Interview: Guilhem Souche on conducting Coty’s post-pandemic symphony

“Whenever there is a crisis, it’s time to reinvent.” So says Guilhem Souche who has stepped into his new role this September as Coty Senior Vice President Global Travel Retail & Managing Director China after a period of significant transformation for the beauty giant which is reinventing its powerhouse portfolio of brands with a multi-axis approach.

In the three years since its last showing at the TFWA World Exhibition in Cannes, Coty has invested heavily in developing its skincare portfolio and stepped up its 2-axes and high-end fragrance brand activity. The company has also widened the  offer of its established brands, such as Gucci and Burberry, to include makeup and skincare.

Guilhem Souche has inherited a travel retail business in increasingly robust health {Source: Coty Q1 2023 results; Click on image to expand}

As Coty drives this evolution, Souche says that partners are now discovering “a new company”. He uses a neat musical analogy to encapsulate Coty’s transformation. Whereas three years ago, Coty was only playing with a few piano notes, today it is playing a full symphony, he says.

At October’s TFWA show, Hannah Tan-Gillies caught up with Souche to talk about how he is leading Coty’s approach in the post-pandemic travel retail world. He also discusses the biggest trends that will shape the beauty category in years to come.

How are you settling into your new role at Coty?

While I’m new to this job scope, I’ve been in the beauty industry since 1995. I spent 18 years in L’Oréal, seven in LVMH and three in Coty. I’ve worked in three continents from the domestic markets in Europe and America and spent 12 years of my career in China. This experience gives me an international vision and I’m very excited to use this insight as I enter the travel retail channel.

Travel retail stood out across all regions in Coty’s Q1 2023 results published earlier this month {Source: Coty: Click on image to expand}

I think it’s a good time to enter the travel retail industry. It’s a business that has been transforming from the inside out. The whole industry went through a hard time but now we are all working towards pre-pandemic levels. Whenever there is a crisis, it’s time to reinvent. I had a very positive mindset coming into Cannes, and I’m discussing new ideas with key players to reinvent the business in a relevant way.

The Moodie Davitt Report Brands Editor & Digital Marketing Manager Hannah Tan-Gillies caught up with Coty Senior Vice President Global Travel Retail & Managing Director China Guilhem Souche during Coty’s first Cannes showing in three years

What is it like returning to Cannes after a long absence? What has the reception been like?

We’re back in Cannes after three years and we’re very happy to reconnect with a view on growth. As far as Coty is concerned, our partners are discovering a new company. A few years ago, we were playing with just a few notes, but now we’re playing a symphony with plenty of new notes. We have a renewed focus on fragrances, with a special focus on exclusive collections . We have several powerful fragrance collections , such as Gucci The Alchemist Garden and Chloé Atelier de Fleurs, which didn’t exist two years ago, as well as Boss Collection.

Fragrances, Coty’s traditional heartland, continue to prosper for the group {Source: Coty Q1 2023 results; Click on image to expand}

On top of that, our brands are going from mono-axis brands to multi-axis brands with fragrance brands expanding to makeup and skincare. Makeup, fragrance and skincare are widening our Coty offer, with Gucci and Burberry showing huge potential for growth. Our customers buy into our love brands and want the complete routine. By transitioning to a multi-axis brand strategy, we are answering to their needs.

(Above and below) Kylie Cosmetics, the beauty brand launched by Kylie Jenner, entered travel retail in the Americas in partnership with Dufry at São Paulo Guarulhos Airport and with Duty Free Americas at Miami International Airport
Click here to read our full story

We also have makeup brands that are attractive to Gen Z consumers. We had a huge event for Kylie Cosmetics in Americas travel retail. This brand  has an incredible direct-to-consumer network which helped propel our launch in travel retail.

Makeup momentum: Note the healthy focus on the prestige sector and the growing success of Kylie, in which Coty acquired a 51% interest for US$600 million in late 2019 {Source: Coty Q1 2023 results; Click on image to expand}

We’re also bringing significant investment to developing our skincare offer. We now have several brands with skincare in our portfolio . For example, Lancaster is being revamped as a skincare brand. We have an  ultra-premium skincare range to be launched soon, Orveda, as well as Philosophy and Kylie Skin.

Travel retail (i.e. Hainan offshore duty free) again came in for honourable mention during Coty’s Q1 2023 results presentation {Click on image to expand}
(Above and below) The magnificent cdf Haikou International Duty Free Shopping Complex in Hainan opened to the world on 28 October. Click here for our full report.

