Sunday, Jan. 18, 2004
Because They're Worth It
L'Oreal's marketing tilt toward Asians and blacks makes its growth prospects prettier
By JENNIE JAMES/PARIS
Until she discovered L'Oreal's ethnic-beauty institute on Chicago's South Side, Regina Hatcher had dry, strawlike hair — the price she paid for chemicallystraightening it. But one Sunday, the African-American security officer, 35, received a tip from a friend whose daughter had turned to the center, formally called the L'Oreal Institute for Ethnic Hair and Skin Research, for help following a disastrous perm. "They got her hair back more healthy and shiny," said Hatcher, who promptly booked an appointment for herself — hoping that L'Oreal's stylists andresearchers, armed with a vast array of shampoos, conditioners and gels, could also sort out her tresses. The result? "It was extra soft and bouncy," Hatcher boasts. "I got a lot of compliments." People even hit her with the ultimate admiring cliché: "What did you do to your hair?"
The answer could be worth a pretty penny for L'Oreal. Over the past decade, the world's largest cosmetics concernhas transformed itself from a French company focused on white women into a global titan whose skin, hair and cosmetics products are tailored to consumers from Dallas to Delhi. L'Oreal has a strategic gift for taking cosmetics brands, giving them an innovation injection and a marketing makeover, and then rolling them out across the world: antiaging potions for American boomers or lipsticks foryoung Chinese. L'Oreal is even working on beauty from the inside out: how about a skin-support system that you swallow?
In the U.S., L'Oreal is turning its attention to the rapidly expanding ethnic-beauty market, projected to be worth up to $14.7 billion annually by 2008. Ethnic-beauty care in the U.S. has been dominated by black-centered companies that are close to their customers. Over the pastfive years, L'Oreal bought two of them, SoftSheen and Carson, and integrated them into a single entity that the company sees as a worldbeater. Researchers at the Chicago institute will help develop products that SoftSheen/Carson can take well beyond the U.S. "You can't pretend to be No. 1 in the world," says Alain Evrard, L'Oreal's managing director for Africa, "and forget about 1 billion consumersof African origin."
In the global $60 billion beauty industry, being first feels familiar to L'Oreal. Analysts expect that 2003 sales, to be released this week, will hit $18.2 billion, allowing the company to achieve its 19th consecutive year of double-digit earnings growth. According to Morgan Stanley, L'Oreal is the only cosmetics company over the past five years to have maintained or grownits market share in categories like cosmetics and hair care, both globally and in the U.S. Consider Maybelline, the U.S. mass-market cosmetics house that L'Oreal acquired in 1996. The French giant revamped the brand's drab packaging, relabeled it Maybelline New York to give it an urban edge and took it on the road. From 1996 to 2002, sales of Maybelline outside the U.S. grew 93%. Propelled byproducts like the glistening Water Shine Diamonds lipstick, which cashes in on the trendy wet look for lips, Maybelline is now the preferred cosmetics brand for 44% of Chinese women.
Although L'Oreal takes a global approach, the company is keyed to the chronological and cultural differences of its consumers. The result of this market segmentation: a long-term global-beauty jigsaw, coming togetherpiece by piece. "We're going to have to imagine things that appeal to both ends of the age spectrum and to very different ethnic consumers," says Lindsay Owen-Jones, 57, the Brit who has been at L'Oreal's helm for the past 19 years. "There used to be one ideal consumer. Tomorrow there are going to be many different ideal consumers ... and we're going to have to be good at guessing what they...
Lire le document complet
Veuillez vous inscrire pour avoir accès au document.