KIKO Milano CEO on Global Expansion, One-Handed Lipstick & US Market Entry

Bonjour.

Welcome back, everyone.

This is omnitalk retail.

I'm Anne Mazinga.

And I'm Chris Walton.

And we're coming to you live from the Fusion Group booth here at NRF Europe with our day three of coverage here at the show.

And standing between Chris and I are the one and only Simone Dominici, the CEO of Chico Milano.

Simone, welcome to omnitalk.

Thank you.

Thank you for having me here.

We're so excited.

I have a lot of questions.

I bet you do, Ed.

I bet you.

I was really excited.

I saw you on the dock.

I wouldn't expect anything less.

And we got a little tease before.

There may even be some props that are shown in this segment, so.

Well, let's get to it.

So tell us about yourself.

Tell us about your background, how you became CEO and also about Kiko for maybe those back home.

Yeah, I was born in Rome and then I worked always in the consumer industries, but I worked in many different pricing tiers.

Consumer industry.

I was in food, in ice cream, in Unilever.

Oh, Unilever.

Right, okay.

And then I went into home care.

So I sold also VC cleaner and ring blocks of the 1 Euro.

And right after I went to Bota gave selling €100,000 crocodile bag.

So I went in the consumer products from €1 to €100,000.

Is there anything you haven't been involved in in the consumer?

I'm still young, so I have opportunity in the future.

But let's focus on Kiko now.

Let's focus on.

That is a big difference, though.

That is a big difference.

So tell us about Kiko too.

What is Kiko known for?

Kiko is the Italian beauty brand leading in the world who disrupted the market.

It disrupted the market by combining three elements.

So delivering a fun experience, playful, colorful, vibrant experience online offline.

Second one, unmatched convenience.

It doesn't mean we are the cheapest in the market, but you cannot find any product at the same quality of cheaper price.

So we commit to deliver always the best quality for money experience.

And the third one, cutting edge innovation.

We innovate more than any other competitors.

We launch more than 400 SKUs, new SKUs per year, out of which someone really breaks through.

Innovation.

And I will present you something exclusive for you.

All right?

Okay.

All right.

He's teasing it still.

Fun experience.

Fun experience.

Convenience unmatched.

And innovation.

This is the magic of Kiko.

Yeah, I will.

Three legs of the stool.

I know I can attest to that.

After visiting one of the stores.

I've never seen so many versions of eyeliner at one store under one brand, and every one was different than the next.

Every formulation.

Well, so what brings you to NRF Paris?

What are you here to see?

What are you here to do?

Anything that like jumps out at you about this.

I think it's a unique opportunity to have the full visibility with what is happening around tech.

Okay.

Tech is becoming more and more important in beauty in order to deliver a personalized experience to each customers.

That's what we do.

We use data analytics and tech to give you a personalized experience.

At the end is always the customer experience that matters.

And tech has to be at the service of a unique experience.

Okay, so you mentioned the three legs of the stool or what the three things that the Keco brand is known for.

So I'm asking you a little bit deeper here now and say, within that kind of overarching statement, what are your priorities as you look to the business for this coming year?

We have priorities in four blocks.

The first block is keep elevating the brand.

We transform Kiko from a mass retailer into a global beauty brand.

Now we want to keep elevating, becoming an icon, meaning that we are going to curate more and more the assortment.

We are going to build our franchise around our key iconic products.

We have a gloss which is very iconic.

3D hydraulic.

A mascara which is maximo, very iconic.

A complexion which is full coverage very iconic.

The third one is a global expansion.

Kiko started in Milan in 1997 and bit by bit conquered the 73 countries.

But we are not strong in all countries.

For example, key priority for us in 2016 will be us.

Okay.

And then I hope you will find our products close to where you live in the coming years.

I do too.

And India.

India.

Oh, wow.

Okay.

Different strategy.

Yeah.

And if you want, I can go a little bit deeper and different go to market strategy, please.

