L'Oréal to hit $1.5 billion online sales target, Korean multinational buys Paul Poiret, Sephora to launch beauty subscription box, and signature brand buoys Elizabeth Arden.
L'Oréal to hit $1.5 billion online sales target
The world's largest cosmetics company has been kicking major digital goals for some time. Breakthroughs such as the L'Oréal Paris Makeup Genius app, major social media campaigns and consistent top rankings on L2's Digital IQ Index. According to Francoise Lauvin, Director of Investor Relations for L'Oreal Finance, the French giant is set to join the global leaders in online sales by the end of the year.
Top500Guide.com reveals that only 89 companies worldwide have reached the one billion euro (AUD$1.5 billion) sales mark. With e-commerce representing 4 per cent of L'Oréal's global sales, online revenues totalled 512 million euros (AUD$779.7 million)in the first half of the year. Online sales in China are expected to spike in the second half, rising to 15 per cent of L'Oréal's total Chinese sales. Analysts estimate that L'Oréal will easily cruise past one billion euros (AUD$1.5 billion) in e-commerce sales for the total calendar year.
CEO, Jean-Paul Agon elaborates: "We have recruited many people, because it's a completely new expertise and we want the best expertise in the industry. We are recruiting a dream team of digital geeks and experts that can really help us win the battle. And we are very excited because we think that it's going to be a great competitive advantage".
Korean multinational buys Paul Poiret
Last October, we reported that the historic Parisian fashion house, Paul Poiret, had been put on the block by Luvanis, a specialist in reviving iconic heritage brands. Poiret, once a bitter rival of Coco Chanel, was the first designer to launch a signature fragrance more than a decade before the debut of Chanel No 5 in the 1920s. And that's the direction new owners, Shinsegae International ( owned by Samsung) will be taking the brand.
The ultimate aim is to reinvent Paul Poiret for today's consumer, beginning with lucrative fragrance and makeup licenses. Once the name is top-of-mind again, Shinsagae will look at reviving the fashion and accessories side of the business. The financial details of the buyout weren't disclosed but the agreement includes extensive rights to the Poiret archive collection.
Known as the "King of Fashion", Paul Poiret was widely recognised for his marketing acumen and was the first designer to offer perfume, cosmetics, interior design and fashion as a "total lifestyle". He liberated women from wearing corsets and pioneered the chemise and clothes that draped from the shoulders. He loved whip-thin women, designed extravagant window displays and organised amazing parties. The Koreans have plenty to build on.
Sephora to launch beauty subscription box
It's been a landmark month for the world's largest beauty store chain. Last week, the LVMH-owned company announced its first foray into travel retail and has followed up with news of its entry into the beauty subscription box market. Called PLAY! By Sephora, the new initiative will be rolled out in the US from September in select cities, including Boston, Cincinnati and Colombus, before launching nationwide in 2016.
Each monthly box will retail for US$10 and contain five prestige deluxe samples centred on a theme. The debut box will be called "Uncover the Essentials" and will offer a Sephora Collection Rouge Infusion lipgloss, a Beauty Highlighter eyeliner, an Ole Henriksen Sheer Transformation Face Creme, Bumble & bumble Hairdresser's Invisible Oil and a Glamglow Supercleanse cleanser. Also in the mix will be a PLAY! Book, offering beauty tips and a PLAY! Pass to allow subscribers to access the Sephora To Go app.
While Birchbox, Glossybox and Australia's own Bellabox had to build their businesses from the ground up, Sephora instantly plugs in to 1900 locations worldwide and a massive loyalty program. According to the company - PLAY! is the only beauty box that delivers exactly what customers want - the hottest prestige brands and products available at Sephora.
Signature brand buoys Elizabeth Arden
Many financial reports contain good and bad news. On the surface, Elizabeth Arden had a disappointing fourth quarter as the effects of a stong US dollar and declining American sales bashed the company's bottom line. Net sales slid from US$191.7 million to US$175.5 million.
Looking closer, though, sales of the signature Elizabeth Arden brand grew 7 per cent worldwide. The US market may have dipped 13 per cent but international sales increased 15 per cent. A new Elizabeth Arden brand marketing campaign is set to debut over the next couple of months and a series of innovative product launches such as Superstart Skin Renwal Booster and Always Red, a flanker of the best-selling Red Door fragrance, are set to bow. The Arden brand has been making great headway in Asia and the joint venture with Luxasia, the prestige beauty distributor, is expected to propel the hoped-for turnaround.
In another shift away from its stable of poorly-performing celebrity fragrances, the company launched its first fragrance from Wildfox Couture in the US this month. A popular brand which could go a long way to to lifting US sales. Chairman and CEO, E. Scott Beattie, predicts that net sales will increase in fiscal 2016, driven by international expansion and the continuing success of the Elizabeth Arden signature brand.
Snippets from the wires
- There's been an avalanche of anti-frizz hair products flooding the market in recent years. No wonder. According to new US research from , 62 per cent of women consider frizz to be their most dreaded hair problem. Hair straighteners are the most favoured solution with 43 per cent of women, followed by piling hair in an up-do - 39 per cent.
- The surge in foreign tourists to Japan, travel retail sales and an improved Japanese economy helped sales at to increase 20. 2 per cent in the past quarter to US$1.63 billion.
- According to a new Harris Poll in the US, 59 per cent of women buying beauty products read the ingredients label first. The names they DON'T want to see are: sulphates (29 per cent), parabens (22 per cent), synthetic fragrances (18 per cent), PEG compounds (15 per cent) and mineral oil (11 per cent).
- A US study from Synchrony Financial warns retailers to adapt a more multigenerational approach, rather than focus too strongly on Millennials. According to the report, Baby Boomers (30 per cent of the US population) are responsible for 43 per cent of retail spending, followed by Gen X (25 per cent of the US population) with 30 per cent of the retail spend. Millennials tie with the "Silent Generation"- the over-69s - with both demos accounting for 12 per cent of the total retail spend. A situation mirrored in Australia.
- Australians are still eating a lot of chips and biscuits says IBISWorld in its latest report on the $3 billion snack food industry. But sales of health food snacks are growing at a faster pace to reach $755 million over the next year. The "magic"words consumers respond to are: low fat, low salt, low sugar, gluten-free. dairy-free and vegan. ALDI is leading the charge in private label health food snacks, says the researcher, and Woolworths is enjoying strong success with its health-conscious Macro Wholefoods and Macro Organic private label brands. The most popular energy snack foods are muesli and protein bars.
Newsletter image: Instagram.com/realbarbarapalvin