During the pandemic Coty has placed a particular focus on China – most recently launching the Around the World and Chloé activations in GDF Plaza and participating in the Hainan Expo. Do you see this China focus stepping up in the future?

China is a  strategic focus that is quite recent for us, and there’s a lot of room to grow. We are bringing new brands to that key market because consumers  love novelty in China.

China is a key target for Coty both in the local market and travel retail {Source: Coty Q1 2023 results; Click on image to expand}

Hainan is set to become a free trade port and all the Chinese will continue to travel there. Lockdowns may be difficult, but people are travelling again. Hainan is a special place to showcase our brands from different angles, from mono-brand to multi-brand.

When you go to Hainan and see the CDF Mall in Haitang Bay or the newly opened cdf Haikou International Duty Free  Shopping Complex, you can easily see why it’s a great place to showcase our multi-axis brands. If you can make an impact in Hainan, you can make an impact in the whole of China.

(Above and below) Travel and fragrance discovery were the concepts behind Coty’s ‘Around the World’ multi-brand pop-up at GDF Plaza

Coty recently partnered with Ant group to deploy Alipay+ in travel retail. Tell us more.

Our partnership with Ant Group enables us to have a very in-depth knowledge of Chinese customers. China is very big, and you need to understand the Chinese consumer in order to offer a seamless offline and online experience. China is also very advanced in  digital, which is where our partnership with Ant Group comes in.

In what ways has Coty adapted to the post-pandemic retail landscape?

We’ve explored more fields of action, making us less dependent on one category. We know that fragrances, lipsticks and skincare create different emotional reactions with customers. During the pandemic, fragrances boomed. By developing our skincare offer, we are much more protected from a crisis that would heavily impact only one category.

We’ve also ramped up our digitalisation and sustainability efforts. We’re focused on understanding the customer and giving them the best shopping experience possible. All this has enabled us to transform the company faster than if it were business as usual.

Coty made its debut at the Hainan Expo in Haikou this year with an expansive and experiential presence
Another perspective on Coty’s ‘Around the World’ multi-brand pop-up with GDF Plaza in Mova Mall, Haikou

Big, experiential beauty pop-ups and animations have become an integral part of the travel retail landscape. What role do you think activations like this play in driving both sales and visibility?

We are lucky to be working in an industry where you can build  sales and image  from huge traffic. There are a lot of advantages to this channel. If you offer a memorable experience to travellers, you can build the image of the brand.

A memorable experience goes further than just media. You can connect better with customers and enable travellers to discover the brand in an engaging way. Our ‘Around the World’ multibrand pop-up in Hainan encouraged shoppers to discover certain brands they haven’t been introduced to yet. We’re recruiting across categories in this channel. Fragrance is booming, but our job is to bring new customers to the category.

The US beauty group has made rapid strides in its ESG commitments {Source: Coty Q1 2023 results; Click on image to expand}

Niche fragrances are rapid growth in travel retail. How do you see your brand and category mix evolving to adapt to changing consumer demands in the post-pandemic world?

Niche fragrances and high-end, exclusive, collections are undergoing a powerful resurgence and we have the great opportunity to  offer them. Thanks to Gucci The Alchemist Garden, Burberry Signature and Boss Collection lines, we’ve experienced significant growth in fragrances. High-end collections are transforming our stores.

The spaces we dedicate to these lines are getting bigger and bigger and they are often supported with  retailtainment. This  could be engraving, personalisation, storytelling, retail theatre and many others. Chloé, for example, is  promoting Chloe Atelier des Fleurs  collection and is doing well. I believe  high-end fragrances will continue to be strong growth drivers for Coty.

Gucci’s offer is widening to include more makeup products

How close is Coty to reaching 2019 sales levels?

The industry is coming back  to 2019 levels, despite passenger traffic being down 10%-30% compared to FY19. Coty has been out-performing the industry, in the three regions where we are present, Europe, Asia and North America. This is because we have expanded our offering to 3 categories (fragrances, cosmetics and skincare) vs. just fragrances pre pandemic. In Q1 FY23 we were able to grow our revenues in all regions fueled by significant Travel Retail momentum and double-digit growth across most markets. We are launching new categories, expanding distribution for Gucci and Burberry makeup and expanding our network. We simplified our distribution  and had a lot of dialogue with our partners and we’re working closely together to see how we can take our partnerships further.

One closing message for the travel retail industry?

Travel retail is an extremely important channel to us. We want to bring additional growth to this channel and attract new customers.  We will achieve that through our excellent products, excellent experiences, service and innovation.

 

Food & Beverage The Magazine eZine