L‘Oréal Brandstorm 2015

Travel Retail

PATRICK BARTL | SYLWIA KURKOWSKA

April 14th,
L’Oréal Brandstorm 2015 – National 2015
Final Italy
L‘Oréal Brandstorm 2015 – The Challenge

Put yourself in the shoes of

an international marketing
director for Travel Retail
and imagine a new retail
experience for the brand
LANCÔME to attract new
customers!

L’Oréal Brandstorm 2015 – National Final Italy

What is travel retail?

 Travel retail is the business undertaken in all the shops located in duty free areas
or any areas dedicated to travelers. With 30% of total sales, beauty - fragrances and
cosmetics - are the best-selling products in this channel.
 Travel retail consumers are global shoppers who buy not only where they live but
also whilst travelling. It is key to offer them a personalized approach with tailored
experiences, beauty consultants who speak their language, targeted product choices
and even point-of-sale events celebrating their holidays or important events.
 1.087 billion people travelled internationally in 2013, equivalent to approximately
15% of the global population. These tourists contributed an estimated $1,159
billion to various local economies, purchasing accommodation, food and drink,
local transport, entertainment and shopping in destination countries.

Source: L‘Oréal, UNWTO L’Oréal Brandstorm 2015 – National Final Italy

Agenda

1) Highlights of the Market Analysis

2) LANCÔME Digital Marketing Strategy Proposal

3) LANCÔME Retail Experience Proposal

4) Executive Summary

L’Oréal Brandstorm 2015 – National Final Italy

HIGHLIGHTS
Market Analysis

L’Oréal Brandstorm 2015 – National Final Italy

Customer-centricity is the key to success when deciding on
channels and marketing activities throughout the loyalty loop

Promotions Discounts Offers Experiences Personalization Customization

Know the customer…

SEM
Community

AWARENESS

Mobile P.O.S.
RETENTION / LOYALTY

SEO
At home In a store …at any time or place…

CONSIDERATION
Phone In store
…on any device or

Campaigns
At work In transit appliance
Recommendations

channel…
Website Radio
At an At a
event destination …to know what to do
Print TV next…

Email
CONVERSION …across the full
consumer lifecycle.
Loyalty benefits Advocacy rewards X-Sells Microsites

Source: IDC Retail Insights 2015 L’Oréal Brandstorm 2015 – National Final Italy
Therefore, we introduce a persona: Linda Voyage

Takes
32 No Women
care of
years children with heart
French / herself
(yet) Owns a and mind
Brazilian lifestyle
business
Confident
Engaged
Hobbies
Social
Buyer
Fashion Traveling

L’Oréal Brandstorm 2015 – National Final Italy

Linda is a good example for LANCÔME‘s target group
"I want to buy a
gift, pass the
Mature With
time and treat
Women time >6b flights Global 4% annual myself."
in 2013 Market growth
Without
Men
time ~30% travel retail sales in beauty segment

Airports Airlines Premium price

57% 6% >$1.5b
annual Medium price
Downtown
Cruises spending
Duty Free
33% 4% Low price

Source: UN World Tourism Organization L’Oréal Brandstorm 2015 – National Final Italy
The travel retail market is expected to double by 2020
Billion $ US

120
~2x
100
2013
80

60

40

20

0
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

Source: Generation L’Oréal Brandstorm 2015 – National Final Italy

A global business requires dealing with different cultures.
Let us compare consumers from France and the U.S.
Contextual P-Time vs. Hofstede’s National Culture Ethno-
Background M-Time Individualism/ Power Masculinity/ Uncertainty Long Term centricity
Collectivism Distance Femininity Avoidance Orientation

High-Context Polychronic Individual High Masculine High Long-term High

Low-Context Monochronic Collective Low Feminine Low Short-term Low

France U.S.

L’Oréal Brandstorm 2015 – National Final Italy

Current market trends require a big shift
FROM A PRODUCT-DRIVEN TO AN
EXPERIENCE-DRIVEN LUXURY

Democratization of Traveling
Emerging middle class in the New Markets
Personalization
"Tailor made experience"
Recommendation
"Social Buying"
Glocalization
Customized service by nationality
Digitalization
Internet of Things (IoT) and Gamification

L’Oréal Brandstorm 2015 – National Final Italy

LANCÔME needs to leverage market opportunities

 Strong branding
Internal Factors

 Inflexible brand
 Market leadership
image
 High quality
 Lack of natural /
 R&D
organic products
 Innovation S W

 Emerging O T
External Factors

 Strong competition
middle class
 Airports are at or
 Increased on-
near maximum
board sales
capacity
 E-Commerce

L’Oréal Brandstorm 2015 – National Final Italy

LANCÔME – Mission

LANCÔME is THE brand of women. Today more than ever, ultra-femininity,

emotion, joie-de-vivre, happiness and beauty are at the very heart of LANCÔME’s
DNA. A spirit that asserts itself through the most beautiful, the most optimistic
mission:

That all women who come to

Lancôme to be more beautiful,
always leave happier.
L’Oréal Brandstorm 2015 – National Final Italy
In terms of the travel retail market, we translate this into…

Make traveling
more enjoyable
and less stressful,
for a perfect
beauty on-the-go.
L’Oréal Brandstorm 2015 – National Final Italy
Digital Marketing
Strategy Proposal

L’Oréal Brandstorm 2015 – National Final Italy

Digitalization is a fantastic opportunity for beauty

L’ORÉAL wants to be the leader of “digital beauty” 15.7% of media spending on Digital

LANCÔME average basket is 95€

Beauty queries
4.5b per year on Google

views on Beauty
59.2b per year on YouTube

addressable beauty addicts

160m on Facebook

Source: Google Inside 2014, Facebook Audience Jan 2015, e-Marketer 2014 L’Oréal Brandstorm 2015 – National Final Italy
We propose to create Shazam-enabled video adverts
to position LANCÔME as the leading travel retail brand

Linda just returned from a business trip and is

watching TV. She discovers the new LANCÔME
Shazam-enabled advert and activates the Shazam
app on her smartphone to get more information.

