TRcase Study

8/10/2019 TRcase Study

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BRANDSTORM 2 15

BACKGROUND

I- LOREAL TRAVEL RETAIL, THE 6TH CONTINENT

The Travel Retail channelLOral considers Travel Retail market as a 6

thcontinent, as large as a real continent.

A continent with: its own borderless territory (airports, flights, downtown shops, cruises) its own capitals (top airports like Dubai, London, Hong Kong, Paris, Singapore, Bangkok or

Istanbul) its own economy (duty free shops) its own flow of inhabitants (2000 flights taking off / minute in 2013)

its own population (2.5 billion international air travelers in 2013)

Travel Retail means the business undertaken in all the shops located in duty free areas or any areasdedicated to travellers: airports, downtown duty free shops, airlines, cruises.The Travel Retail is a booming market which attracts every year 50 million additional inhabitants,global travellers, the Global Shoppers, driven by new emerging nationalities: Chinese, Brazilians,Russians or NigeriansThe main driver of this market is therefore passenger traffic, particularly air traffic. And air traffic iscontinuously growing, by 5% on average per year, and represents over 6 billion international flights in2013. The Travel Retail market therefore fully benefits from the traffic growth. It has already grownfaster than the traffic over the last 10 years and this market is expected to double in the 10 forthcoming

years, thanks in particular to the settlements of new big shopping malls in airports.

LOral, thehistorical leaderThe beauty segment is historically the leading category of this channel, accounting for 30% of totalturnover (source: Generation). And it continues to experience strong growth: the estimated figure for2013 is +7.4% (source: LOralestimation).L'Oral is the historical leader in the Beauty category of the Travel Retail market, with over 20%market share (source: Generation).In addition to turnover, Travel Retail is a strategic channel for the development and the visibility of our

brands, and in the conquest of the new billion consumers, targeted by LOreals CEO, Jean-Paul Agon.

For many travellers, Travel Retail is the very first opportunity to discover the brands and unique beauty

experiences.

The Global ShopperThe Travel Retail consumers are Global Shoppers: they do not only shop where they live... they shopwherever they are, in their local markets, when travelling and also in the markets of their destination.The in-depth analysis of these "nationality corridors" across the world has allowed L'Oral to develop atailor made approach, a personalized approach to better engage these Global Shoppers, whereverthey are: services and products adapted to their beauty rituals, with sales person speaking theirlanguage, etc.

Besides, the Travel Retail market is experiencing a new phenomenon: the democratization of

travelling. In all emerging countries, the middle class is keen to travel outside its country, bringing eachyear a new wave of travellers, of shoppers in Duty Free shops.


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Thanks to the notoriety and diversity of its unique portfolio of brands, from Luxury (Lancme, GiorgioArmani, Yves Saint Laurent, Kiehls, Biotherm, Urban Decay, Ralph Lauren, Shu Uemura, Cacharel,Helena Rubinstein, Diesel, Clarisonic, Viktor & Rolf, Maison Martin Margiela) to Mass-Market (LOralParis, Essie), from dermo-cosmetics (Vichy, La Roche-Posay, Roger&Gallet) to hair care products(Krastase), without forgetting The Body Shop Brand, L'Oral is ideally positioned to offer travellersfrom all over the world all the products they want, whatever their beauty rituals or their purchasingpower.

II- LANCME BRAND

Lancme Brands valuesFounded in 1935 by Armand Petitjean, visionary and lover of French elegance and women, Lancme

immediately performed in selling perfume, beauty care and make-up to an international clientele.

Today more than ever, ultra-femininity, French excellence,joie-de-vivre, happiness and beauty are at

the very heart of Lancmes DNA. A spirit that asserts itself through one ambition which is that every

woman who comes to Lancme to be more beautiful leaves happier. Because Lancme affirms that

happiness is the most attractive form of beauty.

During its almost 80 years of success, Lancme has become the # 1 brand in the women selectivecosmetics market by offering unique and complementary skin care, make-up and perfume in morethan 130 countries with 20,000 beauty advisers in as many points of sale relaying a message ofFrench excellence.

The luxury cosmetics house is represented by inspired - and inspiring - ambassadresses (JuliaRoberts, Kate Winslet, Penlope Cruz, Lupita Nyongo, Lily Collins and Daria Werbowy). Chosen fortheir beauty, all are charismatic and fully accomplished women. They are also chosen for theirintelligence and for their views on the world around them. They are icons who love life, who are full ofenergy and talented; icons every woman can relate to. They embody a radiant, confident and universalbeauty.

