L’OREAL TO WALK A PREMIUM PATH
Byline: Laura Klepacki
NEW YORK — The new president of L’Oreal Paris has an eye for luxury.
Carol Hamilton’s future vision for the multi-category beauty brand she now oversees is that it bring a higher aesthetic to mass-market beauty. Whether it be through technological innovation, packaging, in-store environment or even the way the company manages the backroom, she wants L’Oreal to set a new and distinct standard.
“We feel that we really want to be even more of a luxury brand that happens to be found at mass,” said Hamilton, in her first interview with WWD since being named president of L’Oreal Paris Brand Division in January. L’Oreal Paris includes the L’Oreal brand’s hair care, skin care, hair color and cosmetics business. Hamilton was previously senior vice president and general manager. Former president Joseph Campinell has been elevated to president of the L’Oreal Consumer Products Group, with oversight of L’Oreal Paris, Maybelline/Garnier and Carson/Soft Sheen.
“By luxury, it is different from department store luxury in the sense that we have to bring self-service codes that help consumers understand and shop our products in a way that is right for that environment,” explained Hamilton. “We are not trying to be something that we can’t be, but invent a new code of luxury that is available at mass and drives market growth by bringing new technology that is really right for a luxury brand.”
Hamilton said that will be seen “across all of our categories and across our merchandising and the way we want to approach the retailer as well. For really, in our code of being premium, we want to be the best in our class at logistics, inventory control and the things that obviously are important in defining what a new modern company is all about.”
And Hamilton hopes the approach will translate into higher sales this year. While she anticipates the total mass beauty market will expand about 5 percent, she wants to see L’Oreal’s sales increase by at least double that — to around 10 percent.
Currently, the brand’s year on year retail sales are up 5 percent, according to Information Resources Inc., to about $1.1 billion for the 12 months ended March 24, 2002. [These figures do not include sales at Wal-Mart, which can account for between 25 percent to 30 percent of sales.] But L’Oreal has been picking up momentum in the first quarter. “We are actually trending at plus 10 percent in our sell-through numbers after the first two months, so that is very encouraging,” noted Michael Tanguy, L’Oreal’s senior vice president of marketing. “We have very ambitious growth plans across all of the businesses, with the introduction of new technologies. The commonness is to upgrade, and to be obsessed with that, so that we can drive category growth in a tangible way.”
There are a host of new products in the first half that are expected to bolster the brand, such as Lash Architect, a lash-building mascara; Endless Wear longwearing lip color, designed to provide a comfortable feel and last for eight hours; and Glass Shine, a high-shine lip gloss in a metal tube. There is also Visible Results Skin Renewing Moisture Treatment — an anti-aging cream, which targets thirtysomething women — and Age Perfect Hand anti-age hand cream, L’Oreal’s first body product.
For youngsters, L’Oreal continues to build its Kids line with its new Fast Dry shampoo in Cool Melon and Pineapple Flash scents. The formula is designed to reduce the amount of water absorbed by the hair shaft. And under the Vive umbrella, there is the Fresh Vive collection targeting frequent shampooers. Offerings include a shampoo, conditioner and shampoo and conditioner in a citrus fragrance.
Other news is slated for the second half including the launch of Pure Zone, a cleansing regimen for young women, which L’Oreal expects to be a major hit. [See story on this page.]
“I really think the consumer is ready to shop,” said Hamilton. “From the L’Oreal standpoint we think we have a strong arsenal of new products, and that is such a driver of the beauty business.”
And despite the emphasis on premium positioning, prices will remain status quo, according to Tanguy.
Efforts to sharpen L’Oreal’s retail positioning already got under way while Hamilton was number two at the brand. “This has been a natural evolution [for L’Oreal] to elevate itself to a more premium position than before,” commented Hamilton.
Improvements have already included a new cosmetics fixture, dubbed the “great white wall,” which entered stores last year. In addition to rounded shelving, the display uses backlighting as well as overhead lamps with prism-like glass to achieve a softer look. “The intent is to bring a specialty boutique feel into drugstores and mass-volume retailers,” said Hamilton at the time of the rollout. Additionally, color cosmetic packaging has been upgraded with gold-toned componentry.
“Consumers have so many choices in buying beauty products today,” said David Waldock, senior vice president of sales for L’Oreal. “They don’t choose just one beauty channel. It is not just mass versus prestige. A manufacturer like L’Oreal needs to work on retail development and not have her migrate to other retail locations.” Waldock believes the new displays “absolutely” improved L’Oreal’s store image. “It is a better expression of the brand.” While there were a lot of “wows” initially, Waldock expects the improved wall will continue to add value to the brand over time because of its educational features and the improved product presentation.
Last year, CVS replaced Ultima II with L’Oreal as its image brand. And while Wal-Mart has been going forward with its own universal cosmetics fixture, in some stores it has added elements of the L’Oreal look such as the overhead lights.
Otherwise for retailers, L’Oreal is now offering up to eight different cosmetics planograms to better meet neighborhood needs. And since the brand operates in numerous beauty categories, it is working harder to promote cross-shopping to increase the total market basket.
In the shipping department, for the first time L’Oreal is bundling items in twos, rather than the industry standard of threes which can help eliminate excess inventory of unpopular shades. Prepacks also now contain a greater number of the more popular shades and fewer of the less popular shades to improve sell through. Before there was an equal number of each shade.
“Retailers told us that to increase space, you need to become more productive,” said Hamilton, “So we focused on productivity, rather than just share gain.” Still, in making any changes, stressed Hamilton, L’Oreal’s focus will always center on the consumer.