Ta b l e o f CONTENTS 4 - 5 EXECUTIVE SUMMARY 6 - 7 MISSION STATMENT/ VALUES 8 - 9 BUSINESS STRUCTURE 10 -11 OBJECTIVE & RATIONALE 12 - 19 FUTURE GROWTH 20 - 21 OPPORTUNITIES 22 - 23 DISTRIBUTION CHANNELS 24 - 25 COMMUNICATION 28 - 29 NEW YORK LOCATION 30 - 33 STORE LAYOUT 34 - 35 DIGITAL AGENCY 36 - 37 STORE PROMOTION 38 - 39 STORE IMPLEMENTATION 40 - 41 DEMOGRAPHICS 42 - 43 PSYCHOGRAPHICS 44 - 47 CUSTOMER PROFILE 48 - 49 CONCLUSION BIBLIOGRAPHY
Executive S U m m a ry L’Oreal is the #1 beauty brand in the world and continues to do so by having a strong commitment to innovation and research. We have partnered with some of the top innovators in technology such as Microsoft and Apple, who had provided us with the resources to place technology into our brand strategy. We have also partnered with DesignIt, a global strategic design firm, who helped increase the visibility of our brand by creating an opportunity for customer interaction.
As a leading brand in research and innovation, we believe that we should continue to stay ahead of the game. With the help of our partners and our determination to provide beauty for all diverse individuals, we will be implementing smart mirror technology into our new unisex concept store located in New York, in order to accomplish our goal of gaining another one billion consumers from around the world.
our mission
“L’Oréal has set itself the mission of offering all women and men worldwide the best of cosmetics innovation in terms of quality, efficacy and safety. It pursues this goal by meeting the infinite diversity of beauty needs and desires all over the world.”
our va lu e s
PASSION. INNOVATION. ENTREPRENEURIAL SPIRIT. OPEN MINDEDNESS. QUEST FOR EXCELLENCE. RESPONSIBILITY
Current O w n e r s h i p s t ru c t u r e
The L’Oréal Paris brand is a part of the Consumer Products Division that specialises in providing highly accessible beauty and haircare products in mass-markets channels . The L’Oreal company currently owns 32 international brands (L’Oreal).
L’Oreal Luxe Lancome Yves Saint Laurent Kiehls Giorgio Armani Ralph Lauren Clarisonic Biotherm Shu Uemura Diesel Viktor & Rolf Cacharel Helena Rubinstein Urban Decay Guy Laroche Paloma Picasso Yue Sai Maison Martin Margiela
Consumer Products Division L’Oriel Paris Garnier Essie Maybelline Softsheen Carson
Professional Products Division L’Oriel Professionnel Kerastase Paris Pureology Shu Uemura Carita Paris Decleor Redken Matrix Mizani Essie
Active Cosmetics Division Vichy La Roche Posay Sanoflore Skin Ceuticals Roger & Gallet
Objective & R at i o n a l e The purpose of this initiative is to engage the customer through service design, digital strategy and interior design. L’Oreal currently has four European boutiques but has not yet set up a store front in the North American territory. The initiative was inspired by our commitment to innovation in growing our business and providing new offerings to our customers around the world. In order to remain the top beauty leader of innovation, we will open our very first unisex store that will carry smart mirror technology and LED screens which we believe will positively set a new tone for our retail concept. Our objective is to bring customers into our store in order to give them a unique and exciting experience that we will promote through our online and social media channels. In the longterm, we will strategize to innovate new ideas for the use of the Smart Mirrors to remain ahead.
Future G ro w t h
In March 2015, L’Oreal Paris tested out the use of smart mirror technology in an underground subway kiosk of New York. The kiosk was set up to assist women on their way to work by providing them with beauty products that were vended out to them in a similar way to a soda machine. Apple’s Primesense Kinect Camera was placed into the mirrors to scan the colors of the garments on the consumers in order to provide a matching color nail polish or lipstick. The consumers were given the option to choose whether or not they wanted their product to “match” or “clash” (Trewe).
L’Oreal Paris is also taking notice to the digital trends amongst millenials and creating new apps designed for customers interaction through the use of their iphones, tablets and Droids. The Beauty App, that projects makeup trends onto the customers face on their camera, is an innovative tool that was placed into our Madrid boutique. Our store partnered with Apple to have tablets set up inside for our customers to interact with.
Ryan Reynolds has been officially made the new face of L’Oreal Paris Men Expert along with a new tagline “Look Sharp Not Tired”. This was initiated to appeal to the growing market in male grooming that grew to $33 billion this year (Bureau).
