Orbis unveils branding strategy success after restructuring and product renewal
Skincare manufacturer Orbis took the spotlight at cosmetics development expo COSME Tech, held in January at Makuhari Messe, Chiba Prefecture. One revelation was how a successful marketing campaign emerged after the company applied consistency in both company structure and advertising content. We take a closer look at what that involved.
Giving the keynote address at COSME Tech was Masaki Okawa, Corporate Executive Officer and manager of ICT and new business development at Orbis Inc. In his presentation, he explained how Orbis was able to radically turn its overall branding strategy around by boldly changing the company structure and renewing its products.
Last year, the company reorganized its structure, dividing itself by function instead of business type. Before the restructuring, marketing and sales promotions had been run separately with different decision-making processes, depending on whether they were for the mail order or retail business. This, in turn, led to four problems: (1) Each business division prioritized its own interests; (2) Staff who were proficient in the latest digital technologies were disproportionately grouped in a particular division; (3) There was a focus on short-term sales, making it difficult to set other KPI; and (4) Being in a particular division for a long time tended to make people want to maintain the status quo, which left no room for new challenges.
As a result, consumers perceived the brand image to be uneven and varied. When asked what came to mind when they heard the word “Orbis”, some customers said “acne treatment products” while others mentioned “cleansing” or even “diet goods”. It was clear the brand wasn’t well-defined among customers.
To create consistency in its brand, Orbis divided its company structure into two categories, “marketing functions” and “executing functions”, which would overlook and deal with its different businesses. This would allow the company to plan marketing for both mail order and retail businesses.
Orbis also overhauled its marketing strategy. It decided to position a mid-range skincare product as its entry-level product to make the brand image more vivid and distinct.
A full renewal after four years
The product selected for that job was ORBIS U. Four years after launching in 2014, ORBIS U had a full revamp — from its formula to packaging — and returned anew in October 2018. This new version reinforces the product’s anti-aging abilities while maintaining Orbis’s policy of not using fragrances or coloring. The three-piece line-up embodies a simple three-step skincare routine: face wash foam, beauty lotion, and moisturizer.
With ORBIS U’s renewal, Okawa is confident “the LTV (lifetime value) of acquired customers has grown extremely high”. In 2014, around half of its skincare products were bought by new customers. However, after the release of the revamped ORBIS U, the number of acquired new customers shot up to over 80%. It could mean the mid-range ORBIS U was a gateway into the world of Orbis for more customers, lowering the barrier to continued usage of its products and resulting in a soaring LTV.
Orbis’s December 2018 financial results show that, of its US$455 million in sales (a 3.8% decline from the previous period), ORBIS U had a component ratio of 21% (6 points up from the previous period), earning US$95 million on its own. Yet, even though revenue decreased due to fewer customers as a consequence of the rebranding, operating profits grew by 2.9% — or US$83 million — as spending declined because of fewer price-based promotions. With ORBIS U as the driving force, the company expects to see revenues increasing in the next term.
Consistency wins in ad campaigns too
Orbis has also applied its strategy of consistency to advertising content. Previously, it was common for a product’s marketing materials to be split between traditional mass media channels and the web. However, Orbis now integrates its online and offline advertising campaigns.
As Okawa put it, problems arose when different in-house teams and contractors handled separate advertising mediums. There were proposals from large advertising agencies for mass media ads and from more specialized agencies for online ads, but this resulted in unrelated and disparate content, he explained.
However, by treating each medium neutrally, advertising content became clearer and more consistent, allowing Orbis to optimize the deployment of ads in the “purchase funnel” — the customer’s journey that starts from being aware of the product to become a potential customer, all the way to making a purchase.
Take the product DEFENCERA, which went on sale on 1 January. The product boasts the ability to “make the moisture in skin harder to escape the body” while also being a “foodstuff for a specified health use”, as designated by the Consumer Affairs Agency. In the ad campaign, DEFENCERA was dubbed the “next-generation of drinkable skincare”, and the same visuals were adopted in all advertising mediums, including traditional mass media, web ads and public transport.
The product has now gained widespread attention and initial sales have been so good that production can’t keep up. Some 80,000 units were sold a month after its release, resulting in roughly US$2.2 million in sales and surpassing the company’s expectations.
Orbis is currently taking DEFENCERA overseas. Last year, it combined forces with T-mall Global in a cooperative strategy that will see it further promote its products using the sales and big data abilities of T-mall Global’s platform. Orbis expects to rake in overseas profits of US$8.9 million for 2019, just from the sale of DEFENCERA.
Text: Denyse Yeo
Original (Japanese): Shidu Kumon
