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Insight Information in Category Management Co-operation
Xavier FILOU General Manager of Corporate Trade Relations L’OREAL
Copresident ECR France
2009 Key Figures
World’s number 1 cosmetics group
23 international brands(1)
130countries
67,500employees
17.5 billion euros of sales in 2008
patents registered in 2008674
(1) Brands with annual sales of more than 50 million euros.
Hair salons Mass market Selective Pharmacies
Present in 4 key distribution channels
A Pure Player in Beauty
Excluding soap, toothpaste and razors. Provisional estimates for 2008. Source: L’Oréal estimates
20081993 1994 1996 1997 1998 1999 2000 2001 200320021995 2004 20062005 2007
+5.5%
+3.0%
A resilient cosmetics market… Annual growth rate of + 4.5 % over the last 15 years
(1993 – 2008* - Annual growth rate)
World’s number 1 cosmetics group
L’Oréal
Procter & Gamble *
Unilever *
Estée Lauder
Avon
Beiersdorf
Shiseido *
Johnson& Johnson *
Kao Corp.*
Chanel *
0
5
10
15
20
25
30
Sal
es i
n b
illi
on
US
do
llar
s
25,81
19,8
15,55
7,84 7,6 7,03 6,49 5,8 5,564,43
* estimates
WWD Beauty Biz Ranking Sept. 2009
2008 Sales
« Beauty’s Top 100 »
in US $
L’Oréal market share* 2000–2008Based on estimates of the worldwide cosmetics market updated in 2007
14.3%
15.2%15.8%**
13.8%
* Excluding soap, toothpaste and razors. Source: L’Oréal estimates.** 2008 with YSL Beauté over a full year
Constantly improving its worldwide positions
2000
11.0%11.7%
13.6%
12.4%13.2%
2001 2002 2003 2004 2005 2006 2007 2008
MIZANI
A unique portfolio of strong and complementary brands
LuxuryProducts
ActiveCosmetics
The Body Shop
ConsumerProducts
ProfessionalProducts
1.2 billion
X 2
2.5 billion
Our ambition: double our consumer base
Accelerated urbanisation: … 60% of the population will be city-dwellers in 2020
X 2
> 60 years< 25 years
€ 87.3
€ 25.1
Average skin care expenses per consumer in France, by age
Source: TNS Worldpanel France - 2008
Women over 60 years old spend twice as much on facial skincare as women under 25 years old
Cosmetics’ usage, by age and by category European Health & Beauty Survey – Men - 2007 - IPSOS
Men: the potential of the new generation
* H&B Survey - 2005
CleansingProducts users (%)
Moisturizingday cream users (%)
20 – 29 years old
50-59years old
15 %
23 %
17 %
30 %
20 – 29 years old
50-59years old
Accessible innovation
Opening up new categories
1
2
3
4
5
Accelerating globalisation
Reducing costs and streamlining organisational structures
Strengthening business drivers
Increasing
our
consumer
base
5 strategic thrusts
Breakthrough innovations at the heart of each market14
Breakthrough innovations at the heart of each market15
Breakthrough innovations at the heart of each market16
Category Management at L’OREAL today
The explanatory factors of the Category Management birth
Markets complexity– New products, growing segmentation
Necessity to develop markets, then growth, and to optimize assortment
Evolution of purchasing behaviors– A more and more informed, volatil, fickle , and clever purchaser. – Planned, timely, immediate, conditionned, identified purchases...
Necessity to fit to trends consumption System of information explosion
– Scanning, panels, loyalty card… New information to use
Today, Category Management is a tool of differenciation, in full transformation.
