L’Oréal, the biggest beauty player in the duty free and travel retail market, has outlined its plans for further growth in its just-published annual report for 2018.
The French company recently announced its best sales growth in a decade, to reach €26.9 billion. L’Oréal Travel Retail – led by Managing Director Vincent Boinay – blazed its own trail with soaring growth of 27.1% to break €2 billion in sales for the ‘sixth continent’.
Boinay said in the report: “As the travel retail market leader, L’Oréal is taking full advantage of the increase in air traffic [up 6.7% in 2018 according to Air4casts data] through its portfolio of complementary brands… as well as its close ties with distributors and its teams on the ground. The group’s brands continue to do particularly well with Asian consumers all over the world.”
To capitalise on its dominant position and to maintain momentum for the whole beauty category, the L’Oréal Travel Retail division has earmarked crucial areas for development. It stated: “The channel will continue to expand its digital presence to meet the demands of today’s ultra-connected consumers. L’Oréal Travel Retail is providing personalised offers – both online and offline throughout the traveller’s journey, as well as before and after.”
L’Oréal has, most notably, rolled out activation campaigns to attract travellers into shops. Among them have been the Shu Uemura Shu Kiss initiative in Seoul, in partnership with Lotte; and the Ralph Lauren Father’s Day campaign in Brazil, in cooperation with Dufry.
MOODIE DAVITT SNAPSHOT: L’ORÉAL IN NUMBERS
25 – the brands L’Oréal has in the travel retail channel across three major zones: Asia Pacific, Europe & Middle East, and the Americas.
30 – the number of Kérastase points of sale in travel retail (as at end 2018).
12% – the share of L’Oréal Travel Retail sales now coming from e-commerce.
100% – the CO2 emissions from L’Oréal Travel Retail employee trips in 2018 that were offset by agro-forestry, reforestation and environmental conservation projects.
100% – the amount of certified FSC and PEFC cardboard used for products sold only in airports.
90% – the amount of reused or recycled materials and furniture used during the Tax Free World Exhibition 2018 in Cannes.
Wider travel retail
37% – beauty’s share of total travel retail sales (source: Generation Research 2017).
55% – the share of all travel retail sales made in airports. The rest are accounted for by downtown duty free shops, as well as sales aboard aircraft and cruise ships (source: Air4casts 2018).
Source: The Moodie Davitt Report
The Father’s Day activation has been shortlisted in the Best Tactical Advertising Campaign category in The Moodies travel retail digital & social media awards.
Sustainability has become a driver
L’Oréal Group has built on its sustainable development initiatives over the years through its ‘Sharing Beauty With All’ programme. In line with the group’s environmental focus, L’Oréal Travel Retail has also made sustainability a priority.
L’Oréal Travel Retail said: “By ensuring the sustainable manufacture of products sold exclusively in airports, offsetting the carbon footprint generated by employee travel and recycling and reusing merchandising equipment, L’Oréal aims to make performance meaningful and become a leading player in this vital transformation of the travel retail channel.”
With 25 brands available to retail operators in duty free and travel retail, L’Oréal claims it has the portfolio and agility needed to meet the expectations of new travelling consumers – especially in emerging markets.
“Thanks to the trust-based relationships developed with distributors over the past 40 years, the group is able to maximise the potential of its brands in airports around the globe,” said L’Oréal.
To exemplify its flexibility, the company has pointed to some of its activities that have helped push the travel retail division over the €2 billion threshold in 2018.
– L’Oréal Paris is attracting more and more Asian consumers with affordable premium products, particularly in duty free downtown shops in locations like Bangkok. The brand also rolled out a first-ever global travel retail campaign for Color Riche Shine across some of the biggest international airports like Paris and Singapore.
– Vichy showcased its star product, Minéral 89, through large-scale media advertising in major Asian airports. The brand is now present in 60 travel retail ‘dermacenters’ alongside other brands from L’Oréal’s Active Cosmetics division.
– Luxury brands in the portfolio such as Lancôme – with its star product Génifique – Yves Saint Laurent and Kiehl’s “continue to put their best foot forward in exceptional spaces”. The Armani Box pop-up store continues its round-the-world tour of airports and downtown duty free shops “recruiting new consumers – particularly Millennials – for the beauty brand thanks to its distinctive identity and design”. Millennials, via social networks, are helping events to go viral.
– Upcoming brands are paving the way to the future. In 2018, men’s grooming brand House 99 was launched, while Atelier Cologne opened pop-up stores in Paris and Los Angeles.