2014, Arpels set his sights on India to set up Brands & Beyond, a fund focusing on nurturing Indian-made lifestyle and luxury brands with strategic and operation advice. He is also co-founder and managing partner of Indian private equity firm IndEU Capital.
On his joining Skin Inc’s board, Arpels says that he was attracted by the brand’s entrepreneurial spirit, drive, innovation and unique selling proposition – converging beauty and technology, and pioneering the trend for personalisation in beauty.
“My personal mantra is thinking outside of the box to outperform competition. I am also particularly attracted to brands that deliver focused products and services. Skin Inc is a brand that aligns with that thinking – committed to innovating and pushing the boundaries while remaining focused on its USP,” he says.
Skin Inc uses an online diagnostic tool called My Skin Identity that uses a proprietary algorithm to diagnose skin needs and recommend a personalised blend of serums. The diagnostic tool was launched with the brand in 2008, making Skin Inc a digitally-born company and one of the first beauty brands to have a significant digital presence.
Disruption and expansion
According to Skin Inc’s founder and chief executive officer Sabrina Tan (pic, above), the company has disrupted the beauty scene with “the true and right concept of skin care.”
“Allowing consumers to create their own serum without owning a lab aligns with the shared economy consumption habits of today, which have seen businesses such as AirBnB and Uber rise to the top,” she says, adding that Skin Inc boasts the broadest range of customised skincare products of any skincare brand to date, making it a definitive global leader in skincare customisation.
Skin Inc aims to be “the Apple of skincare”, meaning it wants to continue being a game-changer. Tan says that she was determined to disrupt the beauty industry from the very start, leading her to work with industry experts to harness digital and technological innovation to deliver both Skin Inc products and the digital tools it uses.
“We were able to predict the future; merging beauty and technology has enabled us to be ahead of the curve,” she says.
Arpels says that his vision for Skin Inc is in line with this. In the next few years, he will be leveraging on his experience to expand the brand’s reach into a key market – China. The brand has already made inroads into the norther Asian region through a strategic investment from South Korean entertainment conglomerates Spackman Entertainment Group Limited and Spackman Media Group Limited (SMG), which will allow it to open concept and e-commerce stores, partner with key retailers, and take advantage of the brand power of SMG’s artists.
In terms of digital innovation, this year will see Skin Inc stepping up integration of digital technology with mobile-friendly tools for skin checks and harnessing big data to fine-tune its products. The integration of digital technology will take place across all the company’s touchpoints using the consumer data it has from the one million skin checks completed by the My Skin Identity tool.
Tan elaborates the plans to improve the user experience of the My Skin Identity Tool: Skin Inc is developing a chatbot to provide a more personalised client experience on platforms such as Facebook and WeChat, and it is experimenting with ways to incorporate augmented reality into the tool.
“Overall, Skin Inc is focused on building an effective omnichannel strategy for seamless customer experience whether offline or online,” Arpels adds.
Luxury in the new age
Skin Inc’s omnichannel approach leads in to Arpels’ opinion of how luxury and mid-sized brands differ in their approaches to capturing and growing market share, whether online or offline.
With luxury brands, relying on a truly unique product, bespoke crafts and superior service, all of which has been tested over time, and offering memorable experiences, means that strategies to engage with customers differ.
“A luxury brand will build an omni-channel strategy with a stronger focus on generating offline sales while a mid-range brand will build an omni-channel strategy optimising sales from all channels. Obviously, the higher price of luxury products has also an impact on the capability of driving sales on the web.”
Luxury brands generate about 7% of their total revenue from e-commerce, so there is a lot of growth for this channel. Arpels, however, does not believe that revenues generated through this channel will overtake revenues generated from more traditional retail channels.
Arpels clarifies that in this space, web and physical stores do not necessarily play the same but are complementary – luxury brands rely on the web as an informative channel to communicate the brand’s story and values while generating some sales while most sales are generated at physical stores.
“Consumers should also be able to get a premium experience be it online or offline as they are now able to choose when or how they wish to interact with brands; it is crucial that the brand experience is consistent.”
Balance online and offline
With micro-moments, the intent-rich moments of potential customers researching a product (either online or offline) before buying it, now normal behaviour, both brand consistency and e-commerce presence is important.
Though brands in the lifestyle and luxury space tend to be more conservative and traditional, making them slower to realise the potential of e-commerce to reach more customers and boost sales, many are starting to realise that the way to reach their biggest customer pool – the millennials – is online.
Skin Inc’s unique offering of personalisation is what has made it successful. Customers are not only able to customise serum blends to suit their skin needs; Skin Inc also offers choices of packaging and bundling of products into beauty and/or recovery programmes for the skin.
“Personalisation is derived from customisation, which has been important for a very long time but only a select few have been able to benefit from personalisation. In this digital age, consumers are looking beyond personalising products to being able to have a personalised experience,” says Arpels.
Skin Inc’s usage of data and market insights – open innovation – and big online moves such as working with ten global leading beauty and lifestyle YouTubers, has driven customer reach exponentially. Arpels points out that using digital and social media since the beginning enables the company to notice trends before they become mainstream, but that it also ensures it has a strong on-ground presence through events such as the Beauty Hackathon held in Singapore last year.
“Establishing a brand online does not necessarily mean doing everything online. It is equally important to engage offline to build brand love.”