It is a strategic function of General Management
N°1 worldwide, we are bearer of responsabilities vis-à-vis consumers and retailers
L’action opérationnelle et ciblée :
- Coordonner les chantiers trans-Affaires et les actions spécifiques enseignes (op événementielles, Club Beauté, ECR…)
La stratégie catégorielle :
- Identifier les leviers de croissance par catégorie et par enseigne (Revues de marché et de performance)
- Influencer le distributeur dans la construction de sa stratégie catégorielle (assortiment, merchandising, valorisation…)
- Coordonner les projets, assurer le suivi, la mesure des résultats et la mise en place d’éventuelles actions correctives
L’expertise Hygiène Beauté :
- Définir et exprimer la vision stratégique de L’Oréal sur l’HB
- Anticiper les évolutions de marchés, les mutations de la distribution et les initiatives des concurrents
- Développer des partenariats sur le rayon HB avec nos clients
Visionglobale
Stratégieciblée
Actionspécifique
Category Management Scope of ActionsCategory Management Scope of ActionsThe Hygiene-Beauty Expertise:-To define and express the strategic vision of L’OREAL on HB-To anticipate market evolutions, distribution changes and competitor’s initiatives-To develop partnerships on HB department with our customers
The category strategy:-To identify the growth driver by category and by banner (market and performance review)-To influate the retailer in the building of his category strategy (assortment, merchandising, valorisation...)-To coordonate projects, to ensure the follow-up, the measure of the results and the implementation of possible corrective actions.
The operational and focus action:-To coordonate the « trans-affaires » projects and the specific actions for the retailers (special events, Club Beauté, ECR,... )
L’Oréal’s mission To understand the shopper ( Study market background
Hygiene-Beauty Men and Women) : – Perception of hygiene-beauty today– Expectations to anticipate consumption changes
To understand the categories
The contribution of brands and innovations
To understand the shopperMain teachings of the study shared with retailers
(1/3)
The consumer’s perception:– HYGIENE-BEAUTY: avoid naming
=> The BEAUTY contains henceforth the whole offer
– The consumer lives the Beauty experience as a pleasure of recentring on himself. => SELF CARE caracterises the values associated to this universe
– Today and in an-ill assorted way, the department does not reflect the evolution towards dream, sensorality and the pleasure conveyed by the products and brands’ communications.
Source : Etude Fond de marché L’Oréal 2006
To understand the shopper Main teachings of the study shared with retailers (2/3)
Shoppers’ expectations :
– Expectation of a priviledged and differenciated space within the shop=> a real « bubble of pleasure »
– Desire for an atmosphere inviting to escape and focus on oneself– To make an area with appeal stand out:
=> Good deals corner : promotion area=> Innovation theatralisation=> Brands speaking=> Special performance of « self image » categories
Source : Etude Fond de marché L’Oréal 2006
To understand the shopper Main teachings of the study shared with retailers (3/3)
3 universe of « Self Care » well differenciated:
– Take « Self Care » with a moment of pleasure and preparation of oneself – Take « Self Care » working and playing with self image – Take « Self Care » in the secret of a relation with our intimate body
A specific and independant area : For Men
Source : Etude Fond de marché L’Oréal 2006
POLE SEDUCTION
PÔLEFRAICHEUR
PÔLEHOMME
PÔLE INTIME
Parfums Femme
MaquillageColoration
Soins visageSoins corps
Solaires
Acc. chev Coiffants
Bains DouchesSavons
Déodorants
DentifricesBrosses à dents
Rasage fémininDépilatoires
Hygiène intimePréservatifs
Hygiène féminineIncontinence
MouchoirsCoton et coton tige
1ers soinsSoins du cheveu / Shampooings
Gels douchesShampooingsDéodorants
RasageAprès-rasageSoins visage
Parfums
4 univers différenciésrépondant aux attentes consommateurs
MON UNIVERS BEAUTE
Understanding the shopper A study used to lay the foundations for hygiene-beauty department
02.2010L’Oréal DPGP / Essential keys
1. To select CATEGORIES that will be actor of the universe
Make-up, Perfums, Hair colorant, Hair care, Shampoo, Styling, Hair accessories, Deodorants,Bath, shower, Soaps, Skin care, Body care, Sun protection, Female care, Oral Care, Foot care…
