Shiseido Applies Customer Data Platform to Make Up Beautiful Marketing

More than ever, businesses need to deliver personalized experiences that provide customers with real value. In a recent survey of corporate leaders, analyst firm Gartner reported that 81 percent of respondents believe their companies will compete mostly or entirely on customer experience. However, acknowledging that customers today expect personalized experiences and delivering on that expectation can be two different things. One of the biggest roadblocks is the inability to properly use customer data.

Shiseido, the fifth largest cosmetics company in the world, ran into this problem as it introduced a new online loyalty program. With brand values in the billions, and target customers of both genders and all ages, having a powerful, one-to-one customer loyalty program is essential to success in the cosmetics industry.

It’s worth noting Shiseido has vast experience with customer loyalty programs, having launched its first one in 1937. But it was only in 2012 that Shiseido added a digital component. By bringing its loyalty program online, the cosmetics brand also brought along a wealth of data. Inside Shiseido's app, consumers can browse catalogs, order products, search for store locations, and receive expert advice and product recommendations.

Unfortunately, Shiseido’s marketing organization quickly discovered it couldn’t keep up with the pace of new digital insights from the loyalty app. An audit of the brand’s dozens of customer touchpoints revealed a problem common to most large enterprises: an abundance of customer data sources that were disconnected from one another. To make matters worse, the conventional process of extracting, transforming and loading customer data was much too slow. Consequently, instead of making strategic offers to loyal Shiseido customers, the company had to extend offers based on educated guesses — hardly the kind of personalized experiences that will impress customers and result in greater brand loyalty and revenue.

Shiseido needed a way to bring all its data sources together in order to create a single view of each customer, which is no easy feat. Centralizing its own “first party” data was the initial challenge. The second challenge was bringing in third-party data from data management platforms.

Shiseido used a customer data platform (CDP) from Treasure Data to consolidate its owned data from website visits, store point of sale (POS), mobile POS, loyalty program and sample requests. Combining that data with the third-party data, Shiseido was able to create models for customer segments based on four types of data:

• Demographic: “Who is the customer?”
• Brand Loyalty: “How much does the customer like our brand?”
• Channel: “What paths does the customer take to buy products?”
• Interests: “What is the customer interested in?”

Gaining this rich understanding of core buyers enabled Shiseido to deliver personalized messaging as consumers browsed catalogs, searched for store locations and ordered products.

As the team began to deploy its CDP, they realized an important additional benefit: complete ownership of the entire data platform by the marketing team. Shiseido’s marketers were able to accurately assess each customer’s preferences and correlate this analysis with customer behavior.

Shiseido’s ability to design customer-relevant communications on its loyalty app led to quick and impressive results. In addition to reaching its goal of a truly personalized customer experience, Shiseido also saw increased revenue and growth. Modeling customer preferences drove a 20 percent in-store revenue increase per loyalty program member over the course of a year, an 11 percent revenue increase, and 38 percent growth in net income year-over-year.

An enterprise CDP allows retailers like Shiseido to know their customers better, engage them more deeply, and measure interactions accurately. Delivering these kind of personalized, one-to-one customer experiences makes customers happier and increases loyalty. It’s the quintessential symbiotic relationship for innovative retailers and their customers — and an absolute “must have” moving forward.

Rob Glickman is the chief marketing officer of Arm Treasure Data, a customer data platform provider. Rob manages all aspects of Arm Treasure Data's marketing, including go-to-market strategy, demand generation, corporate, product, partner and industry marketing.