Jing ZI - A new venture for Avon
In March we worked with Avon to assist them in identifying ways to address their dwindling Chinese sales, which had fallen from $338m in 2008 to just $30m today.
In just 5 days, we undertook market research, customer insight, value proposition, business model, customer experience design, key technology partners and competitor intelligence activity, which generated a new business venture concept we called 'Jing Zi' - 'mirror' in Mandarin.
Our approach highlighted customer frictions and pain points, which in turn highlighted areas of opportunity. In the most part, this came down to skincare concerns including pollution and the customer recognition that their skin was unique.
What is JingZi?
Jing Zi is a membership model that enables customers to:
Get personalised skincare recommendations based on their location
Receive a ‘Jing Zi Go’ device to measure their skin health
Get exclusive access to our Jing Zi Lounges and consultations
Get skincare products tailored to your specific needs
Think of it as a mixture of MyFitnessPal, Nespresso and Birchbox for Skincare
We had generated an innovative concept built on insight, but very much assumptions we had made on the information we had.
Validating the Jing Zi concept
A critical part of the iO process is to test and validate assumptions. Going into validation, we thought we knew what the answer was, but we needed to test it with real people and answer the questions;
Do customers in China want our product to relieve pains and create gains for them?
Which version of our product do customers want?
How much are customers willing to pay for the product?
How much does it cost us to acquire customers?
What should the first version of the product be for the Chinese market?
Our objective is to do this as quickly and as cheaply as possible. We want to avoid investing in creating and building real things, and instead, focus on creating prototypes that are 'good enough' to test. An approach is covered in more detail in books like The Lean Startup.
In the world of innovation, failure is a valid and important outcome. But we must fail fast, with minimal investment and ensure we fail in the right way, ensuring our testing is robust and we are learning as we go. Why Failure is So Important for a Successful Innovation Strategy.
To do this we mocked up a Jing Zi brand and landing pages which we ran across a two-part test plan, using surveys, jobs to be done interviews and web analytics to assess and answer each of the key questions with real people in China.
What we learned
The Jing Zi proposition tested very well.
People in China do want Jing Zi. Skincare is important to them and they feel their skin is unique so their skincare should be too. They are worried about environmental factors, but we also discovered a high level of concern around mental health as a factor in their skin health.
People want the full package. An in-store experience was very important and this related to confidence in the quality and authenticity of the product and service. People in China do not trust online-only cosmetic businesses.
57% of people are willing to pay the equivalent of over £117/month for a Jing Zi subscription. With 20% of these willing to pay over £234/month. If we were to launch Jing Zi in Shanghai, based on our test results we estimate revenue of;
@ 5.5% conversion rate: Annual £17.5m / 146.5m CYN.
@ 2.5% conversion rate: Annual £8m / 67m CYN
Digital acquisition of customers worked out at £25.69 per conversion which we measured as intent to buy (those that started the purchase journey).
The MVP of Jing Zi would need to include the app, device and personalised skincare product delivery. With initial features to include a basic skin profile, a decision-making algorithm and a basic selection of product types. The requirement for a physical store could be addressed by having a pop-up store, in a prime recognisable location.
We are now working with Avon on a proposal to take the Jing Zi concept forward, to continue to test and learn as we move towards launching the proposition in China, with Avon keen to launch Jing Zi at CES 2020.