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“Let’s grow the market, whatever the traffic“ |
Eric Tarral Managing Director Travel Retail Worldwide L’Oréal Produits de Luxe International |
FRANCE. Eric Tarral, one of the most influential figures in travel retail, has called for a fresh new approach to the sector as it emerges from the 2009 crisis.
In a landmark interview, to be published in full in The Moodie Report Print Edition later this month, the Managing Director Travel Retail Worldwide of L’Oréal Produits de Luxe International (Luxury Products Division) says the industry must stop relying on passenger traffic increases to boost sales and focus on footfall and penetration instead.
During the crisis the company enlisted the services of boutique consultancy to review the travel retail channel. Following that study Tarral drew a series of fundamental conclusions. The most pivotal was the fact that the travel retail industry had been riding “the elevator of traffic” for many years. “Suddenly,” Tarral says in the interview, “the elevator just stopped.
“What do you do if the elevator stops? You just have to walk up the steps.”
The second key finding was that the industry’s retailers were overly focused on solving short-term problems. Asked to rank their priorities in their relationship with the brand company, basic short-term needs (fulfilment, stock levels, cash flow etc) kept dominating, whereas strategic issues (category development, consumer insights, growing penetration etc) were way down the agenda.
“They were just left over – they were not in the focus,” Tarral recalls with disappointment. He met a number of key retail clients and suggested a change of approach.
“I said, let’s walk the short term against the long term together and let’s try to work on the assets of our industry – not only the fact that traffic is growing but the fact that we have 1.8 billion passengers sitting somewhere in the airports – and we are only getting 8% of them buying our products.”
So there’s still 92% waiting to be tapped?
“Yes. And this is what we have started to do. As an industry leader – with some 20.4% of the market – I think that we have the responsibility of giving some solutions, some answers to the industry. I want to push forward the very simple idea that I call my mission for 2010 – let’s grow the market, whatever the traffic.”
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Génifique Youth Activator: A technological breakthrough |
Tarral says that travel retail is entering a new phase of its development. It will be a period, he says, marked by uncertain traffic growth – “maybe up a few percentage points for 2010” – with particular focus on emergent dynamics such as the outbound Chinese traveller (“probably the most significant growth opportunity”).
With the industry’s long-term “˜elevator’ of traffic growth operating slowly at best, Eric Tarral wants to champion the art of penetration driving instead. “The key levers in this phase are going to be different,” he says. “They will be all about working on your consumer, knowing your consumer, talking to your consumer and caring for your consumer.”
Sharing consumer insights between retailers and brands will be essential, he claims – common practice on the local markets but not in travel retail. But that can and should change, he insists.
If, or when, the traffic growth returns, that will be a welcome bonus, Tarral says. But it won’t be what underpins the channel’s prospects. It’s an interesting – and challenging – proposition which implies that the industry “˜Trinity’ (brands, retailers and airports) must be better at what they do than simply relying on underlying traffic growth.
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Parisienne: Creative collaboration |
Innovation, Tarral says, must be a constant. The company’s big launch successes of 2009 – in a deeply depressed environment – underline what can be achieved if the full co-operative power of the airport stakeholders is unleashed. He highlights the extraordinary success of the new anti-ageing skincare launch from Lancôme, Génifique Youth Activator. Positioned as a futuristic treatment that revives the activity of the skin’s youth genes, Génifique was “a huge technological breakthrough” says Tarral, “the kind of breakthrough you only see once in ten or 15 years.”
Other examples were Ôscillation, the new vibrating “˜power mascara’ that proved such a hit through 2009, and Skin Vivo from Biotherm, which also underlined the impetus brought by innovation and focused investment.
The group’s blockbuster success with its French travel retail launch of YSL feminine fragrance Parisienne [described as “the best launch ever in French travel retail” by YSL Beauté Travel Retail Director Christophe Marque] underlined the power of creative collaboration with retailers and airports (Aelia and Aéroports de Paris).
“I would say it’s a good example of the way we can maximise things – acting on all the levels we have in travel retail,” says Tarral. “For example we did advertising in all areas both outside and within the airport, plus we offered special gifts with the launch. We had a massive presence with the product, and we used a lot of new technical means to bring the people to the novelty.”
[Look out for the Eric Tarral interview in The Moodie Report Print Edition, out this month.]
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