“An exceptional year driven by iconic brands”

What are the main structural trends shaping the luxury market?

First of all, the luxury market is growing strongly, driven on the one hand by the development of a more accessible, easy and relaxed kind of luxury, boosted by social media and, on the other hand, skyrocketing Chinese consumer spending. Young consumers arriving on the market are above all seeking iconic products and desirable brands. This tendency is leading to strong global growth in the selective makeup market, and we are taking full advantage of this, thanks to our makeup brands but also our couture inspired brands, but also to the comeback of skincare, boosted by Millennials x and Chinese consumers. Kiehl’s, IT Cosmetics and Lancôme have benefited from this. Meanwhile, in reaction to the democratisation of a certain luxury, a new demand is building for a kind of luxury that is increasingly premium and exclusive, as shown by the success of niche fragrance and top-end skincare focused on ever-higher quality. This has led to the development of exclusive experiences and a constant increase in personalisation. The common denominator is a quest for differentiation and a special experience.

What is L’Oréal’s strategy in response to these two divergent trends?

The great strength of L’Oréal Luxe is the richness of our brand portfolio, which enables us to meet the expectations of all consumer tribes, at all price levels, with a truly global footprint.
It features major brands such as Lancôme, emblematic of French-style beauty, which has had a record year, and brands linked to the fashion world like Yves Saint Laurent or Giorgio Armani – that are highly inspirational and growing strongly. We also have growth relays that are often category specialists and are more accessible price, such as Urban Decay, IT Cosmetics or Kiehl’s, and of course we have little jewels that are set to become major brands of tomorrow. We are also developing, on all of our brands, a host of premium offerings based on personalisation and bespoke products.

Behind the power of our brands and our innovations, our success lies in our adaptability. A brand like Lancôme has won over new consumers with fun products such as Monsieur Big and Matte Shaker while strengthening its emblematic pillar with major innovations; it’s the case of Génifique with the success of the Advanced Génifique Sensitive Dual Concentrate. Our brands have also engaged consumers strongly via social media or digital, or by offering them unique experiences, for example Yves Saint Laurent with its YSL Beauty Club events.

One of the major challenges is to being increasingly agile and adaptable, to keep pace with the swift changes of today’s digital world, whilst preserving the longer time span of luxury, synonymous with quality, brand heritage and timelessness.

How can you stay tuned in to the numerous aspirations of our consumers?

One of the great change in the consumer habits have been the changes in purchasing behaviour that have continued this year, as we saw in the United States with the powerful expansion of mobile e-commerce, the difficulties of some department stores, the growing importance of beauty specialist chains and the growth of Travel Retail. L’Oréal Luxe is adapting to these shifts by strengthening its partnerships with each retailer, but also by accelerating its D-to-C x. The e-commerce websites of our brands are strategic destinations, and our boutiques are places that offer unique experiences and services. In a world where you can buy anything at anytime with your smartphone, the store has become a media. We have opened several stores, and developed new experiences around the world, including pop-up stores like the Armani Box for example.
To offer consumers new and unique experiences, we have to make sure we are constantly improving the way we meet their specific needs, thanks to data, programmatic media and CRM x. Digital is more than ever a major engagement tool for L’Oréal Luxe.

How did the Division perform in 2017 and what is the outlook for 2018?

2017 was an outstanding year for L’Oréal Luxe. We delivered our strongest growth rate since 2000 and outperformed the market for the 7th year running. 2018 is looking promising. The selective market should remain dynamic. Chinese consumption trends are set to continue, with the growth of the middle class and their appetite for luxury products. And Travel Retail should also benefit from this trend.
The Division has a solid 2018 launch plan for its major brands, and is also going to launch two new brands: Proenza Schouler and House 99. So we intend to keep on outperforming the market.