FRANCE. No one works in travel retail for a quiet life, especially within the beauty sector. Crises come and crises go – and they usually take the faint-hearted with them. Those who stick around are made of pretty stern stuff.
One man who’s been there, done that and probably designed the T-shirt is Jean-Michel Bostroem, international marketing director travel retail worldwide for L’Oréal Produits de Luxe International. A veteran of the L’Oréal group, he has over twenty years’ experience at the company – fifteen of which have been in travel retail – and he is not a man who is easily fazed.
Neither, of course, is L’Oréal. In recent years the group has squared up to everything from the disappointment of intra-EU abolition to the tragedy of September 11. And with the war in Iraq now over and the SARS epidemic finally “contained”, the group is gearing up for a whole host of new product and retail innovations in the second half of 2003.
First up is fragrances, as the company prepares to unveil new launches from Lancôme, Giorgio Armani, Cacharel and Ralph Lauren. “It is certainly a big fragrance year for the group,” acknowledges Bostroem.
As previously revealed by The Moodie Report (2 July 2003), Attraction is the name of the new women’s scent from L’Oréal’s flagship Lancôme brand. It will make its debut in Europe this September, before rolling out to Asia and the US early next year.
“It will be a new classical fragrance for us,” declares Bostroem. “Our objective, put simply, is to have more perfumes in our stable.” The recent success of Miracle has certainly opened up new opportunities within this sector – and whetted the group’s appetite for more successful scents. But according to Bostroem, the real turning point within fragrance for Lancôme took place much earlier, with the launch of Trésor.
“That is when it really started to happen for us,” he observes. “But I think we lost a little of that momentum with Poême. That’s not to say it didn’t do well in comparison with many of our competitors. But it didn’t hit the level that L’Oréal likes – we have very high standards and want top performers every time. We believe Attraction will be one. It is a major event for us and will be our major focus down at Cannes.”
ON THE RECORD: “OUR OBJECTIVE, PUT SIMPLY, IS TO HAVE MORE PERFUMES IN OUR STABLE.” – JEAN-MICHEL BOSTROEM
The global roll-out of Attraction will be fast and the travel retail channel will play an important role. “The Attraction launch will be simultaneous, or will even enter [tax free] before the corresponding domestic introduction,” confirms Bostroem.
“Travel retail is understood more and more as a means to accelerate things; and we are taking advantage of more and more exclusive opportunities.”
Connexion (pictured) is a good illustration of that. Earlier this year Lancôme launched its first travel retail exclusive scent, following in the footsteps of Christian Dior, Givenchy and Guerlain. Bostroem says he is pleased with the results but it won’t necessarily be the start of a new series.
“Connexion has done tremendously well,” he confirms. “It was a European exclusive too and on average we’ve done 38% of Miracle with it, which is excellent. But it’s difficult to say what will happen next.
“We are approaching things cautiously, because we don’t want to build on something that will disappear very quickly. We do not like to build on sand. In terms of timing the opportunity was right for Connexion, because we were waiting for our next big international launch. We prefer creating these, with their long-term prospects, to doing one-shot launches every year.”
He continues: “However, we might from time to time build on [Connexion]. There might be another one-off from Lancôme in the pipeline. We might even alternate. If having something temporary helps while we wait for something else, then fine – provided it gives us visibility and momentum. It is a good way of building product image too. But going forward we will tread carefully. We do not want to waste either our money or operators’ time.”
ON THE RECORD: “TRAVEL RETAIL IS UNDERSTOOD MORE AND MORE AS A MEANS TO ACCELERATE THINGS.” – JEAN-MICHEL BOSTROEM
Meanwhile, Cacharel is poised to unveil its latest women’s line, Amor Amor, this Autumn. And while the name might conjure up images of the company’s perennial floral favourite Anaïs Anaïs, Amor Amor is something of a departure from the purity of Cacharel’s stalwart scents.
“The [double] name is certainly reminiscent of Anaïs Anaïs – we wanted a contemporary echo to it,” comments Bostroem. “But Amor Amor is very different, very daring. The packaging – which has a rose theme – is striking and great for merchandising. The commercial explains perfectly the concept of the product. Basically, there is a women in a night club, holding Amor Amor. She throws the bottle at the man she likes, and when it reaches him, it turns into a shower of petals, from the rose. It is a sort of magic spell that is all about seduction.”
Giorgio Armani is also turning up the heat as it prepares to unveil the third chapter in the Emporio masterbrand story in Europe this Autumn. “First there was Emporio Classic, for day,” explains Bostroem. “Then there was Emporio White, which was ideal for summer. Now we have Emporio Night, which is for clubbing. It is a much more sensual, sexy offering.” Correspondingly, the packaging for the women’s version is a bright shiny red; the men’s fragrance a complementary bright shiny black.
Lastly, in the US the group is poised to build on the success of its Polo Blue men’s fragrance with the introduction of a women’s line, Ralph Lauren Blue. Bostroem reveals: “This will be launched in the US at the end of the year, before rolling out to Europe and Asia in 2004.
“We were a bit surprised by the success of Polo Blue,” admits Bostroem, adding candidly: “Sometimes American marketing seems a little simple to us. We asked ourselves, “˜What’s new? It’s still Polo, but this time it’s blue.’ We were wrong. The mood is there, the juice is so good, and the whole mix is coherent and very easy to understand. It is exactly what people want in difficult times. It has been a real breath of fresh air.”
Make-up matters
But L’Oréal hasn’t been focusing on fragrance at the expense of cosmetics; there’s been plenty of activity on that axis too. Most notably the group introduced a make-collection for Biotherm at the end of last year, and has since been slowly but surely increasing the distribution.