US is a market where you cannot approach us as you approach Europe because the distribution in US and the way the people shop in us is very multifaceted.

So you need to have an hybrid go to market approach.

You need.

We will develop our own stores, which is our brick and mortar stores.

What we have developed in Europe in the last years, we have.

As a matter of fact, we have 1350 stores in 73 countries.

But stores are not enough in us to penetrate the population to engage customers.

You need to have our own D2C.

So we open our own E Commerce.

We partner with the major marketplaces.

We became part of the Amazon premium recently.

We partnered with TikTok and TikTok Shop.

Fourth, you need to be in a major department stores because some customers, some cohort of customers in us shop in department stores.

So we are now finalizing an agreement with the largest chain of department store in the US I cannot spoil you the name, but it's the largest one for which we will be present in them.

And another channel will be the beauty specialist.

So in order to succeed in US, you need to be in all channels, in all the touch points.

India is a different kind of market because to penetrate India there are a lot of regulatory, a lot of specific characteristic in dealing with the landlord and employees and being an employer that you need to partner with the local partner.

So we selected Reliance Beauty, which is a top leading companies in India.

And we are going to open end of October, the first stores in India in Delhi in the Mall of India.

Okay.

Wow.

Together with them.

Wow, this is great stuff.

My God, this is good.

I love this.

All right, well.

So Simone, as you're thinking about the, the technologies, you mentioned that technology is very important as you think about the future of where the beauty industry is going.

But what are those emerging technologies that you've really got your eye on that you think are going to be important both from an e commerce experience and from your stores experience as you continue your expansion into the US and India?

We have invested in designing our unified Commerce model which is leveraging, as I said, data and tech to provide a personalized experience to each of our customers, connecting all the departments of our company and all the touchpoint.

So we engage more than 14 suppliers.

Some of them are here, of course, in this expo.

From data analytics to customer data platforms to integrated inventory systems.

In order to enable our Beauty advisor to handle the conversation with the customer using the iPhone, where you have all the inventory, the order management system, when you have the customer data, your data here, the transaction is possible with a tap to pay.

So this become a store itself.

Yes.

In which the experience is fully done.

Through the iPhone, which is very important in beauty to be able to transact right at that moment when your beauty advisor gives you the product, avoiding the.

Queue at the cash desk.

Yes, yes, absolutely.

That's interesting.

You just unlocked something for me too that I never thought about too.

The beauty industry in general seems further ahead on this whole idea of omnichannel or unified commerce.

And I think what it potentially comes down to is the fact that you it's such an engaged sale in the store, relatively speaking, across retail, that you have to start investing in those types of technologies.

To make it happen.

So I'm curious too, are there any trends or new products that you're excited about going into this year as well?

I think that one of the great let's say effect of having a data driven culture in your company is that you can collect data from customers and you can really actively listen to your customers.

And then for example, our marketing department also starts the innovation program by listening customers.

One of the, let's say something was missing in the market and one of the key requests from our customers is to design product you can use only with one end.

Imagine you are registering and recording the content through your social.

You don't want to leave your iPhone to untap your lips gloss.

Wow.

Or you're having an interview like I'm now.

Wow.

You cannot do it with a, with a.

We cannot unlock with one hand.

That's why we designed.

Our marketing team designed this new product which is a lipstick line that you can use with one end.

It's a specific technology, comes in 12 shades.

12 I will apply to you later on.

Okay.

Yes.

Thank you.

Yes.

Can't wait.

And this you can use with one end so you can keep recording your content.

You, you can look at the mirror.

If you have a mobile, you can have an interview as well.

So interesting.

With one hand.

Think how many things you can do with one hand liberated.

You don't have to use two hands to open your products.

So this is a kind of innovation that starts by listening to the customers that were craving for it for asking for something that liberating one ends possible to use the one and only.

And it took a lot of technology as you can.

It sounds very easy.

That's good.

When technology the more it seems easy and facilitated people life, the more it's complicated to design.