Up c o m i n g O p p o rt u n i t i e s L’Oreal Paris has a strong customer base and brand recognition because of their commitment to research and relentless innovation. Currently, the brand’s products are more accessible in drug stores and convenience stores in the U.S. Unfortunately, customers cannot obtain the full effect of the brand experience through mass-markets alone. Last year, the North America market only increased 1.1%, which is very low compared to the other markets. L’Oreal Paris has an opportunity to regain the U.S market (Finance). L’Oreal has an opportunity to implement the color matching technology from the kiosk mirrors and implement them inside of the store along with the face recognition app. There is a threat of other top beauty brands taking over emerging markets such as Sephora. There is also an opportunity to reach out to pre-teens and teenagers that are just starting out with makeup and skincare that want to be educated and more creative with makeup.
Sales by Distribution channels
The L’Oreal group increased their Multi-channel retail strategy by going into the e-commerce avenue for distribution. During 2014, the brand has experienced slow paced growth of 3.6% compared to 2013 but still continues to grow (Finance). There is 69.5% growth increase in e-commerce for the Consumer Products Division that includes L’Oreal Paris, therefore all focus is on digitalisation (Finance).
Our C o m m u n i c at i o n s
We believe that a brand’s reputation accounts for 75% of it’s value and persuasion and that the influence of a brand inspires decisions (L’Oreal Group) . The initiative of L’Oreal opening the first beauty store for men and women in New York will increase our reputation and customer following by persuading multi-targets to experience the new opening who in turn will spread the news about the store through social media and blogs. We will be a step closer to meeting our goal of gaining another billion customers.
Ne w L ocation n e w yo r k The L’Oreal group saw potential in the New York market and set up the first pop-up kiosk in downtown subway. The kiosk received positive reviews and currently, there are no L’Oreal U.S store fronts open. The Soho area of New york is the ideal location to stand. The area is know for it’s historical attractions, famous art galleries, museums, lively nightlife, the shopping destinations and the restaurants. We have found a potential location on Wooster Street located in the heart of Soho. The external structure of the location embodies are aesthetic of classic elegance. According to statistics, the revenue in the cosmetics industry in the U.S is $56.63 billion and is forecasted to increase in the next few years. (Statista)
A newly renovated retail space on Wooster Street in Soho, New York recently became available for lease. This Space has large glass windows that allows for natural lighting and a great view of the inside from the exterior view. The space is located in the shopping district of Soho. According to the PRIZM segmentation of the Soho area, the loca tion consist of “The Young Digerati� which are tech savy individuals with a medium-high income. This segment lives in trendy style apartments and enjoys the arts and the nightlife. This would be the perfect location for a boutique because it is near our target audience (Nielsen).
According to this example of our store setup, our objective is to create an atmosphere that caters to both sexes and that is designed to make our customers feel like they are walking into a comfortable luxury boutique. The store design is minimal yet visually appealing. The smart mirror is the focal point for the customers to see from the outside and to be drawn to. This will create an opportunity for interaction and navigation through the store based on the recommendations that the customer recieves from the smart mirror. The color palette, including lighting, is a reflection of L’Oreal Paris’ trademark colors of black, white and gold.
There will be two seperate rooms dividing the merchandise. In the front entrance, L’Oreal Paris will focus it’s attention on cosmetics. Towards the back will be a consultation area for skin care. In the room in the back, the focus will be on hair care for women. L’Oreal Paris Men Expert will also be near the front entrance focusing on all three categories of shaving, skin care and hair care. The men will also have a consultation area set up for based on the needs within the three categories.
Digital Ag e n c y
Recently, we have partnered with the strategic design firm, DesignIt, to create a service design strategy for our Madrid store location. We will use their services again to customize a strategy that resonates with our North American market. This will contribute to our brand’s commitment to accelerating the digital age in all digital beauty segments: e-commerce, data technologies and interaction with consumers.
Store P ro m o t i o n
L’Oreal Paris USA has a larger social media presence on Youtube, Twitter and Instagram than the other locations around the world. With the help of our social media and online channels, we will promote the new store opening. Youtube will be our first channel of communication to count down the days of our store opening. Our L’Oreal spokesmodels will engage our Youtube followers to build excitement. L’oreal has a huge impact in the fashion industry, this will lead to style bloggers such as WWD, Style.com and Vogue to produce articles about the boutique. A launch party, planned by public relations division, will be held inside of the boutique the day of the store revealing. The event will be open to the general public and invitations to our spokesmodels along with celebrity guest will be delivered.
