The K-Beauty Revolution: How Culture Drives Innovation

America’s multi-billion-dollar cosmetics industry thrives on consumers’ thirst for novelty—the next new service, formulation, or product—delivered through targeted messaging, packaging and promotion. While the United States is home to the largest cosmetics market in the world, there is perhaps no nation that prioritizes innovations in beauty and skincare as much as South Korea. From BB creams & egg hydration masks to snail cream, the innovations of K-Beauty are now taking the West by storm. At a recent K-Boom symposium hosted by Cosmetic Executive Women, it was reported that Sephora’s K-Beauty category grew more than 70% between 2015 and 2016.

The K-Beauty revolution is built on the willingness to blend cultural tradition and reframing raw materials found in local environments such as Jeju Island. With more than 25,000 beauty brands in the hyper-competitive South Korean market, being distinct takes tremendous creativity. This sense of excitement is evident no matter where K-Beauty arrives around the globe. All you have to do is walk through a pop-up store in Manhattan to experience the way K-Beauty engages the senses with fun, youthful, vibrant packaging and in-store displays. The formulations, and the delivery systems are designed to be distinctive, aesthetically appealing and communicate the efficacy consumers are looking for. Donna was first introduced to BB Cream when she conducted focus groups with users about their experience with this new skincare product. As women discussed the strengths of BB Cream, it was clear that they thought it was unique and, unlike so many skincare entries that promised the world, it actually worked! Women spoke about BB Cream in glowing terms describing it as the optimal blend of skin care and cosmetic attributes—an all-in-one product that combined hydration, sun protection and evening out skin tone. Women talked about the natural, dewy fresh, finished look it provided, which was even more amazing to them given the light texture and consistency of BB Cream. Their enthusiasm for this all-in-one product motivated Donna to give it a try.  Not only did BB Cream simplify her beauty routine, the results were as advertised by the users she interviewed. Today, the enormous appeal of BB Cream can be seen on the shelves, as most major brands have a BB Cream entry in their product line.

The Emergence of AmorePacific: Case in Point

According to Ju Rhyu, a K-Beauty consultant, the K-Beauty producer with significant U.S. presence is AmorePacific, whose North American sales were approximately $48MM in 2016. What’s the key to AmorePacific’s success?

The AmorePacific brand epitomizes K-Beauty innovation. The organization is interesting in its attempt to stay true to its Korean pre-war roots. The brand is built on the home-grown legacy of Yun Dok-Jeong, a mother of six who in the 1940s produced beauty products in her kitchen using local ingredients. This notion of bespoke botanicals underscores an “all-natural” image. Fast-forward to 2007, when AmorePacific’s R&D laboratories produced the ultimate combination, uniting skincare, sunscreen, and foundation into a single product that could be sold in the form of a compact dubbed the Cushion, a product that has since been duplicated by numerous cosmetics companies. By integrating its cultural roots with state-of-the-art processes, AmorePacific has effectively broken through and established a significant presence in the US market.

As a child growing up in Korea, Jane remembers raiding her mother’s makeup bag and playing dress-up with a treasured cache of Amore products. After her family arrived in the United States, it was hard to find Korean beauty products in mainstream stores, and so she naturally adopted the American brands that were more readily available. At the time, her mother’s Amore products began to seem outdated and old-fashioned simply because they had belonged to Mom. Several decades later, AmorePacific has transformed itself into a global brand, and reinvests 3% of its revenue to R&D where their 500 chemists and scientists from around the globe formulate and test new ideas.  Their global success—with $18.8 billion in market capitalization and 28.4% in sales growth in 2015—is a model for any organization that wants to transform its brand and become a worldwide powerhouse. As companies like AmorePacific continue to grow beyond their borders, it is imperative that they are innovative with their management practices, just as they invest in their R&D.

The Linkage Between Leadership and Innovation  

When a company attempts to sell its products beyond its borders, it requires “flexing” on the part of the organization. It needs to leverage its existing assets while delivering tangible benefits to the target audience with which it hopes to grow. The pace of growth also requires leaders who are willing to take risks in order to create new products. To leverage this diverse thinking from their employees, the organization’s leadership needs to provide the resources for new ideas to be generated. And, once the idea is developed, it must have the right advocacy to bring it to market.

It will be critical for the organization to consider two questions:

  1. How much will they invest in preparing their global leaders to demonstrate the cultural adaptability required to succeed in new markets that have distinct cultural norms from their Headquarters?
  2. How will they adapt their global business approach to work with customers based in other parts of the world?

