After more than two years of planning, Aveda is set to unveil a key piece in its global expansion strategy: launching in Japan.
The company's first mark in the country will be with a three-level facility in Tokyo's trendy Minami Aoyama area this fall, noted Dominique Conseil, president of Aveda, who visited here in May to announce the official launch of the brand to the Japanese market. The space will include a shop and cafe on the first floor and a salon and spa on the second floor and basement, respectively.
Global expansion for the brand has been a goal of Aveda's parent, the Estee Lauder Cos., since it purchased the lifestyle brand in December 1997. And with this launch, Aveda has a president who's at home in the market: before assuming the presidency of Aveda in July 2000, Conseil had previously been president and representative director for Cosmelor Ltd., Japan, the L'Oreal Parfums and Beaute division that oversees the Lancome, Helena Rubinstein and Biotherm skin care and cosmetics brands and the Ralph Lauren, Giorgio Armani and Lanvin fragrances in Japan.
Still, Conseil isn't complacent. "Japan is always a Western company's biggest-ever challenge, and Aveda is no exception," said Conseil. Also, he added, "the economy is disappointing currently, not only in Japan, but also around the world. The reason we decided to proceed with our launch is that we have a long-term focus. We know it will take 10 years to capture the full opportunity Japan offers us. Obviously, economic cycles are irrelevant over a period of 10 years."
"Aveda's success depends above all on our ability to connect to these customers, the `cultural creative,' that make our brand what it is," said Conseil. "The general state of the economy, positive or negative, is irrelevant to whether or not we manage to connect with this consumer group. One might even think that Aveda will make an even greater difference to these consumers when times are tough."
To underline the brand's commitment to the market, Conseil noted that the brand is planning to open other retail locations in Tokyo, although he said locations and time frames for their openings are still in the planning stages. However, "we don't plan to operate by ourselves any other lifestyle salon and spa besides [our location in] Minami Aoyama. This is because we are not in the business of owning salons; this is the business of our customers whom we don't want to compete with," said Conseil.
After the brand has established itself in Tokyo, Osaka is next on Conseil's wish list, followed by a rollout nationwide. "We intend to roll out a similar plan in Osaka and surrounding areas with one flagship to inspire potential salon and spa owners, and a few retail locations," he said, noting that piece of the puzzle will come only after Tokyo is firmly established.
Conseil declined to comment on projected sales for the brand's first year in Japan, although industry sources estimated the brand could do upward of $500 million in Japan by the end of its first five years there.
Conseil is hopeful of the brand's success in the market, pointing out the synergies between the brand and the culture. "The nature-loving spiritual environmentalism that Aveda promotes has made sense to Japanese people for thousands of years," he said. In fact, Conseil thinks that Japan's hotly competitive market will become a major source of inspiration for Aveda's marketing and research and development teams. Indeed, the market has already spawned one hair care line: Light Elements, a four-item styling line formula, which began rolling out in the U.S. in February. And Conseil expects more lines to come: "By submitting our existing products to the `torture test' of more demanding consumers and by addressing specific needs by new products, we became able to not only address the needs of the Japanese consumers, but also become a lot sharper around the world, including our home market," said Conseil. "In other words, instead of globalizing from the home market, we started to globalize from any market where the consumers are the most demanding vis-a-vis one particular product category."
And Conseil sees the entry into the market as a partnership. "Aveda's introduction in Japan is very timely," he said. "Consumers have suffered from too many corporate responsibility flaws like misleading product labeling. Once Japanese consumers understand that Aveda's culture is truly founded on transparency and disclosure, there is little doubt they will partner with us."