Entering 2024, major beauty brands are all simultaneously re exploring the cost and timing of offline channels.
Specifically, foreign beauty brands still prioritize the CS channel and view it as a new source of growth for e-commerce after saturation. Meanwhile, domestic beauty brands that have accumulated a long-term advantage in offline channels have entered a new stage of integrating and downgrading channels such as department stores.
SK-II is one that reflects attention. Its latest move is the opening of a brand new downgraded counter at the Shanghai New World Rural Market.
“Ten Mile Nanjing Road, A New World” is located in the Nanjing West Road New World Township in the Shanghai Focus Business District. Due to its superior astronomical position and century old trade civilization secrets, it is a window for high-quality exchange between brands and consumers. Therefore, it is not difficult to understand why SK-II chose this as the first stop for downgrading the Shanghai counter.
New World Township itself is also synonymous with inheritance and renovation. SK-II experienced the largest transformation and downgrade in its history of closure in 2019, and now it is New World Township’s turn to witness a new chapter of SK-II’s coverage in Shanghai.
Shanghai New World Township
“Product+Service” dual pronged approach, offline experience constantly downgrades
The newly downgraded SK-II counter has not only moved to areas with higher customer traffic in the market, but also integrated the original counter structure, color matching, and display plan. The most eye-catching highlight of the essentials is undoubtedly the downgraded SK-II Skin Light Lens Tester (MMS).
Maintain 5 seconds in front of this detection device equipped with AI point recognition skills, and without any fighting, you can immediately obtain accurate analysis of the entire facial skin condition.
The analysis results were obtained from 1296 data points – the detector divides the skin at the points horizontally into 324 points and vertically into 4 dimensions, capturing skin performance in multiple dimensions. Based on a rigorous selection of 1.2 million precise databases from Procter&Gamble’s internal data, this detector can provide users with amateur and accurate analysis results and customized skincare plans.
On the day of the closure of the new counter, Amber Liu Yiyun, a friend of the SK-II brand who personally visited the site, was one of the first people to be affected by this SK-II skin light lens detector. She exclaimed with surprise that her skin was only 26 years old, mocking the beloved product PITERA that had been around for years ™ Immortal Fire Yinghua is a secret that keeps the skin in good condition.
SK-II brand friend Amber Liu Yiyun
In fact, the dual approach of “product+service” has been SK-II’s consistent strategy since entering the Chinese market in 1998. A report by Xinhua News Agency in August 2009 recorded a historical turning point in SK-II’s continuous downgrading of offline players.
At that time, SK-II opened a brand new counter at Shanghai New World Department Store, which not only sold a full range of products, but also provided amateur beauty inquiries and nursing services. SK-II was also driving the SK-II crystal clear sensory mask global shopping campaign at that time. The sensory mask mouth was equipped with three areas: skin trial area, product trial area, and audio-visual sensory mask area.
Nowadays, looking back, SK-II has realized the cost of monopolizing offline channels in the pre e-commerce era – not only in product arrangement and sales channels, but also in providing diverse experiences and shaping brand costs beyond purchasing actions. And this negative cognition is actually SK-II’s insight into the quality of the relationship between “brand channel user”.
This is also why SK-II has been able to maintain its pace in the Chinese beauty market over the past decade while not falling behind the trend in terms of channel changes.
The “2023 China Beauty Market Growth White Paper” (hereinafter referred to as the “White Paper”) released by the China Department Store Trade Association indicates that China’s beauty terminal channels have gone through three stages: offline, online, and integration, from the 1990s to the present.
Before 2010, the offline period was largely dominated by domestic high-end beauty brands like SK-II, which occupied high-quality channels such as department stores that were not uncommon at that time.
The online period from 2010 to 2017 provided an opportunity for domestic brands to break free, and at the same time, cooperation in offline markets became increasingly fierce. Domestic beauty brands have also turned to online pursuit to add space. SK-II is one of the pioneers, having entered mainstream e-commerce platforms such as Tmall, Vipshop, and JD.com from 2012 to 2015.
The online channels are becoming increasingly mature and saturated, promoting the entire beauty market to enter a period of channel integration after 2017. Today, the omnichannel structure has almost become a consensus and standard configuration in the industry.
During the omnichannel era, rediscovering the cost of offline channels
Looking up, offline channels, especially department stores, seem less important. At least this is no longer the only choice for beauty brands. Moreover, offline channels are facing difficulties in shrinking customer flow after experiencing the impact of the epidemic. In the “Report on the Growth of China’s Department Store Wholesale Industry from 2023 to 2024” jointly released by the China Department Store Trade Association and the Feng Group Lifeng Research Center, a survey targeting department store wholesale enterprises showed that about 70% of sample enterprises reported that the passenger flow in 2023 did not return to the level of 2019.
On the other hand, online channels are gradually entering a stage where traffic surplus is almost exhausted and customer acquisition costs are increasing. According to the Annual Report of Tiktok E-commerce in 2023, 42% of the self broadcast traffic of Tiktok E-commerce brand in 2023 will be paid traffic, and the degree of self supported paid traffic of beauty and skin care products will be higher than the average level, accounting for 62% of the self broadcast paid traffic.
