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An Rx for Crisis: Cultural Diversity

EVIAN, France — "The luxury products business in the U.S. is in a form of crisis right now," declared Lindsay Owen-Jones as he looked out at a historic gathering of global beauty chiefs attending the fourth WWD Beauty CEO Summit.<br><br>The...

EVIAN, France — “The luxury products business in the U.S. is in a form of crisis right now,” declared Lindsay Owen-Jones as he looked out at a historic gathering of global beauty chiefs attending the fourth WWD Beauty CEO Summit.

The L’Oréal chairman and chief executive officer opened four days of keynote speeches and panel discussions the evening of June 23 with a tandem presentation featuring his L’Oréal colleague Beatrice Dautresme, executive vice president of strategic business development. Her speech, focusing on the need for global beauty marketing to become more cultural, was introduced and set up by Owen-Jones, who posed a simple question. “Is there a crisis of our brands and our products, or is this a crisis of our distribution,” he asked, while pointing out that the problem is not as simple as consumers trading down in tough times. In some markets with multiple channels, there are cases where higher-priced products are outselling more affordable versions. In some markets, the high-priced segment is growing quickly and in others it remains soft.

He urged the CEO-packed audience to “look forward to the future and think and reassess the equation there is between luxury beauty products and the distribution channels that they use.” The question “seems to me typical of the extraordinary diversity with which we are confronted.”

He noted that any particular answer “would be right in one country and wrong in four or five other major countries. It’s not just a question of distribution or types of products or brands — all of those struggle to remain relevant — but they’re confronted also with more and more regional differences, more and more cultural differences, and they have to adapt.” This, he added, is “despite the fact that, historically, luxury brand manufacturers have been about as flexible as Henry Ford discussing the color of cars.”

Owen-Jones was talking to the right crowd. Sitting in a rustic-styled concert hall within breathtaking sight of Lake Geneva and the Swiss Alps was the who’s who of global beauty. Among those sitting in the room were Leonard A. Lauder, chairman of Estée Lauder Cos.; Patrick J. Choël, president of LVMH Fragrances & Cosmetics of Moët Hennessy Louis Vuitton; A.G. Lafley, chairman, president and CEO of Procter & Gamble Co.; Andrea Jung, chairman and CEO of Avon Products Inc., Morio Ikeda, president, CEO and chief operating officer of Shiseido Company Ltd., and Robert L. Mettler, chairman and CEO of Macy’s West. They were among the 11 keynote speakers, including Marcel Frydman, president of Parfumeries Marionnaud; Javier Cano, chairman and CEO of Puig Beauty & Fashion Group; Francesco Trapani, CEO of Bulgari Spa, and Alain Dominique Perrin, CEO of Richemont SA.

Panel discussions were led by Christian Courtin, CEO of Groupe Clarins; Chantal Roos, chairman and CEO of YSL Beauté; John Demsey, president of MAC Cosmetics; Heidi Manheimer, president of U.S. operations at Shiseido, and Marc Pritchard, vice president of global cosmetics and personal care at P&G.

In all there were 39 speakers, each of them taking aim at what they saw as the industry’s most pressing problems. As a strong indicator of the industry’s mood much of the talk centered on brand building and leadership, compared to past summits, when department stores were pummeled and promotional tactics, like gift-with-purchase, were castigated.

The four-day symposium, entitled Beauty’s New World Order, was the fourth beauty summit. It was sponored by parent Fairchild Publications in concert with the Fédération des Industries de la Parfumerie.

The audience at Evian numbered nearly 200 top beauty executives during the four days of discussion, which began when Owen-Jones stepped to the microphone the evening of June 23. They came from 13 countries, representing 93 companies.

Dautresme raised the question: “How relevant is it today to market a single beauty brand around the globe.” Her answer: “It’s absolutely relevant — but it’s more challenging than any point in our history.”

Declaring that “each civilization retains its own vision and perception of beauty,” Dautresme offered some tantalizing examples. Take hair, for instance. In Protestant Anglo-Saxon cultures, ruffled messy hair is seen as having somewhat of a disorganized mind. The Japanese see hair as a “hat” signifying a cultural message. Hair coloring is a transgression, a revolt against the established order, particularly when dyed pink or yellow. In the Latin world, such as Brazil, hair is a prime beauty asset. “It must move with the hips and has deep sexual connotations,” she observed.

Similarly, different skin types react differently to humidity and sunlight; blacks and Hispanics have fewer wrinkles than Caucasians.

Since the Western cosmetics companies marketed their products in the West, they developed a “Caucasian-centric,” or Barbie doll, vision of beauty. When these brands began proliferating beyond their original borders, they took the Barbie look with them, which doesn’t necessarily sit well with the local population.

So Dautresme posed the question, “Should we, as cosmetics marketers, seek a single image of the ‘perfect’ woman — la femme universelle — who is at once Caucasian, Asian, Hispanic and Black?”

She added, “So long as we’re dealing with developing product responses and product adaption, the challenge is clear: The product quality curve should logically follow the progress in research and adjust itself to the new demographics.”

On the emotionally charged issue of advertising, Dautresme continued, the professional image makers of the West “have had to completely rethink the fact that for 30 years they projected on the entire world a singular notion of beauty. We are now in a very different period; the world has changed values, and the signals of modernity are mixed and multicultural.”

She credited Owen-Jones with foreseeing the need for anticipating demographic shifts, not just following them, and explained that L’Oréal takes different approaches to diversity, depending on class of product — mass, luxury, salon or dermatological — or a specific brand’s country of origin.

The more popular a brand, the more it must reflect local sensitivities. The Garnier hair coloring brand adapts its worldwide advertising campaign by using local models. And diversity is hip, as evidenced by the fact that Lancôme recently recruited Devon Aoki, a German-Japanese runway model.

Dautresme sees the biggest challenge in global marketing as achieving international quality. Historically, local products could handle climate and skin conditions but lagged in technology, or advanced international products overlooked local needs. Dautresme insists that brands now must offer the latest in scientific capability, as well as address the local climate, skin and hair needs. Moreover, they must reflect the culture in which they are marketed.

And while international marketers are seeking to appeal to a diversity of cultures, woman are becoming more proud of their ethnic uniqueness. Due to the emergence of Chinese models on European catwalks, slanting eyes and high cheekbones are now more popular in Hong Kong. Similarly, African and West Indian women living in Europe want products to highlight the curliness of their hair.

“One clue is the fact that young people have become multicultural in their interests. “Adolescents now have much more in common with each other than they would have had with their own parents; they listen to the same music, watch the same TV programs, eat more or less the same things, wear the same brands of clothes and all communicate with the Internet,” she said, adding that “This borderless generation holds as core values both fusion and multiculturalism. They consider themselves members of a mega-culture that is young, global and dynamic.”

But far from being dominated by mega-brands, young people are free to choose from a range of tastes and a raft of brands that cultural fusion offers. “Today, when a young Dutch woman wears her hair in dreadlocks, it may reflect a support for the Rastas, but most probably it is an assertion of autonomy and modernity. Above all, her aim is to have fun and be noticed for what is unusual and least expected in her,” Dautresme said.

She noted, “Every one can say ‘I choose myself; I chose the image that I want of myself. It may differ from the one I was born with, but I am proud of it.’”