It will require increased cultural awareness about what the employees and customers want in these new markets and increased self-awareness about what they need to do differently to remain relevant. Creating an environment that rewards innovative thinking will require intentional effort to foster the right organizational culture. We look forward to watching the next chapter unfold.

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Donna Fullerton is the founder of DMF Communications, which has conducted consumer research across diverse industries with a specialty in beauty for more than 25 years. A global leadership strategist and executive coach, Jane Hyun, is the founder and president of Hyun & Associates and co-author of Flex: The New Playbook for Managing Across Differences. Chapter: Leveraging Diverse Thinking from Your Teams to Drive Innovation

Does High Touch Still Play in a High Tech World?

Recently, my mother, who is in her eighties and not nearly a tech-nerd, insisted I download the Uber App for her phone against my protests and better judgment. Within a week, she found herself in the annoying predicament of having 3 Uber drivers arrive for the same call. She was at a loss about how to reverse the charges. Her query, “Where do I call for a refund?” I broke it to her that this was not an option which elicited a quizzical, frustrated reaction. Now, I’m agile and technologically savvy as are most of my friends, but who hasn’t had some sort of problem with a transportation app? Sometimes you just can’t register the correct pickup or destination address. Sometimes the app thinks you’re in Chicago when you’re standing in front of Madison Square Garden. After a few seconds of frustration, most of my peers can wait it out, or use an alternative without spending $20 for a ride they never take. The good news about these services, which often have obscure customer service options, is that some of them are rolling out programs for the growing population of elders, as well as disabled people, that include the option of calling a human being for a ride as opposed to manipulating a smart phone. In an effort to streamline, surge forward, pursue the cutting edge, all kinds of businesses can ignore the needs of many customers who still desire (and require) human contact.

This is a concern that cuts across demographics.

23% of millennials, for instance, who recently weighed in on acquiring a mortgage in a 2017 Borrower Insights Survey conducted by mortgage automation provider, Ellie Mae, named “more face-to-face interaction” as the second-greatest opportunity for improvement in the service. It makes sense that when your experience includes an emotionally charged, major purchase like a home, the human touch is still appreciated.

I’m amazed at the way the mail room of my building has changed in the past five years. Online shopping has officially exploded. Every single day now, there are a dozen or more packages of all sizes waiting for their owners to return home, with boxes from Zappos, Amazon, Etsy, Lands End, StitchFix and many more lining the floor. While those are all online shopping sites with reliable customer service, the online clothing retailer, StitchFix has gone the extra mile with a unique modelcombining data science and real human fashion stylists. Each StitchFix customer is assigned a professional wardrobe consultant. After the customer fills out a detailed questionnaire (and often hands over the link to their Pinterest profile) he or she can receive a box of 5 curated items on demand, or at regular intervals by subscription service. Returns are easy, and customers can personally interact with their stylist via brief messages. The data collected and analyzed through the profiles and questionnaires, as well as the returns the customer makes, are obviously critical to the plan. But in the end, a human analyzes the data, and picks the clothing to be sent to the customer.

There’s a lot of support for the combination of high touch and high tech. We haven’t reached the tipping point yet where people don’t need people. While many great companies rely on technology for a percentage of their customer services, they have fine-tuned the issues that can be resolved online, while others still reserve more complicated and urgent needs for a telephone with another human being at the end. They stay in step with their clients’ needs.

The need for the human touch extends not just to the customer. For all the talk of the practice of remote-working from the desert island of one’s choice, the growth of big tech hubs Silicon Valley and Silicon Roundabout in London happened because there are like-minded individuals huddling there, spurring creativity and competition among companies, having actual face-time with peers and employers, and social activities. And most importantly, many startup founders find that being in close proximity from day one is critical to getting the shop cranking. No matter that many startups have abandoned these areas for lower rents—new tech hubs pop up.

Companies as diverse as Paperless Post and The Four Seasons Hotels and Resorts are examples of companies combining high touch and high tech to meet customers’ needs. Paperless Post, which was founded as an innovative and convenient way to send and track eye-catching invitations and announcements online, recently filled the need for actual paper versions of their products by launching “paper.” They offer good quality paper at a variety of price points, and naturally, they offer a designer to help with customers’ individual needs. Some occasions, and enough customers, apparently, still warrant the personal touch of receiving a special announcement by mail. The Four Seasons, conversely, has created an app which serves to enhance their guests’ experiences. For many of the app’s conveniences, there is a human on the other end, analyzing and responding to requests and needs.

