Ask Coty Beauty president Renato Semerari what drives him, and his answer is delivered with a characteristically big grin: fun. A cursory Google Images search certainly bears out the answer. There he is smiling broadly with Heidi Klum, posing with Kate Moss, embracing Solange Knowles. They are just some of the stars and spokesmodels in the stable of 33 brands that he oversees globally (Lady Gaga, whose signature scent is scheduled to launch in August, is the latest), which all told account for about half of Coty’s sales, or an estimated $2 billion. Serious business indeed. Here, Semerari talks trends, technology and his ongoing tennis rivalry with Coty ceo Bernd Beetz.
How do you see the beauty industry evolving in the next two to five years and what opportunities excite you the most?
I see a lot of opportunities. Technology and creativity will continue to be the driving forces. When I look back over a couple of years at what has happened in the nail domain, it’s a picture of what can happen in other segments of the industry. New ideas, new technologies, a lot of creativity, some real innovations that made a big difference in the base—that is something that will continue to be ahead of us.
The contribution of emerging markets will help in that direction. When you look at, for instance, China and the rate of penetration of skin care in men, it’s way bigger than it’s ever been in the U.S. or western Europe. There will be new trends, new demands coming from new consumers.
How do you stay up to date with trends in emerging markets?
You need to be there. You need to have your radar screen switched on, and look at what is happening. The selective industry is very interesting for us, because many times [trends] cascade from prestige to mass. The Internet is also a fantastic source of information, and keeping up with what bloggers say in specific countries gives you a lot of clues.
What do you think the industry needs to pay attention to most in the year ahead?
They need to pay attention to what consumers want, how consumers judge things, how they perceive what we propose them. Consumers are more educated and have the means to get more information. That gives a lot of power to consumers to make their choice. There was a time when marketers went over the top to make their point. We need to be truer to reality, because we are talking to people who know better.
Truer hype. I’m not saying before we were dishonest, but we had a bit more freedom in the way we expressed ourselves, because we were judged by a less-informed audience.
Chief executive officer Bernd Beetz has said he wants to double Coty’s sales by 2015. Is that a realistic goal?
[Laughs] Bernd is a very challenging guy. He has a very clear vision and is very forceful. We’re going to give it a shot. I’m not saying it’s impossible. It’s very challenging, that is for sure. It’s a stretch goal we have inside. Would I promise and sign with my blood we are going to get there? No. But will we give the best we can to get there, for sure.
Will it come from existing brands, new brands you create or brands that you acquire?
We have a very strong portfolio of brands. We can get a lot of growth out of them. We have very clear strategies on how to grow fast. Globalizing some of the very strong brands we have that are not yet that international is clearly one opportunity. Getting bigger and more established in emerging countries is another strategy we’re working against. And the best way to grow is to get stronger where you’re strong already. That’s why we say, innovation, innovation, innovation, because that’s the way to continue getting market share where we are strong already. I would never mind if the U.S. is my fastest growing market. I would love to have it every year.
If doubling sales is the stretch goal, what is the realistic goal?
We are determined to grow faster than the market is. We’ve been growing at least twice as fast as the market for the last 10 years, and we want to keep doing that, which means gaining market share. This is a nonnegotiable commitment that I would be ready to sign with my blood. Rimmel is number eight currently in the U.S., with the goal of getting to the number-five spot. How are you going to gain market share? First, I’m persuaded we’ll gain a few ranking points when Wal-Mart is in the panel, because we know we are stronger there. But what we need to do in the U.S. to grow Rimmel is build awareness. Our advertising tests very well, so we need to make the brand visible. We’ve also started to have a model strategy that is better adapted to the U.S. We’re moving away from a pure London Chelsea look. It’s a mix of the right tone and vibe in our communication.
When will you move into the top five?
It’s tough. Number five is Sally Hansen, number four is Revlon, and then you have the big three. We want to get there in three years.
How do you see the mass market evolving overall and what opportunities excite you the most?
There is a lot of population that will increase frequency of usage, and will become more and more expert in this market. Mass will grow faster than prestige. Many countries of the world will push mass first in terms of growth.