NEED FAMILY PLEASURE FAMILY
2. Bring together categories by FAMILY
3. Family repartition according to distribution areas
Understanding and working the categories« Essential keys » factor of differenciation and profitability
02.2010L’Oréal DPGP / Essential keys
4. To create ‘’Boutique’’ surroundings
Understanding and working the categories« Essential keys » factor of differenciation and profitability
02.2010L’Oréal DPGP / Essential keys
5. Visibility of the whole universe
6. Fluidity and free movement among the departments
7. Clean & Lighting
Understanding and working the categories« Essential keys » factor of differenciation and profitability
FLUIDITY OFFLUIDITY OFCONSUMER FLOWCONSUMER FLOW
PLEASURENEED
IMPORTANCE OFIMPORTANCE OFNEW LAUNCHESNEW LAUNCHES
ORGANISATIONORGANISATIONOF THE CATEGORIESOF THE CATEGORIES
VISIBILITYVISIBILITY
02.2010L’Oréal DPGP / Essential keys
Ideal practice
The deployment of category management by L’OREAL with retailers
Asia – Latin America - Europe – East - West – France
(Wal*Mart International)(Latin America, USA)
(stores)
(region)
(formats –CRM)
(small formats)
(formats – future – new countries)
(nobody is forgiven)
(Droguery-Market)
CHINA . WAL*MART
UK . ASDA
ARGENTINA . WAL*MART
MEXICO . WAL*MART
UK . TESCO
HUNGARY . TESCO
DI . Belgium
The deployment of category management by L’OREAL
with retailers in Asia
Chine . Beijing.
Argentine .
Indonésie .
Singapour .
Turquie .
BulgarieBulgarie
The deployment of category management by L’OREAL with 3 ECR France partners
Flash on ECR Flash on ECR The 4 areas of in 2010The 4 areas of in 2010
Focus on
Consumer
Connected Business
Information
Share our Supply Chain
Prepare People
Organisation of the new international maturity cards
Category management?
Categories?
ECR definitions of category management
Category : A category is a distinct, manageable group of products/services that consumers perceive to be interrelated and/or substitutable in meeting consumer's needs
Category management : Category Management is a retailer - supplier process of managing categories as strategic business units, producing enhanced business results by focusing on delivering consumer value.
ECR Europe – Rapport des meilleurs pratiques du Category Management (1997)
Men category Market
Men category Market
Men category Market
Men category Market
Overall results
Store average : sell-out x8
CARREFOUR Market advantage for the whole category:
– Panels : +10%– L’Oréal Group : +11.8%
CASINO in CLICHY
CASINO in CLICHY
CASINO in CLICHY
Perspectives Casino 2010
A know-how... Casino in Clichy (-22% before reorganization)
Perfumery at + 66.4% in turnover / PGC Store + 27%# customers + 29% (+15% pdv) Spendings + 29.2% Average price + 14.1%
24-nov-08 au 22-nov-09 (52 semaines) + 66.4%
Weight Perfumery Clichy 7.3% vs 5.4% CasinoContribution Parfumery growth T/O 14%
Seconde réalisation Asnières Parf +26.9% vs +8.7% pdv
LECLERC in FRANCONVILLE
New generations
LECLERC in FRANCONVILLE
LECLERC in FRANCONVILLE
New generations
LECLERC in FRANCONVILLE
New generations
LECLERC in FRANCONVILLE
New generations
LECLERC in FRANCONVILLE
New generations
Pascal Baudhuin Int'l Category Manager . L’Oréal DPGP
09. Maquillage01. Acs Maquillage09. Soin du visage & corps01,5. Parfums Femme03,5. Déo Femme01. Solaire
08. Savon Bain Douche05. Dentaire03. Para05. Coton mouchoir
07,5. Homme Rasage dépilatoire
05. Coloration03. Styling02. Acs Cheveux08. Shampooing
1. Innovation
Promotion
9. Maquillage
Inn
ov
atio
n
Pro
mo
Pro
mo
5. Dentaire
1,5. Parf 3,5. Déo F
Acsmaq
9. Soin visage & corpssolaire
07,5. homme . Ras depl H
3. styling 2. Acs chv 5. coloration
8. shp ap shp
8. SAVON BAIN DOUCHE
3. para
5. Coton mouchoir
SBD
Franconville
LECLERC in FRANCONVILLE
L’OREAL UK
A good example of anglo-saxon experience
Grocery Team Core Category Experts
The UK Category Management team is structured by category and there is a dedicated team for Grocery
Cat Man Key Tasks and Competencies
Deliver Category and Shopper Expertise Retailer Insights
Insights gained through Relationship and Retailer Meetings
Retailer’s Own Objectives for Category Reviews
Retailers View on Brand Performance
Retailers view on Commercial Teams and Overall Trading Relationship
Retailers Timings for Category Reviews
…..
