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“Travel retail plays many different roles for L’Oréal. In terms of growth, it’s one of the most dynamic [divisions]. It is also an important window, a showcase for our brands.“ |
Nicolas Hiéronimus, Managing Director, L’Oréal’s Luxury Products Division |
INTERNATIONALNicolas Hiéronimus assumed the position of Managing Director of L’Oréal’s Luxury Products Division a little less than a year ago, but has wasted no time in getting to grips with the opportunities and challenges that travel retail – a key channel within his realm – represents.
At this year’s TFWA World Exhibition in Cannes, together with colleague Managing Director Travel Retail Worldwide Eric Tarral, he told The Moodie Report how L’Oréal plans to continue its beauty dominance within the dynamic “global village” that serves as an unrivalled showcase for so many of its brands.
“Travel retail plays many different roles for L’Oréal,” notes Hiéronimus. “In terms of growth, it’s one of the most, if not the most, dynamic [divisions]. But it goes beyond that. It is an important window, a showcase for our brands. It is definitely the distribution channel where our brands are systematically in contact with the decision makers, the most affluent passengers, and the population which is spending more on beauty than the average population.”
Hiéronimus also acknowledges travel retail’s role in serving its biggest cosmetics consumers, wherever they might be. “We know that the Chinese are going to be a very important part of our business in the years to come,” he explains. “We also know that people from the Middle East love beauty; and we know that the Russians and Brazilians enjoy cosmetics too. The interesting thing is that these people do not necessarily buy in their home country. But thanks to travel retail, wherever they go around the world, they have an opportunity to be in contact with our brands and our products.”
He continues: “Travel retail is”¦ a global village. It’s a great asset, but one which also has lots of implications in terms of our ability to service it: for example, to have sales people who speak the right languages; and to have signage in the language of the most frequent travellers, and not just that of the host country.”
But where Hiéronimus sees the most potential, is within the framework of events and promotions. “I think where we can take things to another level is by doing better in terms of animations and entertainment,” he explains. “We need to think about how we can get more travellers to be excited about shopping in an airport, and about spending time getting acquainted with our brands.”
Hiéronimus highlighted certain initiatives that have already been successful, such as L’Oréal’s Men’s Corner and the Perfume Lounge. “But we still need to elevate the quality of presentation of our brands,” he maintains. “We have to make sure that we invest regularly in merchandising. But I think too we need more help from our (retail) partners to get out of the stores more and into the face of our consumers.”
Above all, the group must not rely solely on traffic growth for sustained success. “This is particularly important when you consider the several sources of traffic growth,” explains Hiéronimus.
“One will be the greater China travellers who will crave cosmetics, and will buy in travel retail, because of the price differential. But another part comes from low cost carriers. We need to make sure we have something to tempt those travellers on a budget, to capture this additional traffic and turn it into beauty sales.”
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L’Oréal Luxury Products’ Perfume Lounge features, for the first time, all of the group’s prestige fragrances, within a high-profile animation that has been tailored to meet the demands of global airport shoppers |
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The Moodie Report’s Rebecca Mann (fourth from right) attends the official Kiehl’s opening, at Dubai International Airport T3 |
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L’Oréal and Gebr Heinemann showcased the Armani Privé fragrance collection at Istanbul Airport earlier this year |
And in the past 12 months, L’Oréal has done a commendable job. “As far as driving penetration in concerned, in 2010/2011 our retailers have taken the opportunity of a good market to renew a lot of shops, to do a lot of refits, and we have been investing too,” notes Tarral.
“There has been qualitative growth and an increase in penetration. According to the [2011 CIR Global TR] survey, in eight airports 13% of international travellers are buying cosmetics. It used to be 8-10% so things are going in the right direction.”
“The whole retail industry is taking the right steps towards quality and a better shopping experience,” echoes Hiéronimus, “but I think there is still a lot to do, particularly with male consumers. There’s no industry in the world that can talk to men like travel retail can. And we happen to have the best masculine brands in skincare and fragrance.”
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Travel retail exclusives, such as Biotherm’s Travel Recharge duo, help inject excitement into the airport offer | |
Travel retail exclusives is another way to inject some excitement into the offer, according to Tarral. “We have been working hard on this,” he notes. “This year we introduced Travel Recharge from Biotherm. Next year we will launch a new travel tested solutions line from Kiehl’s, which I think will be extremely powerful. It has been created with frequent flyers in mind and offers good added value.”
Tarral admits there is much more to be done in terms of establishing a relationship with consumers before the travel; this is an area where digital has been earmarked to up the ante. “We are still at the beginning with this, and at the moment we don’t exactly have all the tools,” he says. “But it’s clear that the future will be about better targeting of the individual consumer.”
Such a holistic approach reinforces the idea that there are many valuable synergies between travel retail and the domestic market. “As air traffic increases, the traveller is looking more and more like our regular local consumer,” Tarral insists. “This means that all the efforts we are making in terms of innovation and marketing our brands generally, directly benefits the travel retail channel.”
To capitalise on this, where possible, L’Oréal rolls out its flagship launches into travel retail and domestic markets simultaneously. Recent key introduction include Diesel’s Loverdose, Lancôme’s Visionnaire, and the new Midnight Rose version of Trésor, fronted by Harry Potter actress Emma Watson.
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The latest feminine fragrance from Diesel, Loverdose, is performing strongly for L’Oréal in travel retail |
“Our role as [market] leader is to innovate and bring new and exciting products and retail concepts to our consumers,” declares Hiéronimus. “Our latest launches are doing extremely well, and we also have some big initiatives coming on Yves Saint Laurent, within fragrance and make-up. Next year we also plan to enter the skin care market strongly with YSL, with a product called Forever Youth Liberator.”
Hiéronimus underlines the importance of building strong skin care pillars for its brands, particularly its “couture” houses such as YSL and Armani, in order to bolster the group’s Asian appeal.
“Asia plays such a strong role in our business, and skin care is the driving category for this market,” he explains. Hiéronimus also flagged the rapid travel retail expansion of the skin care dominant Kiehl’s brand, describing it as one of the driving forces of the division. “We will continue to grow Kiehl’s in airports, [a channel] that offers a perfect fit for today’s consumer and this incredible brand. Expect to see more of it next year.”
Hiéronimus concluded: “Beauty is not a need-based industry; it’s about creating demand for the offer. Like luxury, it’s all about creating desire. If we do not innovate and also surprise – because innovation alone is not enough – we will not manage to make this market grow.”
