CRAFTING

Today’s Conversation:

1) Situation Assessment

2) Key Learnings

3) Bold Actions

Additional Deliverables

Complete COVID learnings whitepaper

1) Detailed action plan

2) Execution Playbook

Agenda

Introduction

Chapter 1: Consumer

Chapter 2: Supply Chain

Chapter 3: Organization

Wrap Up / Q&A

feb 2020: COVID 19

DISRUPTS THE GLOBE

new norms

new opportunities

new thinking

major cities globally enforce mandatory

QUARANTINE

consumers

PANIC

driving widespread category outages on essential items

our customers face new challenges, primary focus to fill

EMPTY SHELVES

markets negatively impacted beginning a

GLOBAL RECESSION

resulting in widespread

STRESS

widespread STRESS

… society & individuals
… authorities & organizations
… markets & consumers
… systems & processes

however,

SOLIDARITY

begins to transcend the pandemic

new

HEROES

are formed

We found unexpected

SILVER LINING

in positive environmental impact

… resulting in new found energy for sustainability

new

HABITS

have been formed.

new ways of…

… working

… shopping

… consuming

… communicating

… thinking

… living

… greeting

companies and individuals adapt with overwhelming

RESILIENCE

we will take the opportunities and challenges that COVID has presented, and

CRAFT

a bolder, stronger, and more resilient organization for tomorrow.

Consumer & Society

• Shift in Societal psychology: More isolation bringing fear but also need for belonging & low-touch solutions
• Back to the roots: Return to trusted brands
• Living virtually: work online, shop online, connect online, entertain online
• Moving from salon to fun@home and experimenting with DIY solutions
• Increase demand for ‘conscious beauty’: “sweet spot” of combing purpose, health and sustainability

Channels and Consumption

• E-commerce boom as consumers shop online and on social media platforms
• Discounter channel, Clubs to gain importance for commoditized goods
• Dual service approach (online + offline) continue to expand for professional
• Bankruptcy of smaller hairdressers & distributors

“Self-care at home, community and green responsibility are the new key-words.”

TAKSAGO
‘The New Normal’ Research’

WHY?

This year has been full of changes, happening both in the world around me and in my own life, changes that made me focus on what defines me.

This year’s new reality empowered me to experiment, try new things and unleash my creativity, right in my own home.

I learned that I could unlock my full potential and craft my own definition of beauty, no matter the circumstances.

Brand philosophy

Caring
Resilient
Authentic
Fearless
Together

A new brand:

CRAFT is an invitation.
An invitation to craft a new paradigm for beauty, together. 

At CRAFT, hair is our passion.
We know hair, we love hair, we care for hair. 

CRAFT is resilience, strength and confidence coming from great hair and we give you all the expert tools to unleash your own potentials.  

CRAFT beauty is authentic, like you. The beauty we want to craft is inclusive and respectful of our differences. It’s in these differences that we find strength.

At CRAFT we are fearless in our pursuit to create products made with respect for this planet we call home. We foster a type of beauty that is clean, transparent and ethical. 

CRAFT means coming together, because we might look different on the outside, but we are all humans of the same planet.

Are you ready to craft a new beauty, together?

Product philosophy

Circular
Raw
Aesthetic
Fair
Transparent

The CRAFT Product Philosophy

We believe high-quality beauty should not come at the expense of the planet, that’s why we have created a new line of products that leave no trace behind. 

Zero waste is our approach to a new type of beauty. 

Our products are created to leave nothing behind no plastic, no waste, no single-use. 

Together with our partners and suppliers we care about the full cycle of the product, from sourcing sustainable ingredients to offsetting our production carbon footprint through sustainable initiatives, so to ensure a 100% circular approach. 

CRAFT Product Mock-Ups

Shampoo Tablets

1. Re-usable aluminum shampoo bottles for tablets

2. Shampoo tablet refill pack

3. Shampoo tablets to dilute in water at home

CRAFT Product Mock-Ups

Powder Hair Colour

1. Powder hair-colour

2. Powder hair-colour kit

CRAFT Product Mock-Ups

Shampoo Bars

1. Shampoo bars

2. Interactive QR code

3. Shampoo set

Business philosophy

Community
Revenue Stream
Agile
Fit for future
Transformation

Business Model & Revenue Streams

D2C Direct selling Model

• scalability at lower cost base
• Agile due to owned data
• D2C Online sales & marketing platform
• Communication channels Digital, SoMe and WOM

