Frédéric Rozé, president and chief executive officer of L’Oréal USA and executive vice president of parent L’Oréal SA for the Americas Zone, opened the WWD Beauty CEO Summit with a stirring call to action.

This story first appeared in the May 23, 2014 issue of WWD. Subscribe Today.

Flashing glints of wit, radiating charm and showing a bit of humility, he adroitly demonstrated how the summit’s theme, “Metamorphosis,” serves as a locomotive for growth for L’Oréal and the industry.

“At the end of the day, our success comes from our capacity to transform ourselves, to metamorphose ourselves,” said Rozé.

He then delivered an insightful analysis of L’Oréal’s advances and the industry’s needs, ticking off key moves that triggered transformations in each of the American affiliate’s main businesses. On a broader corporate scale for the Americas and beyond, the high-service brand categories were regrouped into a select division and the mass-oriented consumer product division was decentralized and localized “to stick to consumer needs in the different regions,” Rozé noted.

He then highlighted five areas for the industry to ponder.

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• New customers, new markets: More aggressively target men, with products like hair coloring, and pursue undertapped markets like older people.

The young generations of “digital natives” must be engaged and communicated with differently. Advertising must be rethought. Rozé noted that some of L’Oréal’s fastest growing brands — Kiehl’s and Urban Decay — tend to advertise the least. “This is going to be the model for the digital natives,” Rozé advised, reassuring nervous publishers that they will be supported. The digital world requires managers to “always be on.” Rozé observed, “This is going to imply a lot more delegating. It is the end of the top-down only.”

• New innovations, new disruptions: “We all think that we must focus more — fewer, bigger, better.” But L’Oréal also sees a profusion of niche products. “Niche can be big with tenacity, resilience, passion.” Moreover, devices “transform the skin now, and on top of that, connected beauty is coming with the trend of self-measurement.

• “Why don’t we reinvent the retail collaboration?” He said while U.S. retailers have an impressive capacity to strategize growth with their vendors, there is always this question: who owns the consumer — retailers or their vendors? “It’s really urgent to unite our forces to better understand and to better touch our customers and develop our common businesses,” Rozé declared.

• Reinvent go-to-market strategy: “I am shocked by the level of promotionality in this country. You have so many gifts, so many sets, so many bags,” he said. “Why the destruction of value that adds nothing in units in the market and draws down the prices?” He suggested the answer is innovation.

• “A new generation of [management] teams is coming,” Rozé said. “So different, so smart, so fast — the Millennials.

“We must recognize that they are attracted by so many different companies outside beauty — Google, YouTube, Patagonia — that are giving a different perspective on professional life with strong sense of purpose…. We must communicate better our vision of beauty in order to attract those talents.”

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