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BRANDSTORM 2015





BACKGROUND

I- LOREAL TRAVEL RETAIL, THE 6TH CONTINENT

The Travel Retail channel
LOral considers Travel Retail market as a 6
th
continent, as large as a real continent.
A continent with:
its own borderless territory (airports, flights, downtown shops, cruises)
its own capitals (top airports like Dubai, London, Hong Kong, Paris, Singapore, Bangkok or
Istanbul)
its own economy (duty free shops)
its own flow of inhabitants (2000 flights taking off / minute in 2013)
its own population (2.5 billion international air travelers in 2013)

Travel Retail means the business undertaken in all the shops located in duty free areas or any areas
dedicated to travellers: airports, downtown duty free shops, airlines, cruises.
The Travel Retail is a booming market which attracts every year 50 million additional inhabitants,
global travellers, the Global Shoppers, driven by new emerging nationalities: Chinese, Brazilians,
Russians or Nigerians
The main driver of this market is therefore passenger traffic, particularly air traffic. And air traffic is
continuously growing, by 5% on average per year, and represents over 6 billion international flights in
2013. The Travel Retail market therefore fully benefits from the traffic growth. It has already grown
faster than the traffic over the last 10 years and this market is expected to double in the 10 forthcoming
years, thanks in particular to the settlements of new big shopping malls in airports.

LOral, the historical leader
The beauty segment is historically the leading category of this channel, accounting for 30% of total
turnover (source: Generation). And it continues to experience strong growth: the estimated figure for
2013 is +7.4% (source: LOral estimation).
L'Oral is the historical leader in the Beauty category of the Travel Retail market, with over 20%
market share (source: Generation).
In addition to turnover, Travel Retail is a strategic channel for the development and the visibility of our
brands, and in the conquest of the new billion consumers, targeted by LOreals CEO, Jean-Paul Agon.
For many travellers, Travel Retail is the very first opportunity to discover the brands and unique beauty
experiences.
The Global Shopper
The Travel Retail consumers are Global Shoppers: they do not only shop where they live... they shop
wherever they are, in their local markets, when travelling and also in the markets of their destination.
The in-depth analysis of these "nationality corridors" across the world has allowed L'Oral to develop a
tailor made approach, a personalized approach to better engage these Global Shoppers, wherever
they are: services and products adapted to their beauty rituals, with sales person speaking their
language, etc.

Besides, the Travel Retail market is experiencing a new phenomenon: the democratization of
travelling. In all emerging countries, the middle class is keen to travel outside its country, bringing each
year a new wave of travellers, of shoppers in Duty Free shops.

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Thanks to the notoriety and diversity of its unique portfolio of brands, from Luxury (Lancme, Giorgio
Armani, Yves Saint Laurent, Kiehls, Biotherm, Urban Decay, Ralph Lauren, Shu Uemura, Cacharel,
Helena Rubinstein, Diesel, Clarisonic, Viktor & Rolf, Maison Martin Margiela) to Mass-Market (LOral
Paris, Essie), from dermo-cosmetics (Vichy, La Roche-Posay, Roger&Gallet) to hair care products
(Krastase), without forgetting The Body Shop Brand, L'Oral is ideally positioned to offer travellers
from all over the world all the products they want, whatever their beauty rituals or their purchasing
power.

II- LANCME BRAND

Lancme Brands values
Founded in 1935 by Armand Petitjean, visionary and lover of French elegance and women, Lancme
immediately performed in selling perfume, beauty care and make-up to an international clientele.
Today more than ever, ultra-femininity, French excellence, joie-de-vivre, happiness and beauty are at
the very heart of Lancmes DNA. A spirit that asserts itself through one ambition which is that every
woman who comes to Lancme to be more beautiful leaves happier. Because Lancme affirms that
happiness is the most attractive form of beauty.

During its almost 80 years of success, Lancme has become the # 1 brand in the women selective
cosmetics market by offering unique and complementary skin care, make-up and perfume in more
than 130 countries with 20,000 beauty advisers in as many points of sale relaying a message of
French excellence.

The luxury cosmetics house is represented by inspired - and inspiring - ambassadresses (Julia
Roberts, Kate Winslet, Penlope Cruz, Lupita Nyongo, Lily Collins and Daria Werbowy). Chosen for
their beauty, all are charismatic and fully accomplished women. They are also chosen for their
intelligence and for their views on the world around them. They are icons who love life, who are full of
energy and talented; icons every woman can relate to. They embody a radiant, confident and universal
beauty.

