Lisa Price, Nichole Fourgoux

Courting the burgeoning multicultural market is expected to be one of the biggest topics at this week’s National Association of Chain Drug Stores Annual Meeting, and L’Oréal USA comes armed and ready.

Courting the burgeoning multicultural market is expected to be one of the biggest topics at this week’s National Association of Chain Drug Stores Annual Meeting, and L’Oréal USA comes armed and ready.

This story first appeared in the April 24, 2015 issue of WWD. Subscribe Today.

The company will unleash its newly minted Multicultural Beauty Division, melding together Carol’s Daughter with products from its SoftSheen-Carson portfolio during top-to-top meetings at The Breakers Hotel in Palm Beach, Fla.

The size of the prize is appealing: African-American, Hispanic and Asian shoppers, over-index in virtually every beauty category in comparison to the general market.

Although the multicultural population’s spending won’t reach fever pitch until 2043 — when today’s minority groups become the majority of the population — Nicole Fourgoux, general manager for L’Oréal Multicultural Beauty, said the time to develop bonds is now. “Multicultural consumers may only be 39 percent of the total population now, but in 12 out of the 20 top cities, multicultural consumers are the majority and are representing 27 percent of the beauty spend,” Fourgoux explained. “Everybody is talking about the evolution of the population, but it really is happening today.”

To better understand these consumers, L’Oréal took a deep dive into shopping habits, uncovering gaps between desires and what’s on mass shelves. “We are starting by identifying unsatisfied needs — where there’s still open space,” said Fourgoux, who formerly held the position of general manager of SoftSheen-Carson.

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By changing the mindset, L’Oréal expects to grow the entire mass beauty business. “When we look at who is shopping the multicultural set, it truly is everybody.” The research suggests that departments should undergo a transformation with a fresh eye on assortments, presentation and promotional practices.

Fourgoux said the goal is to make it easier for multicultural consumers to find stores with a mix tailored to their needs. “Many people are shopping in different stores or using homemade recipes. It is a lot of work and energy. We see an opportunity to make things easier.”

L’Oréal’s first step will be onboarding retailers about the potential. Some categories such as hair color, she noted, may require a much bigger selection to satisfy shoppers.

And although new products can’t be ruled out, L’Oréal is matching lines in its current portfolio that speak to the desire of diverse consumers. One example is Amla Legend, an offshoot of the Optimum Salon hair-care brand, which addresses all needs for textured hair and is now gathering steam with Hispanic consumers. Another is Dark and Lovely, which is now marketed to both straight and naturally curly styles.

The brands incorporate rituals and terminology that resonate with multicultural consumers such as LOC, which stands for leave-in conditioner, oil and cream — a moisturizing method.

Creating a compelling environment is also paramount to attracting multicultural shoppers, especially as specialty stores continue to siphon off shoppers from mass.

Many chains still separate products in departments called “ethnic,” when that’s not how consumers shop, according to Lisa Price, founder of Carol’s Daughter which L’Oréal acquired last October. Price and Carol’s Daughter have served up insights into the diverse shopper — one of the biggest is that consumers don’t shop solely by ethnicity, especially in hair. “Consumers seek solutions to hair conditions such as thinning or wavy,” explained Price, who made her first products in her kitchen in 1993. Furthermore, she cited proof that consumers shop by need rather than ethnicity from the fact that 56 percent of those who purchase her line from HSN are Caucasian.

Retailers confirm there is a bubbling demand for products tailored to a more diverse America, but presented outside of segregated aisles. “An area we’ve been watching grow is our hair-care business,” explained Walgreens’ Shannon Curtin, group vice president, beauty and personal care. “We have some unique hair types you only see here in the United States. You can have a mom with a specific hair type, a dad with a different type and their children have unique hair types as well.”

Carol’s Daughter has been an example of the success the right multicultural strategy can deliver, confirmed Target executives who implemented the line in 2014. She also successfully straddles mass and class with special products, packaging and a pricing strategy (mass items range from $12 to $16 versus prestige which starts at $18) for the mass market. Additionally, she crafted an exclusive line for Target, which has been discovered by Hispanic consumers called Sacred Tiare. Carol’s Daughter body care is currently shipping into Walgreens.

While not every door requires a multicultural planogram at this time, learnings from clusters of stores already set up will help retailers have a better understanding of the departments of tomorrow. Targeting the new composition of shoppers could be one of the “most dramatic changes we will see,” Fourgoux predicted. “We feel it is more important to get it right first in the big markets that over-index multicultural because I believe it will help adapt to more markets in the future as the population evolves.”

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