That’s a great lesson from a company inarguably synonymous with top of the line, personal customer service. As The Four Seasons brand modernizes and optimizes for both clients and personnel, it continues to distinguish itself as one of the most desirable in the world through the synergy of high touch and high tech.

As our population ages and new hires become younger and more technically innovative, it’s wise to take care to address any gaps between high touch clients and full and easy access to products and services. Have you taken the time to consider just how comfortable your clients are with the pace of technological advances? When clients feel pushed towards high tech faster than they are willing or able to go it can be a matter of educating both sides. Some simple questions and solutions offered in a Hubspot article address the push-pull of these challenges.

No doubt, technology is here to stay! The key is to recognize that it is best to factor in a level of personal touch, along with the convenience that technology provides, to enhance the customer experience.

Questions to Consider

  1. What challenges have you discovered in efforts to integrate high tech and high touch as your business moves forward?
  2. What experiments or solutions have you found that yielded positive results for your company?

The Wellness Movement Goes Mainstream

Traditional Medicine Embraces Health and Wellness Photo: Utah.gov

I find the WIKIPEDIA entry for “Wellness” so curious. It reads: “Wellness (alternative medicine).Wellness is generally used to mean a healthy balance of the mind, body and spirit that results in an overall feeling of well-being.” That seems a very fundamental idea–encompassing a person’s total health–and yet it’s branded as “alternative.” Makes one wonder what the alternative to a “healthy balance” is.

We live in abundant times medically, Western or otherwise, and it’s inarguable that technology has had a profound effect on consumers who are now able to access medical information of the traditional variety as well as within the wellness sphere with a few clicks of a keyboard or smartphone. Technology has made us more informed patients, and proactive in our preventative care. To think, just a few years ago, most people’s assessments of wellness came once a year at their physical! Now, we can track our progress through a variety of digital devices that count steps, monitor medication, and track sleep patterns, among other things. Everyone is looking for information, a holistic alternative, a leg up, a new experience, and sometimes a quick fix.

The medical profession, retail pharmacists, employers, educators and health advocates are responding in a variety of ways to empower consumers. One result is that CAM (complimentary and alternative medicine) and Integrative Medicine (IM) have been making their way into major hospitals and teaching institutions since the early 2000s. While IM draws a very sharp distinction between itself and CAM these two camps embrace some of the same alternative modalities such as Yoga, acupuncture, meditation, massage therapies and herbal remedies, to name a few. IM makes the distinction of using only proven practices based in science.

Consumers are taking good health into their own hands with great enthusiasm, sometimes for better or worse. The good news is there is a plethora of choices for the adventurous or simply the health conscious. The internet is rife with bad information, pseudo-science, expensive supplements (how do you know what’s in them?), innumerable diets, and MoonDust, but along with the questionable, fun, interesting and informative pursuits are available as well to enrich our minds, bodies and spirits. The response across diverse industries indicates the mainstreaming of wellness.

The travel industry has responded with everything from wellness hotels and voluntourism, to yoga and walking tracks at airports. Spas abound, with locations as classic as Golden Door, or as exotic as Ananda In the Himalayas. Progressive consumers often drive the trends, and wellness is a new status symbol.

Technology and healthcare leaders have also capitalized on the wellness trend. In recent years at The International Consumer Electronics show (CES), the yearly extravaganza of everything new in drones, TVs, virtual reality headsets, robots and dozens of other concepts, an increasing amount of square footage has been devoted to the health and wellness sector. This includes not only companies like FitBit and Garmin, but UnitedHealthcare, a company vested in how the intersection of health and technology may empower people to take greater control of their everyday health. In 2017, UnitedHealth showcased mobile applications and health technology products and services meant to provide better tools for bring information to consumers across the platforms they’re becoming accustomed to.

On a more practical scale, some forward thinkers have given a boost to public wellness through policy or investment in healthful initiatives in the last decade. Our former First Lady, Michelle Obama, was a great proponent of healthy lifestyle for both children and adults. She brought much needed attention to childhood obesity, food labeling, exercise and more. The Los Angeles Food Policy Council has enacted one of the most progressive food policy in the nation, adopted by both the City of Los Angeles and the Los Angeles Unified School District (LAUSD), where it’s becoming a model for the rest of the country. The goal is to build a Good Food system for all Los Angeles residents — where food is healthy, affordable, fair and sustainable. Another interesting initiative is an experiment devised by the tech investor Esther Dyson, called the Way to Wellville,wherein five communities around the country have committed to a multi-year, strategic, customized experiment to improve the health of their citizens.

