L’Oréal Travel Retail: Firing on
all cylinders

‘Beauty for all travellers’. That is the mission that L’Oréal Travel Retail has set for itself for the future. It seems a simple goal, but reaching out to 1.4 billion tourists (Source: UNWTO International Arrivals 2018) is no easy feat.

However, the group is better placed to do this than most of its rivals thanks to an extensive 27-brand line-up [soon to be 29 with the addition of Azzaro and Mugler from Clarins]. Those brands straddle a wide price spectrum as well as key market segments.

“We are uniquely positioned,” L’Oréal Travel Retail Managing Director Vincent Boinay told his audience at the company’s annual press conference at the TFWA World Exhibition in Cannes earlier this month, traditionally one of the event highlights.

“We are changing the world in the way we do the business,” said Boinay. “The expression ‘pop-up’ started in the vocabulary of the industry about three or four years ago – before that, we had podium promotions. Pop-ups have really become a new way to engage – a way to be outside the stores and to communicate with customers around the world, especially the Chinese.”

In a market as definitely international as travel retail, there are inevitably some trouble spots. Boinay touched on the severe trading difficulties in Hong Kong thanks to the sustained protests there, and the struggles that some partners such as DFS have experienced. “But is [this situation] detrimental to global travel retail? The answer is no,” he said. “If the Chinese don’t go to Hong Kong, they will go elsewhere. And that’s the beauty of travel retail.”

There is no doubt that beauty is driving the growth of the channel and therefore playing a key role in the portfolio of retailers. This is why L’Oréal has continued to differentiate the beauty market and build out new segments.

In the Professional Products & Active Cosmetics Division, L’Oréal Travel Retail General Manager Piermarco Luzzatto-Giuliani outlined how the dermo-cosmetics segment was expanding in travel retail.

“By the end of 2019, we will have 90 shops carrying our two leading dermo-cosmetics brands – La Roche-Posay and Vichy – and we keep accelerating. It’s our biggest shop expansion ever and proves we are serving several unmet travelling consumers’ needs that drive incremental sales and average basket sizes.”

Key to the success of the store roll-out has been the distinctive pharmacy-styled retail environment used to communicate the efficacy and the safety of the products. Also important has been a strong pipeline of new lines such as Mineral 89 and Hyalu B5 Serum.

“Where we are pushing our boundaries further is by taking digital AI (artificial intelligence) into our counters,” said Luzzatto-Giuliani. “Through expert spot scans from La Roche-Posay, for example, you can get a dermatological recommendation for acne-prone skin and a full product routine in only 30 seconds.”

Another frontier is haircare, which L’Oréal Travel Retail is pushing via professional brand Kérastase. The campaign for the brand is fronted by model Emily Ratajkowski and is enjoying high double-digit sales across the world and very high double-digit sales in China.

“Kérastase is also being fuelled by breakthrough innovations such as the new Blond Absolu, the brand’s biggest and most successful launch ever,” said Luzzatto-Giuliani. For travel retail, Kérastase is expected to hit 50 travel retail doors by the end of 2019 with an acceleration in new openings this year in busy locations such as Moscow Sheremetyevo, Istanbul Airport, Palma de Mallorca and Beirut Airport “with more to come”.

The luxury segment remains core to L’Oréal’s travel retail performance. L’Oréal Travel Retail Luxe Deputy General Manager Aglaé de Beauregard said: “Travel retail and luxury brands are a long-term love story and all our brands are at full speed from lifestyle (Diesel, Cacharel, Ralph Lauren) to couture (Yves Saint Laurent, Armani and Viktor & Rolf). We are leading the growth in the market.”

This year could take L’Oréal Travel Retail even further thanks to two major projects that speak of empowerment independence and freedom: Idôle from Lancôme and YSL’s Libre, whose TV ad is fronted by singer Dua Lipa. “2019 will be a true milestone for us and there is something even bigger and stronger coming,” said de Beauregard, referring to the new male and female scents from Valentino (see panel). “We will bring Valentino Beauty to its fullest potential.”

At L’Oréal’s most price-accessible division – Consumer Products – the push is also relentless, but in a different direction as ‘entry’ opportunities are a target. L’Oréal Travel Retail General Manager Consumer Products Division Eric Vergès said: “Year after year, the conversion rate of duty free beauty remains stable or slightly declining in some regions. It means we have a class of travellers who are reticent to become shoppers.”

Vergès said that his portfolio offers a solution because brands such as the ubiquitous L’Oréal Paris, Maybelline, Nyx and Garnier can lure middle-class travellers “at very affordable prices”.

Vergès cited three L’Oréal Paris products that he sees as crucial in the recruitment of new shoppers and whose ranges are being extended. Youth Code now includes two travel retail exclusives – a red edition for Asia and the Middle East, and a jumbo size; while in the Revitalift anti-ageing franchise, an accessibly-priced anti-wrinkle serum has been added at US$30.

The third line is the popular Rouge Signature which is the number one liquid lipstick in China and number two in the European Union. To maintain that momentum, the Brilliant Signature collection is launching in 2020 with 15 shades.

Vergès concluded confidently: “In 2020, in strong partnership with retailers, L’Oréal Paris will strongly contribute to the development of the travel retail beauty market.”