NEW YORK — O Boticário may not be a name on everyone’s lips, but it is the largest cosmetics and perfume merchant by store count in the world.
What began as a small pharmacy in Curitiba, Brazil, in 1977 has blossomed into a corporation with more than 2,300 units in eight countries.
According to Sergio Barbi, franchise manager, the beauty retailer is eyeing new markets, which could include the United States. With the Latin population exploding in the U.S., experts agree there is potential for South American products.
The expansion vehicle for O Boticário is franchising. While many beauty purveyors have shied away from the franchising, O Boticário has shown it can work. Few chains other than Canada's Shoppers Drug Mart and the now defunct Drug Emporium have experimented with franchising stores in North America because of a fear that there won’t be store unity.
Barbi said a strict commitment to training makes the difference in its franchise operations. “Franchising offers owners the chance to be entrepreneurs, while also giving the marketing muscle of a corporation,” he said. Based on sales growth, the formula appears to work. Sales hit $450 million in 2002, up from $293 million in 2000. Barbi predicts ongoing 10 percent sales gains.
The genesis of the franchise concept occurred when a group of interested executives saw O Boticário's second store, which opened in a bustling Brazilian airport in 1979. Not only was the company ahead of the curve regarding airport openings, but that exposure lead to interest in reselling O Boticário's brands via franchising.
The first franchised store bowed in 1980, and within five years there were 500 franchisees in Brazil. In 1986, O Boticário expanded into Portugal and there are now stores in Peru, Bolivia, Paraguay and Uruguay. There are also 440 counters in department stores in Japan selling O Boticário goods. Brazil, however, accounts for more than 97 percent of global sales.
Much like The Body Shop or Yves Rocher, O Boticário produces its own brands and products and takes a natural products positioning. The company is swift to market with new concepts and offers a broad selection spanning more than 650 different items. The assortment includes perfumes, skin care, makeup, body lotions, shampoos and sun care. Its first women’s fragrance was introduced in 1979, Acqua Fresca. It remains one of the chain’s bestsellers.To keep the assortment fresh, O Boticário develops 200 new items each year. “Pricing for the fragrance is around $25, so we’re not at the top of the line, but not the bottom,” explained Barbi.
Assisted self service has been a smash for O Boticário. “We removed the counters a few years ago and sales rose dramatically,” Barbi said. An intense training program ensures all stores offer high levels of service, he added.
O Boticário has a robust loyalty program with more than 200,000 customers participating. There are also segment- specific programs such as Boti Friends Club for kids ages three to seven. The Ma Cherie Club is for five- to 12-year-old girls while another club targets teens.
Ninety percent of company sales are done in store, but O Boticário also produces sales via e-commerce, temporary stores, trailers and small town shops.
Social responsibility is said to be paramount at O Boticário. The company founded the Boticário Foundation for Nature Preservation and since 1996, the foundation has been the number-one private investor in nature preservation in Brazil.
“We connect to our consumer by making sure our products are so good that they come back and buy them again and again,” said Barbi. “Now we hope to introduce our quality items to other people.”
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