Travel Retail The Lancômmers

Aidana aitzhanova | Arthur Bellanger | Christina Chen Nov 25, 2014

AGENDA Current market situation Travel retail market situation Current trend Consumers Future trend Competition SWOT Recommendations

L’Oreal is the leader in Beauty Western Europe 35.1% North America 25.1% Asia, Pacific 25.1%

CURRENT MARKET SITUATION

SKINCARE | HAIRCARE | MAKE-UP are the leaders

MARKET   ENVIRONMENT   SWOT   RECOMMENDATIONS  

Market Situation: Travel Retail�

Air traffic is continuously growing by 5% on average per year

Over 6 billion international flights in 2013

L’Oreal is LEADER in BEAUTY category of the TRAVEL Retail

Airports 57%

Downtown Duty Free

Shops 33%

Airlines 6%

Cruises 4%

MARKET   ENVIRONMENT   SWOT   RECOMMENDATIONS  

Global shopper \glō-bəl shä-pər\ noun

1. Fashion addict consumers from emerging countries. 2. Middle class that travel outside their country. 3. Shops everywhere. 4. Internet addicts; device equipped. 5. Impulsive purchase at airports.

MARKET   ENVIRONMENT   SWOT   RECOMMENDATIONS  

Technology savvy Most traffic: Istanbul, Doha (Qatar), Kuala Lumpur (Malaysia), Dubai

Great way to expose brand to more consumers Consumers have to be exposed to the shops to get to their gates

CURRENT TRENDS

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2. BROWSE

1. GIFT

3. PRICES

Why do they go to duty free?

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FUTURE TREND / AEROMALL

Duty free stores in planes Retail experience on the plane Travellers get a chance to try out the products while they are on the plane

Location services on mobile phones could soon be helping to synchronize the likes of airport, shopping, taxi and restaurant offerings.

(Lancôme partners with major airline companies: KLM, British Airways, etc.)  

MARKET   ENVIRONMENT   SWOT   RECOMMENDATIONS  

COMPETITION �Luxury Mass

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POSITIONING �Price

Perceived Luxury

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S STRENGTHS

W WEAKNESSES

O OPPORTUNITIES

T THREATS

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STRENGTHS

W WEAKNESSES

O OPPORTUNITIES

T THREATS

Access to L’Oreal resources Brand image Digital marketing leader Existing distribution channels Natural Ingredients/Sustainability

MARKET   ENVIRONMENT   SWOT   RECOMMENDATIONS  

       

       

S STRENGTHS

WEAKNESSES

O OPPORTUNITIES

T THREATS

The brand may be perceived for an older demographics No diversification in shopping experience at POS Heavily dependent on 3rd party retailers

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S STRENGTHS

W WEAKNESSES

OPPORTUNITIES

T THREATS

Impulsive purchase Increasing trend for gift shopping at airports Increasingly large middle class Technological savvy global Shoppers Long waiting time for flight

MARKET   ENVIRONMENT   SWOT   RECOMMENDATIONS  

       

       

S STRENGTHS

W WEAKNESSES

O OPPORTUNITIES

THREATS

Fierce competitors Counterfeits goods Information overload Overwhelming environment Low switching costs Low loyalty

MARKET   ENVIRONMENT   SWOT   RECOMMENDATIONS  

IN-AIRPORT RETAIL PLAN �3 alternatives

Improving existing in-store experience

Redesign store concept & offerings

Special & unique new experience

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#1 Offer Hand + Face massage

Turned out successful in Beijing 40% of all massages resulted in sale

Increase product awareness Minimal cost

MARKET   ENVIRONMENT   SWOT   RECOMMENDATIONS  

MARKET   ENVIRONMENT   SWOT   RECOMMENDATIONS  

#2 New store design Inspired from Beijing 2014 "Maison Lancôme” - clear success Lancôme Wonderland 3D experience on some occasions Skincare analysis machine Massages

Only in very large, key airports (where people spend long hours)

Paris|Beijing|Doha

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#3 Stand-alone store: unlabeled polished black box with rose symbol  Atmosphere of travel retail = weakness Separates Lancôme from the rest of the airport. Allow all senses to experience the Lancôme Magic. Inside: renewed classic store

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ON-BOARD PLAN �3 Suggestions

First class & Business Economy

On-board duty free

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#1 Sample package on the plane for first & business class Affluent women: purchase product afterwards

Affluent men: bring it to their wife / daughter creating potential customer

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Lottery to win travel-kit 10% of economy passengers win a free kit that is brought to their seat during the flight. Seasonal: During holidays on planes going to Paris.

#2 Result: New reach | Potential for viral marketing

MARKET   ENVIRONMENT   SWOT   RECOMMENDATIONS  

#3 On-Board duty free

Replicate the A-380 of Korean Air L'Oreal on-board shop

Partner up with: Singapore Airlines (19 operating, 5 awaiting delivery) Air France (10 operating, 2 awaiting delivery) Emirates (53 operating, 87 awaiting delivery) Thai Airways International (6 operating)

MARKET   ENVIRONMENT   SWOT   RECOMMENDATIONS  

Separate consumers from the overwhelming airport atmosphere into the Lancôme world. Transform the purchase into an experience rather than a meaningless action. Accompany the consumer from start to end of their journey.

KEY TAKEAWAYS�

Travel Retail The Lancômmers