In this negative context, the importance of offline channels is beginning to be re examined.
The argument is almost indisputable. The aforementioned White Paper clearly states that even if departmental traffic is diverted by online channels, offline department stores are still an important occasion for beauty, especially for high-end beauty brands like SK-II.
In fact, the offline cost has never been denied, whether for consumers or brands. Even in contrast to online channels, the more Dao can highlight the exclusive cost of offline channels.
From the perspective of consumers, after being tired of online price fluctuations and higher trial and error costs, people also hope for the immediate satisfaction of offline shopping pleasure, as well as diverse sensory experiences. These are all things that live streaming rooms and purchasing chains in two-dimensional screens can never provide.
For brands, creating explosive products online may be easy, but offline channels are the space to showcase a complete product matrix and communicate the brand’s three-dimensional abstraction; Online may be able to achieve precise traffic, but it is helpless to replace the deep chain interaction caused by offline point-to-point exchange, one-on-one personalized services, and consumers. Using a more sales oriented approach, offline channels are more conducive to brand promotion and increasing user stickiness.
SK-II Shanghai New World Township Counter Downgrading Opening Sports Scene
It is not difficult to reach a consensus, but what is difficult is how to find a way to fulfill it. After more than a decade of changes in the offline wholesale industry, it is no longer appropriate to simply replicate the early form to structure offline. In the era of omni channel, the direction of offline channel growth and how to maximize its unique cost have become the focus of industry exploration.
Action entered China’s high-end beauty brands as early as the 1990s and has fully experienced the changes in Chinese market channels. SK-II has been exploring the mysteries of these achievements in practice.
In fact, in addition to the newly downgraded counters mentioned earlier and the SK-II Crystal Clear Feeling Mengzhongkou Tianxia Shop Tour, SK-II has also continuously landed “Crystal Clear Realm” pop-up stores in Hainan in the past few years with a focus on social wholesale, triggering consumers to embark on an exciting SK-II exploration journey with a playful interactive plan.
It is precisely these creative channel downgrades that have enabled SK-II to continuously expand its customer base in the Chinese market. According to data provided by the brand, from July 2023 to present, nearly 50% of SK-II department store transactions have been driven by new customers.
“SK-II has been in China for more than three years, and we have been continuously improving our online and offline experience, delving into diverse channel structures, and constantly renovating to win consumer weariness. The promotion of new customers and the trust of loyal customers have become a strong and meaningful growth force for SK-II.” This is reflected by Endy Wang, Vice President of Global Sales and Sales in SK-II China.
Products and brands are constantly evolving, and SK-II continues to deepen its structure
From knowing how to do it, to being able to find ways to implement ideas, it actually hones a brand’s multiple strengths. Compared to online, deep cultivation offline means that brands need to have sufficient patience and determination to expect long-term rewards, but this does not mean that capital is the only important prerequisite.
Is the channel understood as a preface to loading substance. The essence here refers not only to the products and services that are not seen, but also to the brand abstraction and tone that are reported from various interactive details. Compared to online channels, offline channels may be more compatible with substance; If we want to distinguish more carefully, independent brand stores and department stores have greater room for confession than CS channels and KA channels.
From this perspective, having a high-quality essence that can support offline channels, including strong product power and rich cost ideals, can provide consumers with a sense of reliability, freshness, and lasting consensus, which is the key to maintaining the vitality of brand offline channels.
SK-II Shanghai New World Township Counter Downgrading Opening Sports Scene
SK-II is such a brand.
Since its establishment in 1980, SK-II has been the exclusive focus of PITERA ™ The stability and functionality of the product have been honed over time, without the accumulation of large items like the Immortal Fire Yinghua.
After losing this imperial identity, there are also impressive legendary novels. In a sake factory in 1970, scientists discovered an elderly brewer with wrinkles on his face but delicate and smooth hands. They knew that the secret was hidden in the brewing process. After deep research and textual research, scientists could not find one of the 350 kinds of yeast for special fermentation at that time, so they found a skin beautifying identity with high-energy anti-aging function, namely PITERA ™。
If such a novel is still a distant expectation across time and space for today’s consumers, then SK-II’s brand ideal of “rewriting luck” and its sincere concern for women’s growth in the long run are the original places where SK-II truly gains consumer recognition and wears a sense of long-term companionship.
Brand narrative novels usually rely on pen and ink impression and other carriers, and the Internet is naturally a more convenient channel for spreading. SK-II’s films that focus on women’s issues, such as “She Finally Goes to the Dating Corner”, “Why Don’t They Return Home for Chinese New Year”, VS # Rewriting Luck # Animation Series, “Life, I Choose It Myself”, “Why Doesn’t She Not Zhu”, which have not been promoted for many years in a row, have sparked several climaxes in social gathering – it is unclear that people feel a strong consensus, and this is also the highest criticism of a brand to some extent.
The most impressive move of SK-II, which has been deeply rooted in the Chinese market for many years, is how it has persevered at the same cost in changing channels and industry formats, continuously improving its brand power, product power, and channel power, and always striving to provide better wholesale experience and emotional unity for Chinese consumers. This is a valuable resume that SK-II has gained through years of exploration in the Chinese market, and it is also an inspiration that it can bring to the entire industry.