Lancme is a pioneering brand and visionary ahead of its time. A brand which keeps writing the future
of cosmetics with great innovations and with iconic products such as Trsor, La vie est belle, LAbsolu
Rouge, Hypnse mascara, Teint Idole, Advanced Gnifique, Visionnaire, Absolu LExtrait, etc.
Lancme successfully combines scientific expertise and an intuitive understanding of women's needs
to offer every one of them the possibility to enhance their beauty and femininity, whatever their age
and whatever their skin color.

Lancme in Travel Retail
Lancme offers its unique vision of beauty and femininity to all the travellers of the world and
especially Global Shoppers. Some of the top worldwide Lancme shops are already in Travel Retail
channel, as Lancme answered with its fantastic portfolio of products to travellers aspirations for
fragrances, make-up and skincare.

Lancmes mission is to introduce women of the world to top age skincare products, innovative and
desirable make-up as well as emotional fragrances. Lancme, in Travel Retail, has always the same
purpose that is to say to spread all over the world French ultra-femininity, effortless chic and
happiness.
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BRANDSTORM 2015 CASE




PRE-CASE STUDY

I- THE TRAVEL RETAIL MARKET

1. Define the market
Study whats out there for travellers in terms of beauty products, services and retail experience in
Travel Retail. What is the current market situation? What are the current trends and the vision for the
future? Imagine what the aeromalls and airports in the future (in 10 years) will look like. What are the
growth opportunities and threats?

2. Identify the competition
Who are the main competitors? Define their positioning and targets.

3. Understand the consumer & identify the consumers trends
Who are the consumers who buy beauty products in airports? What are their habits (frequency,
preferences, rituals)? What are their expectations? Define the main trends for this type of consumers.
How to recruit them, how to loyalize them?

4. Feel the retail experience
What are the specificities of this channel retail experience? Identify how the context of travelling can
impact the retail experience, especially in the airports. In a Global shopper perspective, what aspects
of retail experience can be improved in Travel Retail?

II- LANCME BRAND IN THE TRAVEL RETAIL CHANNEL

Based on what you have just found out, do a SWOT analysis of the Lancme brand in Travel Retail
channel. Find out where the opportunities for Lancme would be in Travel Retail by analyzing:

Business performance
Market share and ranking
Positioning and image
Consumers
Digital strategy
Retail experience in the existing points of sales
Merchandising

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CASE STUDY

Now that you have completed a full analysis on Lancme in Travel Retail, take action and answer the
following:

1. Describe the current retail experience strategy of Lancme in Travel Retail.

2. Imagine whats new to implement in the retail experience in Lancmes Travel Retail shops.
More precisely, what would you do in terms of :
Retail design : architecture of the shop, the way the 3 axes are expressed
Retail animation : specific areas negotiated with retailers (such as podium) for temporary
period
Retail education : Beauty Advisors training (sales force), selling scenario, global services

Nota:
Your strategy should be focused on the development of a new retail experience for
Lancme in Travel Retail, being consumer-centric.
The aim is to increase sales in Travel Retail shops but also to increase recruitment of
travellers to the brand Lancme and to loyalize them with Lancme in returning home,
thanks to a unique and unforgettable retail experience.
Focus on Travel Retail channel specificities to elaborate this Lancme retail experience.
Keep the same number of points of sales but imagine also how to enhance the retail
experience in these points of sales.

3. Define a new digital communication campaign (launch + next two years) for the travellers, during
their journey and out of the shops (before their flight, arriving at the airport, waiting for their flight), to
aggressively expand Lancmes share in the Travel Retail channel.

Nota:
The travellers are Global Shoppers: internet addicts, fully equipped during their trip, carrying
their devices all the time.



Your strategy must consider the following:

Your strategy will be developed with the aim of recruiting new customers in Travel Retail
channel and for local markets.
Your retail experience must be in line with Lancme Brand values and LOral Travel Retail
positioning.
Keep in mind the Global Shopper retail experience approach.
Keep in mind the airport authorities constraints and the retailers requirements. Travel retail
channel is a trinity partnership between airports, retailers and brands.
You have no constraint in terms of budget and profitability but you must stay realistic!