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1. Insight Information in
Category Management Co-operation
Xavier FILOU
General Manager of Corporate Trade Relations L’OREAL
Copresident ECR France
2.
3. 2009 Key Figures
World’s number 1
cosmetics group 130 countries
23
international
67,500 employees
brands(1)
17.5 billion euros of
sales in 2008
674 patents
registered in 2008
(1) Brands with annual sales of more than 50 million euros.
4. A Pure Player in Beauty
Present in 4 key distribution channels
Hair salons Mass market Selective Pharmacies
5. A resilient cosmetics market…
Annual growth rate of + 4.5 % over the last 15 years
+5.5%
+3.0%
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
(1993 – 2008* - Annual growth rate)
Excluding soap, toothpaste and razors. Provisional estimates for 2008. Source: L’Oréal estimates
6. World’s number 1 cosmetics group
WWD Beauty Biz Ranking Sept. 2009
30 2008 Sales
Sales in billion US dollars
25,81 « Beauty’s Top 100 »
25 in US $
19,8
20
15,55
15
10 7,84 7,6 7,03 6,49 5,8 5,56
4,43
5
0
L’Oréal Unilever * Avon Shiseido * Kao Corp.*
Procter Estée Beiersdorf Johnson Chanel *
& Gamble * Lauder & Johnson *
* estimates
7. Constantly improving its worldwide positions
L’Oréal market share* 2000–2008
Based on estimates of the worldwide cosmetics market updated in 2007
15.8%**
15.2%
14.3%
13.6% 13.8%
13.2%
12.4%
11.7%
11.0%
2000 2001 2002 2003 2004 2005 2006 2007 2008
* Excluding soap, toothpaste and razors. Source: L’Oréal estimates.
** 2008 with YSL Beauté over a full year
8. A unique portfolio of strong and complementary brands
Professional
Products
MIZANI
Consumer
Products
Luxury
Products
Active
Cosmetics
The
Body Shop
11. Women over 60 years old spend twice as much
on facial skincare as women under 25 years old
€ 87.3
X2
€ 25.1
< 25 years > 60 years
Average skin care expenses per consumer in France, by age
Source: TNS Worldpanel France - 2008
12. Men: the potential of the new generation
Cleansing Moisturizing
Products users (%) day cream users (%)
30 %
23 %
17 % 15 %
20 – 29 50-59 20 – 29 50-59
years old years old years old years old
Cosmetics’ usage, by age and by category
* H&B Survey - 2005 European Health & Beauty Survey – Men - 2007 - IPSOS
13. Accessible innovation
1
Increasing
Opening up
new categories our
2
consumer
Accelerating base
3
globalisation
Strengthening business
drivers
4
Reducing costs and streamlining
organisational structures
5
5 strategic thrusts
18. 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
19. N°1 worldwide, we are bearer of responsabilities
vis-à-vis consumers and retailers
Category Management Scope of Actions
The Hygiene-Beauty Expertise: Beauté :
L’expertise Hygiène
-To Définirandexprimer la strategic vision of L’OREAL on HB l’HB
- define et express the vision stratégique de L’Oréal sur
Vision -To anticipate market evolutions, distribution changes and competitor’s initiatives
globale - Anticiper les évolutions de marchés, les mutations de la
-To develop partnerships on HB department with our customers
distribution et les initiatives des concurrents
- Développer des partenariats sur le rayon HB avec nos clients
La stratégie catégorielle :
The category strategy:
-To Identifier les leviers de croissance par catégorie et par enseigne
-
identify the growth driver by category and by banner (market and performance
Stratégie review) de marché et de performance)
(Revues
ciblée -To Influencer le distributeurbuilding of his categoryde sa stratégie
-
influate the retailer in the dans la construction strategy (assortment,
merchandising, valorisation...)merchandising, valorisation…)
catégorielle (assortiment,
-To Coordonnerprojects, to ensure thele suivi, la the measure of the results and
-
coordonate les projets, assurer follow-up, mesure des résultats
the implementation of d’éventuelles actions correctives
et la mise en place possible corrective actions.
