BEAUTY'&'GO'FEED$YOUR$SKIN$

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TO:$BOARD$OF$DIRECTORS$

FROM:$NANYANG$CONSULTANCY$

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Agenda'

1.  Problem$Statement$$2.  Customer$analysis$3.  RecommendaIon$$4.  Market$analysis$5.  ImplementaIon$6.  KPI$7.  Financial$analysis$8.  Risk$$9.  Conclusion$

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Problem'Statement'

!  What$should$Beauty$and$Go$focus$on$in$the$future?$$

•  Present$in$Spain$and$some$ciIes$of$Europe$$

•  Online$channels$sIll$a$small$part$of$sales;$mass$merchandise$provides$low$margins$

•  What$markets$should$B&G$prioriIes?$$

•  What$distribuIon$channels$should$it$focus$on$?$$

•  What$product,$pricing$and$markeIng$strategies$should$it$focus$on?$$

Current$SituaIon$ Challenges$

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Recommendation'

Market$Priority$

DistribuIon$Channel$

MarkeIng$and$pricing$strategies$

•  Europe:(Leverage$on$exisIng$supply$chain$and$product$strength$$

•  America:(UIlize$Natura$Bisse$presence$in$the$US$market$

•  Segment$product$for$each$channel;$emphasis$on$health$and$beauty$retailers$

•  Use$online$format$for$subscripIon$sales$

•  ExperienIal$good;$campaign$based$approach$•  Premium$pricing$linked$cosmeIc$pricing$$

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Market'Analysis'

Europe$$ America$ Asia$ Others*$

Regulatory$requirement$

Economic$

Brand$equity$

Customer$awareness$of$natural$products$

Supply$chain$network$

Priority( High( High( Medium(low( Low(

High$

Medium$

Low$

*$Others$include$ROW$

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Who'is'our'customer?''

Women$

•  Women$in$the$age$of$20b60$years$$

•  High$purchasing$power$•  Urban$sensiIve$to$

appearance$$•  Awareness$of$natural$

based$products$

•  Metrosexual$man$in$the$age$group$of$20b40$

•  High$purchasing$power$•  SensiIve$to$appearance$•  Awareness$of$natural$

product$$

Men$

Customer$base$

!  Expand$the$definiIon$of$beauty$to$be$gender$neutral$$

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Implementation'1:'The'European'Market'

Product$Mix$

MarkeIng$Strategy$$

b  Overarching$objecIve:$Maximizing$profitability$b  Next(steps:(Decision$to$preblaunch$premium$lines$$

b  Leverage$on$Amsterdam$flagship$store$(ExperienIal$good)$

b  Next(steps:(Beauty$from$within$campaign$b  Social$media$driven$approach$$

!  Increment$of$product$mix$to$maximize$profit$opportuniIes$

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Implementation'1:'The'European'Market'

Rollout(Plan:(Holland((((((((((((((((((((((((((((((Portugal(((((((((((((((((((((((((((((((((((France((((((((((((((((((((((((((((((((((((((((((((((Italy(

TradiIonal$ Upgraded$

Spa,$Gym$&$Hotels$

Shots$

Mass$Market$Retailers$

Beauty$Retail$

Premium$food$/$Cashier$Premium$food$

Online$(Bundled$subscripIon)$

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Implementation'1:'The'United'States'Market'

Rollout(Plan:(New(York((((((((((((((((((((((((((((((Los(Angeles(((((((((((((((((((((((((((((((San(Francisco((((((((((((((Chicago(((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((

TradiIonal$ Upgraded$

Mass$Market$Retailers$

Shots$

Department$Stores$(Macys,$Nordstrom)$$

Premium$Food$

Online$(Bundled$subscripIon)$

Mass$Market$Retailers$

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Implementation'2:'The'United'States'Market'

Product$Mix$

MarkeIng$Strategy$$

b  Overarching$objecIve:$Create$market$presence$b  UIlize$the$success$of$JV$partner$Natura$Bisse$$b  Next(steps:(Partner$with$top$probbeauty$mediums$$$$$$Food$Network,$Oprah$Show,$Marathons,$Fashion$$$$$

$Shows$

b  Next(steps:(Beauty$from$within$campaign$b  Social$media$driven$approach$b  Customer$segmentaIon$b  Ex:$Nantucket,$etc.$$

!  Increment$of$product$mix$to$maximize$profit$opportuniIes$

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Implementation'3:'Asia'

Hong$Kong$and$Vietnam$

•  Next(steps:(Direct$Asian$importers$to$focus$on$high$margin$products$

•  Shots$sold$in$luxury$dept$stores$

•  Incremental$revenue$opportuniIes$$

•  Seek$out$partners$in$beauty$percepIon$market$

Shanghai$and$Malaysiab$Cluster$beauty$markets$

Focus$on$luxury$supermarkets,$premium$airlines$retail$stores$(Singapore$Airlines$Kris$store)$$

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KPI'

Europe$

US$

Asia$

•  Sales$figure$•  Number$of$stores/brand$

•  Market$volumes$in$mass$market$,$departmental$stores$and$premium$food$

•  Online$sales$volume$•  Geographical$sales$numbers$

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Risks'

Type Detail Likelihood Impact Mitigation

Scale What)if)online)sales)are)too)low Medium Medium Offer)packaged)deals)&)DiscountsPR)&)Communication

US)Positioning What)if)perceived)too)expensive Low Medium Refocus)on)high)volume)channelto)decrease)price

Brand)Image What)if)going)online)reduces)Brand)Image Low Low Endorsement)at)Haute)Couture

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Financials''

MAIN$ASUMPTIONS$AND$TAKEAWAYS$

•  IRR$27%$•  Breakeven$4$years$

•  Sales$x3$in$5$years$•  Improvement$of$profitability$due$to$

channel$mix$•  Holland$launch:$PR$campaign$500K$EUR$

+$PromoIon$effort$100K$EUR$$$

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Financials''

K"EUR 2016 2017 2018 2019 2020Sales 500 600 1000 1200 1500Gross.margin 250 350 580 700 900Holland.launch 600Online.strategy 800 400 100 100Annual-Net-Income 5350 5450 180 600 800Cumulative 5350 5800 5620 520 780

50%$ 60%$

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Conclusion'

Market$Priority$

DistribuIon$Channel$

MarkeIng$and$pricing$strategies$

•  Europe:(Leverage$on$exisIng$supply$chain$and$product$strength$$

•  America:(UIlize$Natura$Bisse$presence$in$the$US$market$

•  Segment$product$for$each$channel;$emphasis$on$health$and$beauty$retailers$

•  Use$online$format$for$subscripIon$sales$

•  ExperienIal$good;$campaign$based$approach$•  Premium$pricing$linked$cosmeIc$pricing$$

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Gracias'

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