Direct Seller / Re-seller

• Hair loving self-employed sales(wo)men
• Empowering and contemporary employment model e.g. location/time independent, supporting higher purpose

Market offer

• Revenue stream from both products & services
• Premium quality and price
• HBC Hair Powerhouse & SC as business backbone

The Community Brand

CRAFT Prosumer

• Hair lovers / Self-stylists and craftsmen
• Empowered self-serving sales(wo)men
• education, inspiration, consultancy, techn. knowledge, skills courses,…)

CRAFT Consumer

• We invite everyone who shares our values & wants to CRAFT their own beauty

CRAFT Community

• Accessible to all who want to be part of the community
• Virtual & real live community

Supply Chain

TRADITIONAL APPROACH

• Cost focused
• Historical forecast view
• Lean production & low inventory
• Consolidation of productions
• Smaller pool of suppliers

The traditional approach aims for “just in time”, forgetting “just in case” scenarios

COVID19 has exposed

WEAKNESSES

• Resilience to shocks
• Long time to recover
• Under-invested in data and analytics
• Limited diversification
• No clear contingency plans

Supply Chain will require a true change to a more real-time, data-driven, and predictive model

if the TTR for a given facility is greater than the TTS, the supply chain will NOT BE ABLE TO MATCH SUPLY WITH DEMAND, unless a backup plan exists.

Adopt

STRESS TESTING

As part of everyday business

Time to Recover (TTR)

vs

Time to Survive (TTS)

Manufacturing

Transportation

Organization

End to End

STRESS TEST

Evaluating all aspects of supply chain.

Uncover weaknesses.

Build solutions to decrease reaction time.

MATERIALS

Leverage synergies to better withstand demand shocks

*
Product Pooling
Upstream synergies

*
Never out product group
Global contingencies against these products

Bold Action:

Identify immediate opportunities to build regional / global synergies on key product groups, through aligned upstream materials & formats.

Opportunity for built in

MANUFACTURING FLEXIBILITY

• Buy vs. Make strategy alignment
• Stronger / more strategic 3PM relationships
• Regional manufacturing hubs
• Higher diversification
• Clear contingency plans

Bold Action:

Transition purchasing organization into supply chain to better align and integrate on strategic 3PM coverage solutions

CRAFTING A MORE RESILIENT SUPPLY CHAIN

Will take dedication, openness, & commitment to change

Addressing all aspects of the “traditional” supply chain approach

ORGANIZATION & CULTURE

RELEVANT TOPICS TO ADDRESS

1. Crisis management
2. Communication
3. Solidarity
4. Work environment

〉 CULTURE

CRISIS MANAGEMENT

teams navigate through challenges

LOCALLY

Keep employees engaged through

HIGH FREQUENCY COMMUNICATION

WE CARE.

WE ACT.

It is not about

WHERE

we work, but

HOW

we work.

CULTURE CHANGE

towards being

PROUD

working for &

TRUSTING

Henkel

CRAFTING Change

for a crisis-proof organization & culture

1. Optimize Crisis Management Teams
2. Challenge Corp Comm set up re internal support structure possibilities
3. Ensure solidarity / corporate citizenship is maintaining momentum
4. Adapt work environment to support WFH, personal contact, collaboration

• Continue fostering culture of trust and being proud working for Henkel

For each bucket both immediate (2nd wave) & longer-term actions

NEW NORMAL – WFH? EVALUATE PARTIAL

REMOTE WORK

WFH (1-2 days per week) considerations for ‘new normal’

1. Increase employer attractivity
2. Decrease office costs
3. Ensure crisis readiness

Structured analysis of potential WFH scenarios in every region

1. Legal assessment
2. IT security
3. Financial questions

(RE-)DISCOVERED CULTURE

Collaborative
Resilient
Agile
Fulfilled
Transparent

Keep positive momentum & foster the ‘Henkelaner’ idea

Crafting our Culture

CRAFT Employer Branding

• Highlight changes & positives out of crisis
• Be honest, authentic, and addressing current challenges

CRAFT Employee Engagement

• All employees are asked to share our values & to contribute driving our culture
• Corporate Citizenship as important vehicle for engagement

CRAFT Henkel Community

• Make accessible to all who want to be part of the community, e.g. family
• Virtual & real live community

CRAFTING

a stronger, bolder, more resilient future

We launch purpose-driven, consumer-focused innovation

We conduct end to end stress testing to better prepare for future

We develop targeted inventory & supply strategies

We become crisis ready

We have full trust in our teams