The operationalopérationnelle et ciblée :
L’action and focus action:
Action -To coordonate the « trans-affaires » projects and the specific actions for the
spécifique retailers (special les chantiersBeauté, ECR,... ) et les actions
- Coordonner events, Club trans-Affaires
spécifiques enseignes (op événementielles, Club Beauté, ECR…)
20. 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
21. To understand the shopper
Main 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
22. 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
23. 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
24. Understanding the shopper
A study used to lay the foundations for hygiene-beauty department
4 univers différenciés
répondant aux attentes consommateurs
MON UNIVERS BEAUTE
POLE PÔLE PÔLE PÔLE
SEDUCTION FRAICHEUR INTIME HOMME
Parfums Femme Rasage féminin Gels douches
Dépilatoires Shampooings
Maquillage Bains Douches Déodorants
Coloration Savons Hygiène intime
Déodorants Préservatifs Rasage
Soins visage Après-rasage
Soins corps Dentifrices Hygiène féminine Soins visage
Solaires Brosses à dents Incontinence
Parfums
Acc. chev Mouchoirs
Coiffants Coton et coton tige
Soins du cheveu / Shampooings 1ers soins
25. Understanding and working the categories
« Essential keys » factor of differenciation and profitability
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…
2. Bring together categories by FAMILY
NEED FAMILY PLEASURE FAMILY
3. Family repartition according to distribution areas
L’Oréal DPGP / Essential keys 02.2010
26. 4. To create ‘’Boutique’’ surroundings
Understanding and working the categories
« Essential keys » factor of differenciation and profitability
L’Oréal DPGP / Essential keys 02.2010
27. Understanding and working the categories
« Essential keys » factor of differenciation and profitability
5. Visibility of the whole universe
6. Fluidity and free movement among the departments
7. Clean & Lighting
L’Oréal DPGP / Essential keys 02.2010
28. Ideal practice
IMPORTANCE OF
NEW LAUNCHES
VISIBILITY
ORGANISATION
NEED PLEASURE
OF THE CATEGORIES
FLUIDITY OF
CONSUMER FLOW
L’Oréal DPGP / Essential keys 02.2010
29. The deployment of category management by L’OREAL
with retailers
Asia – Latin America - Europe – East - West – France
(Wal*Mart International) (Droguery-Market)
(Latin America, USA)
(region)
(formats –CRM)
(stores)
(formats – future –
new countries)
(small formats) (nobody is forgiven)
36. The deployment of category management by L’OREAL
with 3 ECR France partners
37. Flash on ECR
The 4 areas of in 2010
Focus Connected
on Business
Consumer Information
Prepare
People
Share our Supply Chain
Organisation of the new international maturity cards
38. Category management?
Support for Marketing? Merchandising?
sales?
Tactic? Strategic?
Banner? Pricing? Brand?
Assortment? New products? Promotion? Replenishment?
Volume growth? Margin growth? Loyalty growth?
Uniformisation? Differenciation?
39. Categories?
302? 271?
Family group? Family of products? Classification?
Universe? Department? Types?
Global product data Classification (GPC) ?
Consumers? Shoppers?
40. 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)
59. The UK Category Management team is structured by category
and there is a dedicated team for Grocery
Grocery Team Core Category Experts
60. Cat Man Key Tasks and Competencies
Deliver Category and
Shopper Expertise Retailer Insights
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
…..
