There is an old movie titled Sleepless in Seattle that I fondly remember watching. Many movies have Seattle as their background and indeed the city is known as the location of the first Starbucks. The Seattle Public Library is also one of many attractions in Seattle. I recently had the chance to visit Amazon headquarters in Seattle. I was very impressed with the Amazon Spheres on the headquarters campus of Amazon in Seattle. The Amazon Spheres are three glass domes, four stories tall housing over 40,000 plants from 30 countries around the world. Here employees can relax, enjoy nature and spark new ideas. I used Amazon Go, the world's first checkout-free grocery store opened to the public. It automatically identifies the user by facial recognition, detects when products are taken from the shelf and charges for them. I put items into a pile and just to be sure, checked the receipt. Everything was there.

 Amazon is a retail giant having dozens of office buildings in downtown Seattle. The number of employees was about 30,000 in 2010, but that number now stands at over 560,000. It expects to have nearly one million in the next couple of years. It is taking the top position across multiple areas.

 In general, department store is what comes first to our mind when we think of fashion. Department store is simply a huge clothing shop. With clothing as the main item, it has cosmetics and grocery shops on the first floor to attract customers. Amazon is changing the rules of the game when it comes to the U.S. fashion industry. It's quite amazing how Amazon works in the view of traditional retail business. Amazon is now taking up another challenge and going into the beauty industry. It began as a small business selling books and records, but today it has sprawled into almost every industry. Amazon has brought us the digital big bang, to say the least.

 Now that this digital hurricane of Amazon is sweeping into the beauty industry, how should we deal with it? In my view, we should seek changes for ourselves and undertake a digital transformation in order to recreate ourselves as a digitally powered beauty company. The most successful company last year in the luxury business is definitely Gucci. Gucci is seeing a rapid growth with over 45% year-on-year increase (EUR 6.2 billion that's KRW 8.175 trillion). Its communication strategy targeting millennial customers has contributed significantly to its success. Gucci presented online-exclusive products and hosted a fashion show live online via social media for a special experience both online and offline. It also used influencers rather than famous actors to make its ads more appealing to customers. Last year, it undertook Gucci Places to introduce special locations that shared a special connection with the brand. Its app invited users to check in to these places using the push notification and earn the badge associated with each place alongside special collection of pieces. The locations may not seem to relate directly to the Gucci brand, yet it managed to weave an engaging brand story around each location. Its global digital project #GucciGram in which illustrators, photographers and many other visual artists were invited to reinterpret iconic Gucci patterns in their own vision and exhibit their work via Instagram, was very impactful. Gucci is a good example of successfully expanding its appeal to millennials. Through communication with customers and young employees, it exposed itself to customers, engaged with customers and converted more leads to sales.

 As mentioned earlier, most traditional department stores in the U.S. are struggling amid digital shifts. Macy's closed around 100 stores last year. It was the largest retailer of apparel in the U.S. over the last 30 years but Amazon has now overtaken it. But, there is a department store putting up a good fight—that's Nordstrom. It redefined the concept of service to keep up with the times. In the past, customers were attracted by product displays in the showroom. Nordstrom thought differently: with the insight that bridging online and offline is the key to strengthening the competitiveness in the market, it drew up a new service model creating synergy across online and offline. It seeks to lure male customers showing relatively lower conversion rate than female customers and continues to open a pop-in store that's an in-store pop-up offering products to better cater to millennials. If it proves successful, it would have an opening of a permanent shop. It also teams up with leading global brands such as Nike to make limited-edition collaboration as its own effort to attract and engage with customers.

 China knows what it's doing when it comes to digital technology. If I may say so, China is the country of WeChat. Over one billion Chinese people use WeChat, an average of four hours per day for communication and business as well. WeChat offers great business opportunities, but it's about how to make use of it. Our penetration rate in the segment of female Chinese customers that's the percentage of Chinese women purchasing our products is only 1% whereas that in the segment of female Korean customers is about 45%. This means, we can have a huge market if we can increase this penetration rate up to 5%. There are also about 30 countries besides China that we should soon step into. The Middle East and India are particularly worthy of our attention. India has one of the fastest growing e-commerce markets in the world. More and more women all around the world are starting to wear makeup and spend their hard-earned money to buy the things they want. In ASEAN countries, the market targeting young millennial customers is growing fast. Meanwhile, LANEIGE and innisfree products are selling well in the U.S. Millennials in the U.S. very much see K-beauty as the new beauty ideal. The development of digital technology is extending our markets far and wide. Let's take our chance in the Korean and the five largest markets—the Greater China Region, ASEAN, U.S., India and the Middle East—and make full use of the opportunity we have now.

