Kelly Li: At our flagship store on 13th Street and Third Avenue in New York City, you see our Kiehl’s mascot, Mr Bones, who was first introduced 170 years ago. In the 1850s in New York, there was an influx of migrants, so he was used as a prop to help [sales assistants] combat the language barrier and highlight the different body parts that our formulations could help, so if a product was for your arms, they could point to it.
We have a recycling program in partnership with Terracycle within our stores, which features our recycling bin for empties. That’s related to our brand mission, Future Made Better. We contribute to the community through environmental initiatives, and you can see these elements in our stores. We use our Kiehl’s customer representatives (KCRs) to provide the best service and skincare knowledge for our brand. All elements displayed in the store represent a story within the brand.
The brand started in 1851 with a pharmaceutical background, and try-before-you-buy is something that we introduced 100 years ago. This principle of personalised customer service, together with generous sampling, has remained a Kiehl’s tradition. Future Made Better embodies our commitment to our environment and doing the best thing we can do to offer it protection and do good things for the whole community. KCRs are our brand ambassadors — because service is key, and we always put our customer as our number one priority. Kiehl’s isn’t a traditional brand; it relies on organic brand love and equity. We’re always on our customer’s side: we would rather make a friend than push a sale. And we’re currently in the top skincare brand ranking for this reason.
IR: How has Kiehl’s evolved in the past year?
KL: Last year was extremely difficult for everyone, but the brand had double digit growth, it jumped in ranking and it gained market share. It’s a big thank you to the entrepreneurship, agility and resilience of the whole Kiehl’s Australia team. As we can see, everyone in the Australian beauty market is experiencing online acceleration. Because we were prepared for online in 2019, it gave us a good starting point last year when Covid hit. At the end of the year, we had an amazing result. It was a great team effort and we had been doing a lot of things to accelerate online.
The Kiehl’s e-boutique is our number one brand growth contributor. Around early March last year, we implemented live-chat on our e-boutique and we were the first in the L’Oréal group to conduct live-streams on social media. We also sent customers complimentary samples with caring messages and we utilised our social platform to talk to them and offer more samples. On top of that, we introduced different levels of virtual product bundles. Normally, we have Mother’s Day and Father’s Day sets, but we didn’t have the capacity to do that work during lockdown. So online, we did virtual bundles and customers could pick and customise their own products. It was a new angle for us to put together a bundle that added value to the customer, but had fewer internal processes.
We introduced Kiehl’s Rewards program last year in September to engage with our customers online and offline with an omnichannel approach. As part of our Kiehl’s Rewards program, members can receive exclusive offers as well as early access to seasonal promotions and new launches. Membership is free and members earn points every time they shop online or in our stores. It is accessible and very easy to take part, and members can redeem their points every time they shop with us.
It was some of the fastest growth we had in the previous three years. During the pandemic, we grew immensely from the demand of skincare products in lockdown. Consumers spent more time taking care of themselves and invested in their skincare routines.
IR: How would you describe the current skincare and beauty landscape?
KL: I worked at L’Oréal China for 15 years before I came to Australia. I still remember the first day I landed and I thought to myself, ‘This is not a place for me to play with skincare!’ Everyone was talking about fragrance and makeup. At that time, nobody was into skincare routines, but in the past two or three years, it’s been booming. Last year, skincare accelerated in every distribution channel and customers are becoming more sophisticated and mixing and matching products and brands.
We observed so many new indie brands coming into the market, which is fascinating. I really enjoy the acceleration and the market is so dynamic right now. It’s healthy competition, which can provide a lot of opportunities and it adds to our market to provide the best expertise and knowledge. It’s very exciting.
Education is also key. I’m so happy to see brands are working on education. With skincare, you need to emphasise the ingredients, formulas and the routine. There is so much information to share. We’re very good at that at Kiehl’s — not only do we want you to experience our products, we also want to provide you with the best knowledge of our brand, what’s suitable for your skin and the best samples to try before you make a decision.
IR: What are some of Kiehl’s plans for 2021?
KL: It’s very exciting for us. We’re going to celebrate our 170th year at Kiehl’s. In April and May, we’ll be celebrating our brand globally and locally. We also have a campaign called Let Us Change Your Skin. Every year in Australia and in some select global markets, we use our KCRs [in marketing campaigns] in our banners online and offline. It’s very exciting, they’re our spokespeople, we have a lot of KCR engagement and we get a lot of love from them.
It used to be just our offline KCRs, but now we’ll invite our e-KCRs to be part of the campaign and include them in our omnichannel approach.
We’re also going to introduce our secret weapon: our first retinol. We’ll be entering the anti-ageing territory. It’s a popular ingredient and very trendy in the skincare market right now. We don’t talk about anti-ageing much yet, but we’ll be offering more education and the best formulas. Other brands have a percentage [of retinol], and we’ve had some customer inquiries regarding sensitive skin, which is a major concern for some when introducing retinol to their routine. As for all of our skincare, we approach our development with nature-inspired, scientifically proven formulas, so our retinol is very safe and easy to use on any skin type.
Kiehl’s isn’t always chasing skincare trends or trying to be the first to the market because our overseas teams take a lot of time to make sure our formulas and ingredients are the best, before we introduce them to the market. We make sure they’re safe for all skin types and the best we can give to the customer.
IR: Community initiatives are a big focus at Kiehl’s. Can you tell me about that?
KL: As part of our Future Made Better program, we have a pillar called Kiehl’s Gives. We animated this locally each year and partnered with environmental communities and artists to bring this initiative to life.
This year in 2021, we’re donating $2 per product of our #1 hero moisturiser, Ultra Facial Cream, to conservation organisation Bush Heritage. Sydney illustrator Dave Homer did a fantastic job [showcasing the Australian landscape] in his design for the limited edition label sitting proudly on this Limited Edition Ultra Facial Cream.
Every year, Kiehl’s celebrates Pride, embracing all of the diversity, artistry and vibrancy of the LGBTQ+ community. In 2021, we’re inviting everyone to join in and get your Pride on. In the US, a year ago before Covid, our team celebrated our 10th-anniversary for LifeRide, in partnership with amfAR, when each year our celebrity riders take to the streets and raise funds for amfAR’s work to benefit HIV/AIDS research. It’s part of our brand spirit internally and externally. It tells our community about who we are and who we want to support.
IR What are your plans for your physical stores this year?
KL: The in-store experience is important. We’re talking a lot about online acceleration, but we’re adopting an omnichannel approach. Every single customer is valuable, regardless of whether they shop on or offline. Currently we’re distributed in our Kiehl’s Boutiques, online at Kiehls.com.au, Myer, David Jones, Mecca and Adore Beauty, We have diversified channels to offer our experience to customers. We want to make sure we’re providing a meaningful and purposeful destination for customers to shop in-store.
We emphasise our customer journey with the best service from KCRs, and we’ve introduced the Healthy Skin Assessment tool, an advanced skin tool which can provide in-depth skin diagnoses to in-store customers. In daily life, skincare expertise through our conversation is our everyday life. Our KCRs have elevated their skin expertise and knowledge to offer daily consultations to our patrons.