Cat Man Key Tasks and Competencies
Support Range Reviews Optimising the retailer category range
Right brands, Right space, Right adjacencies
BUT ALSO:Defending and developing L’Oreal group share of space
through objective analysis
“Sweating the space as hard as possible!!!”
Reviewing the performance of every sku on each bay size to ensure
– best sales – balanced range– benchmarked vs market– ease of shop/brand blocking– space vs sales analysis
Cat Man Key Tasks and Competencies
Support Range Reviews
Planogram ProposalsCurrent Proposed
Cat Man Key Tasks and Competencies
Support Range Reviews Follow-up Analysis
Skincare Category Range Review Tracking
£500,000
£550,000
£600,000
£650,000
£700,000
£750,000
£800,000
£850,000
£900,000
£950,000
£1,000,000
Jan-
03
Feb
-03
Mar
-03
Apr
-03
May
-03
Jun-
03
Jul-0
3
Aug
-03
Sep
-03
Oct
-03
Nov
-03
Dec
-03
Jan-
04
Feb
-04
Mar
-04
Apr
-04
May
-04
Jun-
04
Jul-0
4
Aug
-04
Sep
-04
Oct
-04
Nov
-04
Dec
-04
Jan-
05
Feb
-05
Mar
-05
Apr
-05
May
-05
Jun-
05+£120k / week
Creating Category Growth following each Range Review…
Skincare Category Range Review Tracking
£0
£20,000
£40,000
£60,000
£80,000
£100,000
£120,000
Jan-
03
Feb
-03
Mar
-03
Apr
-03
May
-03
Jun-
03
Jul-0
3
Aug
-03
Sep
-03
Oct
-03
Nov
-03
Dec
-03
Jan-
04
Feb
-04
Mar
-04
Apr
-04
May
-04
Jun-
04
Jul-0
4
Aug
-04
Sep
-04
Oct
-04
Nov
-04
Dec
-04
Jan-
05
Feb
-05
Mar
-05
Apr
-05
May
-05
Jun-
05
We
ek
ly S
ale
s (£
)
Garnier L'Oreal Paris
Total L'Oreal & Garnier space +31% YoY May 05
Total L'Oreal & Garnier sales +21% YoY
… with L’Oreal Paris & Garnier’s sales leading the trend
Cat Man Key Tasks and Competencies
Drive the Beauty Opportunity
In-Store Environment
LARGE FORMAT (3,500 sq. ft): 15 Stores
Beauty AdviceCentre
Store Project Examples: Morrisons New Look H&B
Impactful visuals signpost entry to H&B; mixture of low and high fixtures encourages browsing; Headers and on- shelf education assist consumers navigate through the fixture
SMALL FORMAT (2,600 sq. ft): 60 Stores
Adaption & Roll-out to 3- Aisle Stores
RESULTS: Morrisons is the fastest growing Retailer in the Beauty Categories
8,6% 8,6%
1,6%
-2,8%
1,2%
3,4%
-4,0%
-2,0%
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
2008 YTD 09
Market Morrisons Tesco
Store Project Examples: Morrisons New Look H&B
Tesco Nottingham 2008
Tesco Home Plus In Store Evolution
•13 stores over 3 year period 2006 -2009• Future vision layout & merchandising for H&B achieved in 2008 stores • Key features – curved free standing gondolas, testers, illuminated branded headers, graphics and lightboxes, interactive educational panels for Skincare & Colourants and category information
bespoke Skincare units (headers + Shelfstrips)
Educational GE’s on Skincare Regime + Testers
bespoke Colourants units (headers + Shelfstrips)
Skincare Advise Tool
Tesco Nottingham 2008
Tesco Homeplus
Engagement at fixture is also key – over 10 minutes browsing result in higher purchase basket
shelf-strips can be used to help consumers understand the different franchises, Leading to consumers purchasing what is right for them