Insights gained through Relationship and Retailer Meetings
61. 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
62. Cat Man Key Tasks and Competencies
Support
Range Reviews
Planogram Proposals
Current Proposed
63. Cat Man Key Tasks and Competencies
Support
Range Reviews
Follow-up Analysis
Creating Category Growth following … with L’Oreal Paris & Garnier’s sales leading
each Range Review… the trend
Skincare Category Range Review Tracking Skincare Category Range Review Tracking
£1,000,000 £120,000
£950,000
£100,000
£900,000
£850,000 +£120k / week
£80,000
Weekly Sales (£)
£800,000
£60,000
£750,000
£700,000
£40,000
£650,000
Total L'Oreal & Garnier space +31% YoY May 05
£20,000
£600,000 Total L'Oreal & Garnier sales +21% YoY
£550,000
£0
May-03
May-04
May-05
Mar-03
Nov-03
Mar-04
Nov-04
Mar-05
Jan-03
Feb-03
Apr-03
Jun-03
Jul-03
Aug-03
Sep-03
Oct-03
Dec-03
Jan-04
Feb-04
Apr-04
Jun-04
Jul-04
Aug-04
Sep-04
Oct-04
Dec-04
Jan-05
Feb-05
Apr-05
Jun-05
£500,000
May-03
May-04
May-05
Mar-03
Nov-03
Mar-04
Nov-04
Mar-05
Jan-03
Feb-03
Apr-03
Jun-03
Jul-03
Aug-03
Sep-03
Oct-03
Dec-03
Jan-04
Feb-04
Apr-04
Jun-04
Jul-04
Aug-04
Sep-04
Oct-04
Dec-04
Jan-05
Feb-05
Apr-05
Jun-05
Garnier L'Oreal Paris
64. Cat Man Key Tasks and Competencies
Drive the
Beauty Opportunity
In-Store Environment
65. Store Project Examples: Morrisons New Look H&B
LARGE FORMAT (3,500 sq. ft): 15 Stores
Beauty Advice
Centre
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
66. Store Project Examples: Morrisons New Look H&B
Adaption & Roll-out to
3- Aisle Stores
SMALL FORMAT (2,600 sq. ft): 60 Stores
10,0%
8,6% 8,6%
8,0%
6,0%
RESULTS: Morrisons is the fastest 4,0% 3,4%
1,6% 1,2%
growing Retailer in the Beauty 2,0%
0,0%
Categories -2,0% 2008 YTD 09
-4,0% -2,8%
Market Morrisons Tesco
67. 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,
Tesco
graphics and lightboxes, interactive educational panels for Skincare & Colourants and Nottingham 2008
category information
68. Tesco Homeplus
Tesco
Nottingham 2008
bespoke Skincare units Educational GE’s on bespoke Colourants units Skincare Advise Tool
(headers + Shelfstrips) Skincare Regime + Testers (headers + Shelfstrips)
69. Shopper insights: Branding and education is key in skincare
Over 70% of shoppers know what brand/product they want before entering the store
Women find shopping the category confusing and overwhelming in both high-street and
supermarkets
32% of skincare shoppers wanting more ‘consultant/advice available’
shelf-strips can be used to help consumers understand the different franchises, Leading
to consumers purchasing what is right for them
Engagement at fixture is also key – over 10 minutes browsing result in higher purchase
basket
Source: L’Oreal Skincare U&A 2009, In-store Research 2010, Quantitative & Qualitative Research Insights February 2009
70. Opportunity: Facial skincare
Boots Superdrug
Hammersmith Westfield Tesco Extra Slough
Morrisons Milton
Keynes Asda Living Bradford
71. Opportunity: Facial skincare
CARREFOUR ARGENTINA CARREFOUR AUTEUIL
TESCO HUNGARY
FAIRPRICE SINGAPORE
GUARDIAN MALAYSIA
KUALA LUMPUR FAIRPRICE SINGAPORE
72. Sainsbury’s using strong, clear signage throughout Food & Beverage
Impactful visuals in Generic fins to navigate Large banners and on-
‘chilled’ section through Herbs & Spices shelf education
73. 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
74. 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
75. …complemented with information panels and educational shelf
strips across all key players to assist shoppers in making the right
choice
76. …with information panels (and glorifiers) centrally located
at eye-level
Interchangeable
-to provide
generic
information as
well as to shout
about ‘New’
78. Mobile Initiatives
EVENT & IMAGE COMMUNICATION
« 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 »
3. « You need more advice?
2. « Select the product An expert advisor calls you
of your choice and get on the spot to guide you in
Christophe Robin’s your selection »
specific advice on it »
79. Mobile Initiatives
EVENT & IMAGE COMMUNICATION
« L’Oréal Paris star secrets confidentially on your
mobile »
1. « Bring your phone close
to the shelf »
3. « Download a signed kiss from
Laetitia Casta as wallpaper and
send it over »
2. « Enter in a confidential
relation with Laetitia Casta
and discover her favorite
lipstick color »
80. Mobile Initiatives
Promotion cross merchandising
« Download for free «The World Is Mine» on your mobile
for one Party Proof purchased!! »
1. « Bring your phone
close to the shelf »
3. « At the cashier, download for free
the whole HIT on your mobile, and
2. « Listen to an you’re ready to challenge your look! »
extract of Guetta’s
last HIT»
81. 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 »
3. « At the cashier, for the
purchase of David Guetta’s CD, 1€
reduction on your Party Proof! »
2. « Discover how
you can challenge
your look with Party
Proof»
