The L’Oréal Connection: Firm Seeks Brand Boost With Move Into Retail

L’Oréal’s consumer products group president said the $2.5 billion unit must maintain the individuality of its brands to compete with top...

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NEW YORK — L’Oréal Consumer Products, which generates an estimated $2.5 billion in annual retail sales, must maintain the individuality of its brands to compete with its top rivals, such as Procter & Gamble, L’Oréal Consumer Products Group president Joseph J. Campinell said.

“Our guiding principle is to develop brands with their own unique personalities for each division, and to not become a central function that consolidates its divisions’ marketing and sales efforts,” Campinell said during an interview in his 28th-floor Manhattan office. “We need to focus on our brands, which is what the consumer knows.”

As part of that effort, L’Oréal in September will open its first retail store in Los Angeles’ Beverly Center. The shop will feature the L’Oréal Paris brand, and its estimated 2,500 square feet will be filled with L’Oréal Paris hair color, cosmetics, skin care and hair care items.

The venture seeks to bring the beauty giant precisely what Campinell wants to impress upon consumers — brand identity in a prestige environment. L’Oréal, an upscale mass beauty brand with technology-driven products, will feature items such as the Féria, Preference and Excellence hair color brands; L’Oréal Colour Riche lipstick; True Match foundation, and Dermo-Expertise skin care products.

The store might deliver for L’Oréal as much as for consumers. The potential for what the company stands to learn about customer shopping habits, merchandising and marketing issues, and what the consumer wants in terms of product, might even make L’Oréal’s main competitor, Procter & Gamble, among the most innovative companies in terms of data collection and consumer focus groups, stand at attention.

“We do think the L’Oréal stores will provide some interesting insight on consumer behavior and product education opportunities,” said a beauty executive at a leading national drugstore chain. Translating L’Oréal’s in-store experience to the drugstore industry’s limited beauty environment must remain realistic, the executive said, in terms of service and displays for the store’s data potential to pay off.

Campinell, who took over as president two years ago after 18 years with the company, said that news of the store — and another location to follow in Farmington, Conn. in November — has gone over so well with retailers that several larger chains are inquiring how they could fit a L’Oréal store-within-a-store version in their units.
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