Right.

So I'm very excited to ask my next question then which is where do you see what other technology or what changes do you see happening in the beauty industry now that you know, you think will contribute to more products like this being different in the next five years.

Like what other things?

What other enhancements?

I think all these boots that you see around you and these are beautiful expo.

The major reason for them to exist is to provide always a better experience to your customers and then by keep listening to them through all the different source but also shortening the time of developing new products.

So the ultimate challenge for us will be not to have 18, 24 months to develop new products, but to have 12 months, 9 months, 6 months to develop new products.

That is the ultimate challenge.

For beauty and where technology can really help in understanding what is needed in the market.

It's already an overcrowded market.

So you really.

To understand what is needed in the market in a very overcrowded market, you need to be very curious and convert information from the market in insights.

Right.

Once you have the insight, your scientific and marketing department, they need to be fast in designing something.

That's when time to market become more and more important.

And are you using any tools like AI in the develop, like in speeding up that development of those products?

At the moment, we use AI mainly in two areas.

Okay.

One is to analyze the price elasticity.

So every time you will launch a new product and we launch, As I said, 450 products.

So we price 450 products.

So we have an analytic AI systems that based on the past behaviors of our customers, understand the price elasticity of the product we are going to launch.

So we are precise in pricing.

The second one is forecast accuracy.

Because we sell more than 150 million products in these 73 countries where we operate with 1,350 stores.

So we need to be accurate in filling and fulfilling our supply chain.

And forecast accuracy means that the stores which is sitting in Kuwait has got a different needs than the one in Malaga, than the one in.

In the Philippines, in Manila.

So AI is used to really predict as accurate as possible what is needed in this specific store.

Okay.

Yeah, that makes sense.

When you have more SKUs too, there's more variability in the sales performance per SKU, which always creates a dynamic.

Sometimes the product surprise you.

Sometimes a product that was not meant to become a bestseller surprise you become a bestseller.

So you need.

That's why the time to market and the speed and velocity in replenish becomes very, very important.

Right.

So let's get you out of here on this.

Whenever we have a CEO on the show with us, we always like to learn as much as we can from them.

And so my question for you to close is, you know, you've been in role about three years.

What do you wish you knew then when you took the role that you knew?

Now?

That's a very good question.

I've been here three and a half years, three and a half years, four years.

I think I could dare a little bit more.

Really.

I think I was prudent in some acceleration of the business in some countries, in some categories.

Take for example skincare.

Skincare moved from 5% of our assortment to 11% of our assortment.

Sure.

Can become 20% in the market.

Skincare is more than 30% of our assortment.

And think about for example, face complexion, which is close to the skin care for US is only 20% in the market is 30%.

I think we could have dared more to bring top innovation, relevant innovation in a distinctive way and we could have accelerated even further.

Even if we doubled the size of the business of Kiko in the last three and a half years, I believe we could have done even more.

Wow.

Wow.

So that's interesting.

So you think you could have gone faster?

Yeah, I think so.

That's an interesting challenge for a new CEO from outside the company too.

Right?

Because you can also go too fast.

So.

So how do you think you would have done that?

I'm curious.

I think I could have invested more in deploying some of our innovation on a full speed.

I think the risk when you have so many innovation that you don't curate each innovation properly and then you don't give enough focus to a specific innovation.

That's why now we are limiting the number of innovation.

Rather than having so many proliferation of new products, we are limited.

And once we launch something innovative like this, we focus on making it big.

You go big.

Got it.

Got it.

Wow.

This is great.

Anne.

Yeah, this is a all timer for me.

This is a great conversation.

Thank you so much.

Thank you to you.

I'm gonna be running to get my hands on one of those lipsticks that I can use.

Not just one hand, just get one hand on that lips.

Enjoy the rest of the day.

We will.

We will.

Thank you so much.

Thank you so much.

And thank you to the Fusion group for supporting our coverage here at the show.

And as always, Anne, be careful out there.