Where do you see growth in fragrance?
Emerging markets. Latin America in general and Brazil in particular are clearly an opportunity. The Middle East, Africa, India are all markets where a lot of growth can happen. There is still a lot to gain in established markets. It is a lot to do with innovation and how the brands are expressed in store. In the U.S., many retailers still lock fragrances behind a glass. It is an emotional product. You need for consumers to try the product, hold it in their hands, to create a desire. Improving the shopping experience can lead to nice growth even in established markets.
Are retailers in the U.S. more willing to open up that department and experiment?
They’re not that willing. We’ve proven to certain partners that opening up yields a lot of benefits. It’s self-inflicted pain. I’m a retailer, I need to reduce shrinkage. What do I do? I lock everything. Well, if you empty the store, you’re going to have zero shrinkage. Is that a good idea? The reasoning on fragrance wasn’t that different. We’ve proven from a P & L perspective that opening up drives sales so much that you more than offset the increase in shrinkage.
You were at Sephora before Coty. What did you bring from the retail side to the brand side?
A better understanding of how retailers look at the shopper and the consumer. We’re both working for the same objective, which is satisfying the consumer. If you look at it in too restricted a way, it gives you limited visibility in what are the opportunities. I spent most of my life in the brand-building side. Sephora was mind opening. I came back to brand building with a broader perspective and a more open mind.
How would you describe your management style?
It is very much influenced by the fact that I do this work, at least 80 percent, because I have fun doing it. I want to have fun when I work and I want to work with teams in a way that I’m helping them more than judging them. I want to have a team spirit, a lively, very free exchange. I want everybody to express his opinion, because I believe that from differences you get value. I have a collaborative style. I try to be as open and available as possible, which is not always that easy. I can be demanding. I am quite demanding on myself, and I like to push and raise the bar. But again, in an informal, collaborative manner.
What drives you?
Fun, passion. This is a job that can be very boring if you take it as a process. It can be incredibly rewarding and fun if it is a bet, a creation, every day. There is nothing more than the passion of doing something that pushes you to do better and better.
What’s the hardest business decision you’ve made?
They are always those that involve people.
And the funnest?
My passion is creating and developing brands. So developing products and advertising and communication—that’s the fun part. It’s a bit like when you’re a gambler and you’re playing cards, the most excitement is when you take the biggest risk. Whenever we push a bit further, that is more exciting and more fun. When we started working on Sally Hansen Salon Effects, in the beginning we had some very nice colors, but then we said, “Why don’t we put animal prints and really push the [creative] element further.” We didn’t have a clue how people were going to react to these crazy designs. Salon Effects was a commercial success. But is it as fun if it doesn’t work? Yes, because you really feel that you’re doing something new. When you risk bigger, you can gain bigger, and Salon Effects was the biggest innovation in the makeup industry last year in the U.S.
What do you do for fun outside of work?
Family and sport. Soccer has been a big passion for me, and I played until two years ago when I broke my knee ligaments and my doctor said enough is enough. I was restricted more to tennis, and I still ski, although not as fast. Bernd Beetz is also an avid tennis player. We’ve had a lot of matches. I won for years, but he’s been catching up very fast, and now he’s winning more than I do. He’s a tough cookie, very competitive, very determined. I’m more of a fun player.
I want to keep doing this job forever if I can, if Bernd allows me, if I don’t win too much at tennis! I love what I do. The spirit, the atmosphere, the culture of this company is very unique. I really feel like we’re a startup. We are gambling every day. It is a fantastic thrill and the energy and passion here is unbelievable.
After graduating from the University of Rome with a degree in business administration, Renato Semerari began his career at Procter & Gamble, where he held a series of roles of increasing responsibility in the personal and household care sectors. In 1999, he joined LVMH Moët Hennessy Louis Vuitton as international marketing director of Parfums Christian Dior, and was named president and chief executive officer of Guerlain in 2002. In October 2007, LVMH appointed Semerari president and ceo of Sephora Europe, where he was responsible for growing its business in existing markets as well as new countries. He joined Coty as president of its Paris-based Beauty division in 2009.