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American Spirit: L’Oreal USA’s Prestige Market

Carol Hamilton shepherds L’Oréal’s U.S. prestige business.

As president of L’Oréal’s products division in the U.S., Carol Hamilton is charged with stewarding the beauty giant’s prestige products in American distribution.

Hamilton, who was named to her current position in the Luxury Products Division in July, spent 24 years in L’Oréal’s mass divisions, ascending to the  role as president of L’Oréal Paris, where she was largely credited with building that business into a beauty powerhouse.

These days, Hamilton’s duties involve dealing with primarily American channels of distribution, such as department stores and home-shopping channels, and helping to plot global strategy for the company’s luxury portfolio — especially American-identified brands such as Ralph Lauren Fragrances and Kiehl’s Since 1851.

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“Department stores have been partners in building our luxury business, and we’re working with them to work through trying times,” says Hamilton of the U.S. market. “Where we’re focusing most is on innovation. We’re finding that department stores, more than ever, are the best places to dramatize innovation  through visual weeks, product demonstrations and beauty advisers. We’re able to launch best at department stores.”

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Hamilton points to Lancôme’s Oscillation, which bowed last fall, as an example. “To become the number-one mascara in your first month is a testimony to the strength of what department stores can do when you work together as partners,” she says. “In every meeting, we talk about not only the best way to launch our new innovation, but also the right service model. The more we can talk to the consumer and train her in the way she wants to be trained rather than to hard sell her is the absolute key to keeping our department store business vibrant and growing.”

Hamilton also is open to growing the business via the Internet and home shopping channels. “As long as the channel presents our product and talks to the luxury customer in the way she wants to be talked to, then we consider it a viable part of our portfolio,” she says. “For example, when you look at Lancôme selling Oscillation in department stores, they [gave it to] every single beauty adviser and tested it on every single consumer. But they could only reach the customers that came to their counters. On HSN, it’s exactly the same service. We are demonstrating all the benefits of this luxury product to the luxury consumer with service — it just happens to be in the privacy of her home. So it’s a different model, but gives service to the customer in the way that she wants it. We see our multichannel strategy as very complementary to our traditional channel.

“Also, every time we go on HSN, our department store sales skyrocket, because we’re reaching a broader base of consumers,” says Hamilton. “She may see the product on HSN, and watch 18 minutes out of an hour show. That’s much longer than a typical department store consultation — so she really knows the benefits. The next time she’s in a department store and runs out of mascara, she then sees the Lancôme counter and remembers the HSN programming. The explosive growth of beauty on our retailers’ sites also shows the complementary value of multichannel retailing.”

Shu Uemura, another of the brands in Hamilton’s portfolio, sells on QVC.

“Shu is to me one of the most important assets in our portfolio. It’s a niche brand, but still, it is the quintessential makeup-artist brand — Shu was the original makeup artist. It’s an amazing brand when you put together the artistry aspect and science aspects of it. The combination of all of those assets coming together creates a brand with an incredible story. It’s also a younger brand — it appeals to younger consumers because of its transparency, love of color, playfulness. And the association with Madonna doesn’t hurt.” The brand is also particularly strong at Neiman Marcus, says Hamilton: “It’s a specialty store business, and we value that very much.” Both color and skin care are booming for the brand, she adds.

At the fragrance bar, Hamilton is particularly bullish on Ralph Lauren’s portfolio of men’s and women’s fragrances, perennial bestsellers for the company.

“Ralph Lauren is a huge fragrance business for us,” says Hamilton. “Ralph Lauren, being the quintessential American designer, transcends cultures because of his incredible fashion stance. He brings unique American values and is the ultimate lifestyle brand.”

Both of L’Oréal’s U.S.-centric brands — Ralph Lauren Fragrances and Kiehl’s Since 1851 — have a strong global business, although they are strongly associated in customers’ minds with the American market, says Hamilton. “When a brand has a well-defined story and a very strong DNA, it translates amazingly well. If you take Kiehl’s, for example, we are now in 33 countries. The press event for the launch in China was [at the end of April] [and] we launched in Japan in 2008. Our second-largest business is in Korea. We find that, as long as the story is strong — a full beauty experience, not just a star product, but a total brand experience — that translates extremely well, because, as the world becomes more global, what consumers are seeking are strong local stories.”

In the case of Kiehl’s, she notes, it’s a story about an apothecary in New York’s East Village. “You’re getting a piece of New York through the Kiehl’s story, and that resonates extremely well.” The brand encourages support of local charities in each of its markets, giving consumers a local anchor, so to speak.

Hamilton also is overseeing an organizational change in progress. “We are creating a new group, called the Specialty Beauty Group,” explains Hamilton. “It will be four brands: Kiehl’s, Shu Uemura, Armani Beauty and YSL Beauté, with one sales force selling these brands to existing distribution. On the fragrance side, we’re capitalizing on our in-depth expertise with our Designer Fragrance Group; Leslie Marino and her team will be responsible for the sales of Armani Fragrances — which they already are — and YSL fragrances. Within the Specialty Beauty Group, Marc Rey will handle YSL and Armani, with the strategic responsibility for both beauty and fragrance. Stephane de la Faverie retains his position as general manager on the entire Armani brand. This will be effective July 1.”

As for why it’s being done, Hamilton explains: “The true strategy is to build centers of expertise that correspond to the luxury retail world today. We want to be much more customer-centric than perhaps we’ve been able to be when sales forces have sold smaller brands. We’re going from a brand-centric organization to a brand-centric and consumer-centric organization. The ultimate strategy is to not only service the brand, but the customer in a much stronger way.”