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Puig’s Brand Architect Talks Fragrance

Chief brand officer José Manuel Albesa commands a unique scope, thanks to a purview spanning all four layers of the company’s fragrance holdings.

José Manuel Albesa has a room with a view.

From his fourth-floor office in Puig’s Paris headquarters, the chief brand officer can see down the Avenue des Champs-Élysées. But from his figurative vantage point, Albesa commands a unique scope, thanks to a purview spanning all four layers of the company’s fragrance holdings, both owned and licensed, plus a fashion component.

He described the company’s perfume portfolio — whose products, ranging from about 10 euros to 120 euros, or $13.60 to $163.15 at current exchange, are carried in anywhere from 500 to 40,000 doors — as being built in a pyramid structure.

Topping it off is “niche” brand Comme des Garçons. Albesa said niche fragrance consumers are highly sophisticated, and their “olfactory experience makes the big difference,” with ingredients, quality and craftsmanship being key. “They want to enjoy a unique experience and share it in a small world,” he said. “If you give them the right experience, they will be your best ambassadors.”

Prada and Valentino comprise the “Premium” labels, with the thrust there being “on the excellence at point of sale,” said Albesa, adding this includes merchandising, marketing, service, gifting and consumer-relations management strategies.

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Carolina Herrera, Paco Rabanne and Nina Ricci — Puig-owned brands — make up the “prestige” group, “where our focus is on 360-degree communication; it goes from digital to merchandising and advertising,” he said. “It’s the whole mix that tells a story, and that’s what makes it coherent and strong.”

Then there are Puig’s mass-market fragrance labels, which it calls the “beauty” brands, such as Ágatha Ruiz de la Prada, Shakira, Antonio Banderas, Mango and Benetton, that are licensed, plus some of Puig’s own products.

“[Their] focus is value for money,” said Albesa, who explained about five years ago Puig decided to keep some 25 mass brands, discontinuing about another 25 in the category. At the time, the company commanded approximately half the market share in Spain’s mass channel, and still commands 48 percent.

“We are now maintaining market share with a big reduction of brands,” said Albesa, adding the segment is also driving growth in Latin America. “We focused on fewer but bigger brands through storytelling.”

In fact, Puig ramped up the storytelling in all its fragrance segments. The first two campaigns out after the mandate included an enchanted, modern fairy-tale world created for Ricci’s apple-shaped Nina fragrance in 2006.

Rabanne’s “Be a Rock Star” push from 2011 for its Black XS scent franchise involved the label introducing its Web site be-a-rockstar.com with Universal Music Group. That featured short films about nine bands and an immersive game allowing users to see the world from a musician’s perspective.

Albesa also highlighted a campaign from 2008 for Rabanne’s 1 Million, which is now among the world’s top-five selective men’s scents overall. In the spot, a model dances and with each snap of his fingers, a seemingly magical thing happens. Once, a car appears. In another instance, it’s a bag of money. A third snap causes a woman’s dress to fall to the ground.

Helping leverage Puig’s storytelling is the rise of digital.

“With a [TV] spot, you can only tell 30 seconds of the story, so it’s really through digital that we are getting amazing results,” he said.

Nina has the most fans of any fragrance on Facebook — more than three million — and Carolina Herrera’s “212 VIP” Web show boasts more than 20 million views.

Albesa said young consumers today are more interested in establishing a relationship with a brand than a product.

“So for us, digital is the best way to tell stories because you have more content, engagement, advocacy and can really relate to them,” said Albesa. “Two years ago, we increased our investment in digital, and it has become a priority in the storytelling process.”

 

Other ways to cement that brand relationship with young people could include a well-placed pop-up store.
“It is key to go where they go,” said Albesa.

 

Licensors laud Puig’s ability to create fragrance brands. Pop star Shakira said by the time she signed a license with the company in 2008, she “had been wanting to enter the fragrance arena for some time as a new outlet for expressing my creativity. Puig understood my vision, and we work side by side on every step of the process, from the composition of the notes to the packaging to the marketing campaigns,” she said. “They are my partners in every sense of the word.”

“The Puig [executives] are more like merchants of dreams than anything else,” said designer Ágatha Ruiz de la Prada, whose four fragrances are licensed. “They construct a whole universe of fancy and desire around each product that is presented to the market. The ideology and aspirational cues of each perfume are as carefully studied as the fragrance itself.”

“What makes Puig unique in relation to its approach to fragrances is its talent for explaining the brand values through perfume,” said Isak Andic, founder and chairman of Mango, another licensor. “Encapsulating the DNA of a brand into a fragrance is a difficult task.

“[Fragrance] is a new product category that we have never developed on our own,” he continued. “The extensive distribution channels of Puig and its striking advertising campaigns have helped Mango extend its brand familiarity in several markets.”

Adrian Joffe, chief executive officer of Comme des Garçons International, recalled that Puig approached his label, and “we created together a revolutionary license agreement, whereby they would license and distribute our most popular fragrances and develop new ones together in the pebble[-shaped] bottle, all the while leaving us free to continue to create and develop our own fragrance in Paris,” he said. “I believe there is no other license agreement such as this in the business, and it has only worked so well because of the mutual respect and admiration we have for each other’s companies, not to mention a great mutual affection.”

 

Albesa believes big potential lies ahead. One strategy is to continue enriching Puig’s storytelling model with an even greater focus on the consumer. Another is brand-building.

“Now the opportunity is to build brands,” he said. It’s an exercise that’s been under way at Paco Rabanne, where Albesa oversees both the fragrance and fashion divisions.

“What’s interesting is how to build a brand with a [single] perspective,” he said, adding fragrance and fashion are part of that, “so they have to talk the same language.”

The niche segment shows promise, since the category responds to today’s stores’ quest for exclusive brands and consumers’ search for uniqueness.

“The space allocated by some retailers to these brands is amazing, and they are really working and providing the right the amount of sell-through,” said Albesa. “I think there is room for exploring niche brands in the future in our portfolio.”

Also upcoming is the integration of Jean Paul Gaultier fragrances into Puig, in mid-2016.

“In [prestige fashion brands], the focus for years to come will be to excel in the brands we own today,” said Albesa.

Each has a different positioning. Ricci comes with a French heritage and romantic aura, while Rabanne is eclectic and audacious, for example.

“In the [mass] arena, we are looking for opportunities at the local level,” said Albesa. “It’s more focused on local or regional brands.”

He says the largest business challenge today is related to retail and digital.

“I think in the years to come, more and more we are going to see a digitalization of retail and we are going to experience ‘retailtainment’ in digital. So both concepts are merging,” said Albesa. “No one knows where the limits are.

“We see an acceleration in digital, which is really going to take off,” he continued. “For me, this is the big challenge ahead: how the digital landscape is going to change consumers’ attitudes, and how retail is going to evolve to compensate for this. [What’s] really interesting is how brands are going to touch the consumer or the shopper.”

Puig is also focused on continuing organic growth in view of the goal to reach 12 percent market share by 2020, which would make it the third-largest prestige fragrance player worldwide. In 2013, it ranked sixth with an 8.6 percent stake.

“This is a big challenge in a market that is not growing today,” he said.

There’s also the question about how best to create excitement in the category.

Said Albesa, “The whole business has to be re-enchanted.”