 There will always be difficulties. But, it's all about how we overcome those difficulties. Being a top beauty company in the Korean market over the past 70 years sometimes makes ourselves grow complacent and fail to understand customers, which leads to a crisis. In order to overcome difficulties, we must go back to basics and push toward customer centricity as we tour shops to draw insights from customers—that's Butterfly Day about 20 years ago. Learn from customers. Doing good work is important, but customers are most important. Customers decide everything. Though we made success in the old traditional way of doing business, we must break away from it if customers no longer want it, or if there is a better way. Promotion and marketing are not good enough to convert online leads to offline sales. Enthralling innovative products is the only way. In this digital age, customer experience is rapidly increasing in importance. Even at Starbucks, customers use a mobile-ordering app. Using this app, they can quickly order and pick up their drinks. Moreover, its premium Reserve Roastery equipped with all different machines offers more customized drinks and services. Anything that proves successful here is adopted by other branches, so customers everywhere can have new experience. Adidas built a highly efficient, automated Speedfactory. It's like mass customization; producing highly customized shoes on a mass scale upon demand.

 Customer reaction is the key to customer experience. Our first job is to understand their needs, what they want and how they want to be treated. Customers check products offline and buy them online from home and sometimes they place an order online and pick up in store. It is truly the age of the omni-channel, fully integrating online and offline. And, there is an opportunity to offer various customer experiences. Korea's recent craft beer boom has continued. Craft beer started in 1970s in the U.K. and rapidly rose in popularity in the late 1970s after the deregulation reopened the U.S. beer market to craft brewers. Small craft brewers cater to customers by making experimental, unique beers. Through these craft breweries—also known as microbreweries—customers can enjoy experience of unique flavors. They pair their beers with foods and sometimes hold a concert in collaboration with restaurants, and invite customers to take part in the beer brewing process and enjoy a taste of what they make. Customer experience should never be an abstract concept. It brings together every small thing that customers are interested in, love to learn about and enjoy more. That's why it is important that we put our idea into action no matter how small it is in order to drive customer experience innovation. When we take an action, we may fail but still we can learn something from it. Don't be afraid of failure. Let's keep taking actions. Success comes from action, not ideas.

 Digital technology is all around us. Online and offline shopping are no longer two separate worlds. It's important that we hand out high-quality samples offline in the most effective way, but what's more important comes after sales. Everything is data. If a customer purchases an essence, we should be able to encourage him/her to try a high-quality toner from one of our brands. If a customer purchases a skincare product, we should be able to recommend a cleansing product that's right for him/her. Take advantage of all our brands. Customers today are not likely to shop from a single brand. Communicate and interact with customers through multi brands, multi channels and multi categories. Small data sets together make up big data. Incorporate the use of new ABCs of digital talent—AI, Big Data and Cloud—into the customer-centric approach. If we run smash into the digital hurricane, we will be blown away, but if we ride on it, we will have a great opportunity to go further and faster. I'd like you to work with digital experts, learn from them, create synergy together and by doing so, develop yourselves. We all grow through work. Take up a new challenge. Dip your toes into something new.

 We are now working on a new working hours system to change the whole working environment. Ask yourself questions and think hard to explore deep insights for personal growth and find your own happiness. I personally believe that happiness comes from growth. Everyone grows, changes and shapes life through the challenge. Immerse yourself deeply in the process of personal growth and development, and you will be able to accept your fate and love it; that's what Amor Fati is about. If you want to grow, you should take action first. Nothing happens without action. Though we fail, we can learn and grow from it. With our new HQ here in Yongsan, we are opening a new chapter in our history. Let's communicate with each other and evolve together into a truly innovative beauty leader through digital transformation. We create new beauty and that's Asian Beauty. Our journey toward creating new beauty will excite everyone around the world. The badge you are given with has the shape of Amore Hearts. Have fun taking up new challenges and watching yourself grow.