Lancme is a pioneering brand and visionary ahead of its time. A brand which keeps writing the futureof cosmetics with great innovations and with iconic products such as Trsor, La vie est belle, LAbsoluRouge, Hypnse mascara, Teint Idole, Advanced Gnifique, Visionnaire, Absolu LExtrait, etc.Lancme successfully combines scientific expertise and an intuitive understanding of women's needsto offer every one of them the possibility to enhance their beauty and femininity, whatever their ageand whatever their skin color.

Lancme in Travel RetailLancme offers its unique vision of beauty and femininity to all the travellers of the world andespecially Global Shoppers. Some of the top worldwide Lancme shops are already in Travel Retail

channel, as Lancme answered with its fantastic portfolio of products to travellers aspirations forfragrances, make-up and skincare.

Lancmes mission is to introduce women of the world to top age skincare products, innovative and

desirable make-up as well as emotional fragrances. Lancme, in Travel Retail, has always the same

purpose that is to say to spread all over the world French ultra-femininity, effortless chic and

happiness.


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BRANDSTORM 2015 CASE

PRE-CASE STUDY

I- THE TRAVEL RETAIL MARKET

1. Define the marketStudy whats out there for travellers in terms of beauty products, services and retail experience inTravel Retail. What is the current market situation? What are the current trends and the vision for thefuture? Imagine what the aeromalls and airports in the future (in 10 years) will look like. What are thegrowth opportunities and threats?

2. Identify the competitionWho are the main competitors? Define their positioning and targets.

3. Understand the consumer & identify the consumers trendsWho are the consumers who buy beauty products in airports? What are their habits (frequency,preferences, rituals)? What are their expectations? Define the main trends for this type of consumers.How to recruit them, how to loyalize them?

4. Feel the retail experienceWhat are the specificities of this channel retail experience? Identify how the context of travelling canimpact the retail experience, especially in the airports. In a Global shopper perspective, what aspectsof retail experience can be improved in Travel Retail?

II- LANCME BRAND IN THE TRAVEL RETAIL CHANNEL

Based on what you have just found out, do a SWOT analysis of the Lancme brand in Travel Retailchannel. Find out where the opportunities for Lancme would be in Travel Retail by analyzing:

Business performance

Market share and ranking

Positioning and image

Consumers

Digital strategy Retail experience in the existing points of sales

Merchandising


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CASE STUDY

Now that you have completed a full analysis on Lancme in Travel Retail, take action and answer thefollowing:

1. Describe the current retail experience strategy of Lancme in Travel Retail.

2. Imagine whats new to implement inthe retail experience in LancmesTravel Retail shops.More precisely, what would you do in terms of :

Retail design: architecture of the shop, the way the 3 axes are expressed Retail animation : specific areas negotiated with retailers (such as podium) for temporary

period

Retail education: Beauty Advisors training(sales force), selling scenario, global services

Nota: Your strategy should be focused on the development of a new retail experience for

Lancme in Travel Retail, being consumer-centric.

The aim is to increase sales in Travel Retail shops but also to increase recruitment oftravellers to the brand Lancme and to loyalize them with Lancme in returning home,thanks to a unique and unforgettable retail experience.

Focus on Travel Retail channel specificities to elaborate this Lancme retail experience. Keep the same number of points of sales but imagine also how to enhance the retail

experience in these points of sales.

3. Define a new digital communication campaign(launch + next two years) for the travellers, duringtheir journey and out of the shops (before their flight, arriving at the airport, waiting for their flight), toaggressively expand Lancmes share in the Travel Retail channel.

Nota: The travellers are Global Shoppers: internet addicts, fully equipped during their trip, carrying

their devices all the time.

Your strategy must consider the following:

Your strategy will be developed with the aim of recruiting new customers in Travel Retailchannel and for local markets.

Your retail experience must be in line with Lancme Brand values and LOral Travel Retail

positioning. Keep in mind the Global Shopper retail experience approach.

Keep in mind the airport authorities constraints and the retailers requirements. Travel retailchannel is a trinity partnership between airports, retailers and brands.

You have no constraint in terms of budget and profitability but you must stay realistic!

Documents

TRcase Study