L’Oréal Brandstorm 2015 – National Final Italy

The Shazam-enabled video adverts link different channels
and promote the LANCÔME Elite Rewards loyalty program

Shazam recognizes the music in the new

LANCÔME advert and shows Linda a link
to the LANCÔME Elite Rewards loyalty
program. Linda can now download the app.

LANCÔME rolled out its Elite Rewards

loyalty program on April 1, 2014 in the U.S.

The monthly traffic increased by 60%.

Source: L‘Oréal L’Oréal Brandstorm 2015 – National Final Italy
We propose to roll out the LANCÔME Elite Rewards
Program globally and enhance it with the following features

Mobile App

Travel Maps

Leaderboards
(1) Overall (2) Friends

Social Buying
(Wish List)

Geolocation with
iBeacon

L’Oréal Brandstorm 2015 – National Final Italy

Sharing content of LANCÔME on social networks
will be rewarded with loyalty points

Source: Self-adapted advertisement from Munich Airport, Music: Tresor L’Oréal Brandstorm 2015 – National Final Italy
At the airport, LANCÔME has the chance to convert
Linda and retain her for the future

The loyalty program helps

LANCÔME to build
awareness and lets Linda
consider buying the
products that make
traveling more enjoyable
and less stressful.

L’Oréal Brandstorm 2015 – National Final Italy

LANCÔME banners could be placed at strategic
locations at the airport to promote the loyalty program

The usage of gamification

techniques is recommended
to address the core drives
for consumer motivation

L’Oréal Brandstorm 2015 – National Final Italy

After the security check, Linda receives a push notification
from the LANCÔME app triggered by iBeacons in the store

L’Oréal Brandstorm 2015 – National Final Italy

She is curious to explore her special offer and is lead
to the LANCÔME store nearby through the app

L’Oréal Brandstorm 2015 – National Final Italy

The technology enables smartphones or other devices to
perform actions when in close proximity to an iBeacon

iBeacons emit just three identifying pieces of

information in their Bluetooth Low Energy
(BTLE) payload, a universally unique
identifier, a major value, and a minor value.
This helps to identify e.g. the store, the floor
within the store, and the position on that floor. iBeacons are supported by iOS
The store can then serve unique content to the devices with Bluetooth 4.0,
Android 4.3+ devices as well as
user based on their actual position, for
Windows Phones with the
instance a special offer on the Lancôme Lumia Cyan update or above.
perfume the customer is standing in front of.

Source: http://techblog.rga.com/ibeacon-primer-part-ii-ibeacon-vs-geofencing/ L’Oréal Brandstorm 2015 – National Final Italy

Retail Experience
Proposal

L’Oréal Brandstorm 2015 – National Final Italy

 Thanks to iBeacons, the beauty advisor receives Linda‘s
special promotions and history before she enters the store

Digitally enabled touch points

throughout the shopping journey

L’Oréal Brandstorm 2015 – National Final Italy

The LANCÔME MAGIC SCREEN connects
two stores and creates a unique customer experience

When Linda enters the store, she

notices a purple carpet leading to
the LANCÔME MAGIC
SCREEN that displays what is
happening at that moment in
other LANCÔME airport stores
worldwide. Language barriers can
be eliminated by connecting to the
right store in the world.

L’Oréal Brandstorm 2015 – National Final Italy

The Multitouch LANCÔME Experience Table & Digital
Mirror inform about products and apply them virtually

Products with a QR code

can be placed on the table
and trigger the display of
further information

L’Oréal Brandstorm 2015 – National Final Italy

Linda creates a digital postcard to share her new look.
She receives immediate feedback from friends and family

It’s wonderful, I fully

trust my family and
friends and love to
share my new look!

L’Oréal Brandstorm 2015 – National Final Italy

Executive Summary

L’Oréal Brandstorm 2015 – National Final Italy

Executive Summary: Omni-channel Strategy
Make Traveling More Enjoyable and Less Stressful
Awareness Consideration Conversion Retention

Enhanced global LANCÔME Elite Rewards program

Mobile app, iBeacon, Travel maps, Leaderboards

Shazam-enabled video Personalized product packaging (gifting)

advert Delivery at the gate of
destionation airport
Social Buying "Greetings from LANCÔME"
Your picture on a plane (Elite rewards)
Email campaign / Newsletters
Google SEM Customer history when entering the shop
Facebook Ads Magic Screen, Multi-touch LANCÔME Experience table
Airport Banners Camouflage Airport Events
Travel samples on board for the first & business class Ready-to-go travel sets
On board advertisement in magazines

Digital Channels Classical Channels

L’Oréal Brandstorm 2015 – National Final Italy

Contact

Patrick Bartl
Managing Consultant
M.Sc. in International Management

Email: patrick.bartl@outlook.com
LinkedIn: www.linkedin.com/in/patrickbartl

Sylwia Kurkowska
Graduate Student
M.Sc. in International Management

Email: sylwia.kurkowska@studio.unibo.it
LinkedIn: www.linkedin.com/in/sylwiakurkowska

L’Oréal Brandstorm 2015 – National Final Italy