The truth is, that no amount of organic food, nor taking a thousand more steps, aromatherapy, mindfulness, aspirin or acupuncture can guarantee longevity, but good choices can contribute to our quality of life.

What would it look like if good, healthy habits began early for everyone, and healthy food and lifestyle choices were status quo and available and affordable to all? To me, it looks like the world I want to live in.

Tapping into the Zeitgeist: #OscarsSoWhite Makes its Mark on Hollywood and Beyond

In our post, “After OscarsSoWhite, Now What?” we discussed just how far the movie industry had to go to reflect global diversity. Fast forward one year, it’s hard to disagree the 2017 Oscars were dazzling for people of color. Six black actors and Indian-Englishman, Dev Patel, vied for major acting awards, winning two. Moonlight, an independent film based on a semi-autobiographical play about the coming of age of a young, gay black man in Florida–which had no featured Caucasian characters–won Best Picture, upsetting what people thought was a sure thing for La La Land. African American actor, Mahershala Ali, won Best Supporting Actor for Moonlight, making him the first Muslim to win an acting Oscar. The response to the film’s win was a wider release; it was announced following the awards Moonlight was set to open on 1500 screens nationwide. The much admired and beautiful Viola Davis, a dark-complected actress who has spoken publicly about her body and hair insecurity, gave an impassioned acceptance speech upon her Best Supporting Actress win for Fences, again expressing her wonder at coming from abject poverty to a place in the spotlight. Another work, Erza Edelman and Caroline Waterlow’s Best Documentary Feature win, OJ: Made in America, while evoking sad and disquieting subject matter, tapped zeitgeist issues of race and justice and fame.

In response, voices we’d heard loudly in 2016 were hopeful, yet measured. April Reign, whose ubiquitous 2016 hashtag, #OscarsSoWhite, became an energizing rallying cry, pointed out that we have to be vigilant about inclusion of not only black faces and voices, but all the colors and circumstances that make up the real world. Her twitter post noted: “One year of films reflecting the Black experience doesn’t make up for 80 yrs of underrepresentation of ALL groups.” And realistically, the films we enjoyed this year were in production or pre-production for years before their release dates. So what gives?

#OscarsSoWhite undoubtedly was influential. In response to the outcry, Cheryl Boone Isaacs, President of the Academy of Motion Picture Arts and Sciences, planted seeds of change by successfully leading a campaign to diversify the voting membership. The hashtag also threw light on a small and specific film like Moonlight, and helped make Hidden Figures a box office smash, surpassing La La Land domestically by $17 million as of today. As several people have pointed out, however, the power structure in Hollywood hasn’t changed yet and remains predominantly white and male, but there’s no denying the door has been cracked open.

The phenomenal success of multi-cultural series television and online programming, and the growing population of millennials and those who will come after are propelling the rhythm of contemporary culture. Not only are millennials a more accepting generation, they are also more pragmatic about the long-term necessity of diversity. Shows like black-ish, Atlanta, Fresh Off the Boat, Scandal, Empire and Insecure explore sometimes real (controversial and painful) and sometimes outlandish themes. Why are these shows so popular, drawing large and diverse audiences? Because content is key. Millennials are interested in unique content providing an experience, over anything. (That’s kind of what all viewers want.) And millennials would like their ads to look the same, thank you.

The ad world has determined it’s content celebrating diversity as a central theme that has made the most successful campaigns in the last five years. Diversity casting is important, but it’s what advertising depicts and says that works — millennials respond to an experience and a theme reflecting the world they inhabit. They are also paying attention to what your company is doing with their profits, and what your company culture is like. And since they are the most diverse audience in history with purchasing power of over $1 Trillion annually, they can’t be painted with a broad brush. Mainly, they want to be authentically engaged or entertained by companies with some social consciousness.

I’ve always known TV had its finger on the pulse, and as the audience goes, so go the advertisers. We are moving forward.

Questions to consider:

  1. How well are advertisers doing when it comes to including diverse talent in media campaigns?
  2. How well are advertisers doing when it comes to tackling issues outside of racial diversity, such as gender, age and ableism?
  3. How has Millennials’ acceptance of diversity, in its broadest expression (i.e., race, socio-economics, gender expression, etc.), as the norm, influenced marketing to this coveted community?