Women find shopping the category confusing and overwhelming in both high-street and supermarkets
32% of skincare shoppers wanting more ‘consultant/advice available’
Over 70% of shoppers know what brand/product they want before entering the store
Shopper insights: Branding and education is key in skincare
Source: L’Oreal Skincare U&A 2009, In-store Research 2010, Quantitative & Qualitative Research Insights February 2009
Tesco Extra Slough
Morrisons Milton Keynes Asda Living Bradford
Superdrug Westfield
Boots Hammersmith
Opportunity: Facial skincare
FAIRPRICE SINGAPORE
TESCO HUNGARY
CARREFOUR AUTEUIL
GUARDIAN MALAYSIA KUALA LUMPUR
CARREFOUR ARGENTINA
FAIRPRICE SINGAPORE
Opportunity: Facial skincare
Impactful visuals in ‘chilled’ section
Generic fins to navigate through Herbs & Spices
Large banners and on-shelf education
Sainsbury’s using strong, clear signage throughout Food & Beverage
How can we replicate education in Skincare to maximise growth?
Very little inspiration to encourage browsing -no clear signage or on-shelf education to assist consumers in finding the right brand/product to match their needs
JS Skincare Vision: Use of impactful visuals and lit shelving to create an inspirational environment; while branded fins help navigate
the fixture…
LOW FIXTURE: Bringing a high-street feel to the grocery environment to encourage browsing
…complemented with information panels and educational shelf strips across all key players to assist shoppers in making the right
choice
…with information panels (and glorifiers) centrally located at eye-level
Interchangeable -to provide
generic information as
well as to shout about ‘New’
The Future
The concepts of the future
« Christophe Robin, Expert Colorist for L’Oréal Paris gives you live all his expert tips and advice »
1. « Bring your phone close to the shelf and meet Christophe Robin, the colorist of the stars »
2. « Select the product of your choice and get Christophe Robin’s specific advice on it »
3. « You need more advice? An expert advisor calls you on the spot to guide you in your selection »
Mobile Initiatives EVENT & IMAGE COMMUNICATION
Mobile Initiatives EVENT & IMAGE COMMUNICATION
« L’Oréal Paris star secrets confidentially on your mobile »
1. « Bring your phone close to the shelf »
2. « Enter in a confidential relation with Laetitia Casta and discover her
favorite lipstick color »
3. « Download a signed kiss from Laetitia Casta as
wallpaper and send it over »
« Download for free «The World Is Mine» on your mobile for one Party Proof purchased!! »
1. « Bring your phone close to the
shelf »
2. « Listen to an extract of Guetta’s last HIT»
3. « At the cashier, download for free the whole HIT on your mobile, and you’re ready to
challenge your look! »
Mobile Initiatives Promotion cross merchandising
« 1€ reduction on your Party Proof for the purchase of Guetta’s CD »
1. « Bring your phone close to the
shelf »
2. « Discover how you can challenge your look with Party Proof»
3. « At the cashier, for the purchase of David Guetta’s CD, 1€ reduction on your
Party Proof! »
Mobile Initiatives Promotion cross merchandising