Store i m p l e m e n tat i o n Pre-Launch Month Establish budget Research locations Potential placement Initiate service design strategy (DesignIT) Negotiate price & size of mirrors (Apple) Creation of mirror Establish visual team Finalize visual imagery Installation Employee training Store revealing Analyze sales and foot traffic
Jan
Feb
March
April
May
Launch June
July
Aug
Sept
Oct
Nov
Post-Launch (Next Year) Dec
Jan
Feb
Our customer Demographic L’Oreal has a target demographic of mostly women of the ages between 18 to 50. Their target demographic has increased over time to involve men and women of every age and every ethnicity. (L’Oreal) According to L’Oreals annual report,
Customer P s yc h o g r a p h i c s Statistics show that millenial women regard shopping as a group activity. They enjoy shopping with their friends, spouses or family members. This is a behavior formed from the need to have the approval of others and millenial women would prefer to get the reassurance from someone that they trust. (Micah) Millenials often post on their social media sites about their concerns, food consumptions, interests and other experiences simply because they prefer not to experience things alone. They want share their experiences with their social groups. (Micah) According to information taken from Euromonitor International, men are increasing their skin care regimens and spending more money on other skin care items rather than the average shampoo or shaving cream. They are spending on eye creams, masks, moisturizers and concealers. (Walker)
Our customer p ro f i l e Age: 25 Occupation: Recent Graduate Income: $30,000/year Taylor is a recent graduate from The University of New York, studying business management. He is laid back yet stylish and pays close attention to his hygene and appearance because he believes in making good first impressions. He enjoys the nightlife and visits the Marquee bar club in New York once a week. He likes to read catch up with the latest business information on his iPhone using the New York Times app. He is always up to date on the latest technology. He enjoys shopping but sticks to a budget
meet Tay l o r
meet v e ro n i c a
Age: 23 Occupation: Intern at Zara Income: $42,000/year Veronica is a full time student studying fashion and is working in an internship program for Zara. She loves to experiment with new hair color trends and is always up to date on the new style trends. She enjoys reading books and watching movies that involve romance and comedy. Whenever she has time, she will read her digital novels on her Droid.
The c o n c lu s i o n
L’Oreal should implement a store in Soho, New York because our target demographic resides in the area, we would be taking the step forward to achieving our goal of reaching one billion more customers and we would be gaining brand recognition with a profitable initiative. The spirit of the times is that of digitalism and L’Oreal is still ahead of the game with our strong commitment to innovation and research.
bibliography
“Key Figures: Brands, Employees, Sales - L.” ‘Oréal Group. Web. 22 May 2015. “Revenue of the Cosmetic Industry in the U.S. 2002-2016 | Forecast.” Statista. Statista. Web. 26 May 2015. <http:// www.statista.com/statistics/243742/revenue-of-the-cosmetic-industry-in-the-us/>. “ENTER.” PRIZM Market Segmentation Research, Tools, Market Segment Research,. 2014. Web. 26 May 2015. <http://www.claritas.com/MyBestSegments/Default.jsp?ID=20&pageName=ZIP+Code+Lookup&menuOption=ziplook up>. Trewe, Marti. “L’Oreal Unveils Futuristic Retail Concept in Underground Digital Kiosk - AGBeat.” AGBeat. AGBeat, 4 Dec. 2013. Web. 26 May 2015. <http://agbeat.com/business-marketing/loreal-unveils-futuristic-retail-concept-underground-pop-shop/>. Bureau, Wi. “Healthcare.” Male Grooming Offers Great Opportunity for Wellness Professionals: L’Oréal India Director. 29 Apr. 2015. Web. 26 May 2015. <http://www.wellnessindia.com/interview/healthcare/modern/Male-grooming-offersgreat-opportunity-for-wellness-professionals-L-Or-al-India-Director.i41/>.
Finance, L’Oreal. “L’Oréal 2014: Cosmetics Market.” L’Oréal 2014: Cosmetics Market. 2014. Web. 24 May 2015. DesignIt, “Finding Beauty in Service Design.” DesignIt, 27 Feb. 2014. Web. 24 May 2015. <http://designit.com/cases/ finding-beauty-in-service-design>.
Finance, L’Oreal. “L’Oréal 2014: Worldwide Performances.” L’Oréal 2014: Worldwide Performances. 2014. Web. 24 May 2015. Soloman, Micah. “2015 Is The Year Of The Millennial Customer: 5 Key Traits These 80 Million Consumers Share.” Forbes. Forbes Magazine, 29 Dec. 2014. Web. 26 May 2015. <http://www.forbes.com/sites/micahsolomon/2014/12/29/5traits-that-define-the-80-million-millennial-customers-coming-your-way/>. Walker, Rob. “GCI Magazine.” It’s a Man’s World: Men’s Grooming Breaks New Ground. GCI Magazine, 21 Feb. 2014. Web. 26 May 2015. <http://www.gcimagazine.com/marketstrends/consumers/men/Its-a-Mans-World-Mens-GroomingBreaks-New-Ground-246591491.html>.
RETAIL STRATEGY BRITTANY TALIAFERRO