“We started carefully, with a few points of sales in each country,” comments Bostroem. “Now we are moving up the gears. We are in about 200 doors domestically, and in European travel retail we’ll have about 25 by the end of this year. We are already in most of the major locations, such as Madrid, Copenhagen, Frankfurt, Stockholm, Brussels, Barcelona and Lisbon. This year alone we have opened Amsterdam, Oslo, Vienna and Munich. And we will be present in Paris Charles de Gaulle (CDG) 2E when the new specialist beauty concepts open there later this month.”
Singapore is next on the list. “We want to have a Biotherm store [in Changi],” reveals Bostroem. “And so we will be closing Armani Cosmetics and installing Biotherm there instead. Armani is a bit more difficult on turnover because it only has colour, whereas Biotherm has skincare too. But overall, Armani has a different strategy. It is deliberately very exclusive. We are only in about 50 points of sale worldwide, with four or five in travel retail.”
L’Oréal is no doubt disappointed that the Armani-Changi experiment did not work out. After all, when it opened in late 2001 it was the brand’s first cosmetics boutique in Asia, and only its second airport door – the first being at London Heathrow airport terminal three. But even at the opening the company admitted that it was a “strategic” decision to showcase the line there – code-speak for “˜calculated experiment’. All credit to the group for its fast recognition of a rare failure – the concept has been a success everywhere else – and for its readiness to replace it with a brand that is enjoying a real purple patch in both the channel and the region. Indeed, the switch makes particularly good sense given the group’s desire to boost Biotherm’s visibility in Asia – its aim is to open 25 doors there as soon as possible.
But it is not just Biotherm that is evolving into a runaway success story. Next month Shu Uemura will make its debut in European travel retail, when the Purple Lounge – operated by Sociéte Distribution Aéroportuaire (the new joint venture between Aelia and Aéroports de Paris) – opens its doors at Paris CDG 2E. The new concept, designed as a complement to the main perfumery, will feature a selection of in-demand fashion brands promoted by instore make-up artists. Armani Cosmetics will also be represented there, underlining L’Oréal’s continued belief in the brand’s potential, despite the blip at Changi.
“This is quite a big development for the Shu Uemura brand,” acknowledges Bostroem. “We do have something planned for London, but at the moment CDG will be its only European airport door.”
And there are more developments afoot in Asia, most notably in Hong Kong. “We already have a Shu Uemura counter at Hong Kong International [opened in the east wing last January],” explains Bostroem. “But because of the current airport-wide refurbishment, the shop is moving. Everything is changing. So Shu Uemura will have a new location in the main shops. That is due to happen in August.”
Meanwhile, Taiwan continues to be one of the hottest regional markets for the brand. And its debut listing in Japanese duty free – at Osaka Kansai International airport in conjunction with operator Asahi Airport Service – has generated good first-year results.
Japan is also the launch focus for a new Lancôme lipstick line, called Juicy Rouge. “We have had tremendous success with our Juicy Tubes [lip gloss] line,” says Bostroem. “We’ve sold more than half a million units in travel retail. Riding on the crest of that wave, we’ve created a new lipstick line that combines colour and gloss, presented in a sleek, holographic silver case. Because it’s bright and shiny, it’s very eye-catching, and it’s attracting younger consumers to the brand.”
Male consumers need not feel left out either. This month Lancôme entered the men’s skincare sector, with the introduction of Lancôme Homme. The line has been pre-launched exclusively in the travel retail channel.
“We have considered the men’s market to be interesting for some time now, but until recently there were not enough players,” Bostroem explains. “Biotherm was a trail-blazer of course, followed closely by Clinique. The market has grown step-by-step: it took a long time for Biotherm to reach its first million units – now we are talking more than six million, so it’s big business. Then Clarins came along [last year] and showed there was plenty of room in the market. Now Lancôme is present too, and travel retail is the ideal channel for such a range. Overall 70% of travellers are male and they tend not to shop much in domestic perfumeries.”
ON THE RECORD: “WE WILL KEEP OUR EYES OPEN FOR OTHER [STAND-ALONE] COMMERCIAL OPPORTUNITIES, BUT EVERYTHING DEPENDS ON THE SPACE AVAILABLE – AND THE TERMS OF THE DEAL.
“WE DO THIS SORT OF THING MORE FOR IMAGE THAN FOR PROFIT, BUT WE CERTAINLY DON’T WANT TO BE LOSING MONEY.” – JEAN-MICHEL BOSTROEM
On the retail front, L’Oréal’s strategy encompasses both consolidation and expansion. “We are playing all the cards at the same time,” observes Bostroem. “For example, when the opportunity came up recently in Heathrow T3 for a stand-alone Lancôme shop, we took it. That takes our total to about ten. And we will keep our eyes open for other, similar commercial opportunities, but everything depends on the space available – and the terms of the deal. We do this sort of thing more for image than for profit, but we certainly don’t want to be losing money.”
And barring any other negative force majeure, Bostroem expects business to be more or less back to normal come the Autumn. “Things have started to pick up in South America, and as of the end of last month, the US is the area where we are the least badly affected,” he comments. “Of course Asia has been tough this year – everyone has been suffering. But whereas the market was -33% down in May, it was only -20% down in June, so the bounce-back has already begun. And we are expecting positive growth by September. By December I hope we are back to normal everywhere.”
Normal is a somewhat relative term in travel retail these days, but Bostroem – and L’Oréal – have had plenty of practice at riding out the peaks and troughs. “I am very used to ups and downs,” shrugs Bostroem.
“The main worries for us now are financial issues. The value of the dollar is too low and obviously that affects our bottom line – and distorts our results. But there is absolutely no point worrying about that as it is out of our control.” He concludes with a laugh: “Not even L’Oréal can control what the dollar does – yet.”
