L’Oréal has long been a pioneer in the travel-retail channel, where the group’s business had grown so large by last year that if the channel were a country, sales-wise it had become the third largest for the company, following the U.S. and China.
L’Oréal travel retail posted gains of 25.3 percent in 2019, and was on a strong growth trajectory in early 2020. Then the coronavirus pandemic struck.
Vincent Boinay, L’Oréal general manager for travel retail worldwide, spoke with Beauty Inc about navigating uncharted waters and planning for the future.
How do you see travel retail recovering from the pandemic?
V.B.: Slowly but surely. We have an unprecedented crisis in travel retail, and international traffic has not yet recovered. Only half the world has progressively lifted the travel restrictions. But at the same time, we have to look at it long term, and the fundamentals of this industry…are remaining extremely solid.
The big question that everybody asks is when is this pandemic going to be over, and when [borders] are going to reopen.
What have been some key strategies regarding retailers during this period?
V.B.: L’Oréal has been very solid on three key values. Proximity: We have kept the communication very regularly to acknowledge the difficulties and to also decide quickly what we will [do].
The second is a value that L’Oréal — and it’s beyond travel retail — has been adamant to keep, this solidarity with our retail partners. It’s related to the first point. We have been discussing, talking, acknowledging the difficulties and the scenario-planning together to be in solidarity in order to bounce back as soon as possible.
The third one is agility. This is a Darwinian period. We need to adapt, evolve, change. And for that we kept a strong link and a strong relationship with our retail partners.
L’Oréal Travel Retail Americas Group teamed with Marshall Retail Group to open a new beauty travel-retail concept at LaGuardia Terminal B in New York. Why now?
V.B.: [L’Oréal] never stopped despite the crisis, and that’s why we kept innovating with new products. My Way is a new launch from Armani. As we speak we are launching Voce Viva from Valentino, and we made it highly visible with Dubai Duty Free, for instance. We have also developed new hand-cream duos with La Roche-Posay and by Biotherm, a hand sanitizer and hand cream, for our travelers around the world.
We had a project with LaGuardia that had started more than a year ago. We are extremely proud to see what LaGuardia is becoming, to keep developing this beauty hub and to have a new concept with more technology in a store to excite and delight American passengers.
We keep innovating. Especially in a time of crisis…this is what makes a difference. It’s also what we did, by the way, with many retailers around the world.
When travel-retail shops shut down, did some of the business migrate online and to downtown shops?
V.B.: As far as travel retail is concerned, indeed, we have seen a rise in the downtown shops — the epitome is probably Hainan Duty Free.
What is interesting, when we look at it from a more global L’Oréal point of view, e-commerce, direct-to-consumer, brand sites or digital at large is on the rise everywhere, in every country. It’s extremely important for us to keep that in mind because for travel retail we have to acknowledge and realize that tomorrow the customer, the traveler, will have probably a different behavior. Will it be even more online than before?
That’s why data tech is extremely important in the future of travel retail. Because, let’s face it, if tomorrow we have less traffic we need to have more penetration in stores. To do that, there are not that many recipes. We need to work on targeting the right way: The passengers that are going to come into the airport. For that we need to leverage the data and walk hand-in-hand with airports, airlines, retailers to change the paradigm of penetration in stores.
Could beauty lose its pole position in travel retail once the pandemic subsides?
V.B.: It will not change, but our responsibility is to make sure that the appetite for beauty is greater than ever, and it’s even stronger than before.
For that [are] a few recipes. The first one is innovation. Consumers are expecting innovation. The second topic for me is really data. They need to know what offers, what experience they can live when they shop at the airport. When we interview people they very often say: “Oh, I didn’t know that that brand was available here at the airport.” We have to keep that in mind.
The third one is related to tech. We have to deliver in a world of most likely contactless experiences between customers, shops and beauty assistants. We need to reinvent the way we do things. As you probably know, we have already started with ModiFace virtual try-on, virtual makeup, QR codes instead of testers, etcetera. It’s extremely important.
If we do that, it’s to make our beauty assistant [into an] augmented beauty assistant. It’s not to replace a beauty assistant. In our industry today there is a kind of misunderstanding between tech and sales staff. Tech is a way to enhance the quality of service that the staff is providing.
How else is L’Oréal readying for the new normal once travel picks up?
V.B.: We are preparing for tomorrow first with a portfolio of brands and our mission: Beauty for all travelers. Beauty for all cultures. Beauty for all beauty routines. Beauty for all types of purchasing power. It’s more meaningful than ever, and we [will] get even stronger tomorrow than we are today.
So first is innovation and portfolio. The second one is data and tech. That is going to be the big transformation. The group has started already, and travel retail is part of this crusade. And last, it is all related to sustainability, inclusion, diversity.
We are just going to accelerate these fundamentals and values.
How have you maintained your team’s morale?
V.B.: We tried our best. First, communication. It was very important from the beginning to acknowledge the reality and not to try to deny any difficulty. Second, we have the chance to be…supported by the number-one beauty group in the world, and that makes a difference. Third, to keep the morale of the team, is to make sure that from the very first day that health and safety was a priority. It was at group level, but also in every subsidiary, including travel retail.
And last, it’s also to show determination, because we are going to bounce back. We know that it will take time, but we need to get ready.
I am very proud of the teams all around the world. [They] have kept a great morale, despite the difficulty everywhere. [Their] commitment is absolutely incredible.