ECR Europe Forum '05. Shopper. Case Study Champion L Oreal

A distinctive, strategic approach to provide consumers with comfort and satisfaction: Deployment of a new Health & Beauty concept in three store formats & Catherine Sébastien de Saint Louvent Debelle 1

A longstanding partnership on many Health & Beauty fronts… Store concepts Beauty events Targeted marketing/ building loyalty Marketing by product category: cosmetics, hair coloring etc. 2

…involving store personnel… Stores participate in all decisions A Champion store concept guide, Director, based in- store 3

…head office teams, independent of the commercial relationship… Champion: marketing expertise General management Marketing categories L’Oréal Consumer Products Division: HB expertise, a cross-cutting, independent set-up from group companies Sales Div. Category Company Marketing Div. management General management Market Market Company Research Dept. Research Dept. Sales strategic Company policy 4

…and general management. Every six months: joint meeting of our executive boards Systematic support to keep projects moving forward. Chief Executive Officer Chief Executive Officer THIERRY GARNIER ALEXANDRE POPOFF 5

A partnership that starts with a practical action plan Champion's Health & Beauty market share has growth potential. It is lower than the Consumer Products market share. CP market HB market Performance share 2003 share 2003 index 2003 Champion 7.8% 6.6% 85 Competitor SM 1 7.9% 7.1% 90 Competitor SM 2 11.5% 10.8% 94 Competitor HM 3 17.4% 19.5% 112 Source: Sécodip survey CAM P13 2003 6

A partnership that starts with a practical action plan HB department can be made more attractive and inviting. 3 Growth avenues identified: PROMOTION Spotlighting and visibility need to be optimized INNOVATIONS ADVICE Underemphasized, not pushed enough A necessity for technical product categories One essential requirement : REALISM 7

Consumers' path through the department: two distinct patterns… Personal hygiene Men Cotton Men's tissues products Dental Cosmetic removal wipes Feminine products Cosmetics hygiene Beauty, women Hair Tester Body care conditioner Haircolor table Facial care Hairdressing products/ brushes Pleasure path Deodorant Shampoo Fragrance Functional path Soap Family products Children's Shower gel products Promotion Main Promotion entrance A two-stage path: one for the family, one personal. 8

…And two types of expectation. Pleasure Need Cosmetics Skin care Eau de toilette Soap Hairdressing Deodorant Hair care Dental products Hair coloring Cotton products Men Feminine hygiene A new typology distinguishing Pleasure purchases (spontaneous, impulsive) from Need purchases (planned, written on shopping list). 9

…And two types of expectation. Pleasure Need To generate impulse Soap buying, located at Deodorant the point where Dental products consumer flows arrive in the Health Cotton products & Beauty Feminine hygiene department A new typology distinguishing Pleasure purchases (spontaneous, impulsive) from Need purchases (planned, written on shopping list). 10

…And two types of expectation. Pleasure Need To generate impulse To generate traffic, buying, located at located after Pleasure the point where categories consumer flows arrive in the Health & Beauty department A new typology distinguishing Pleasure purchases (spontaneous, impulsive) from Need purchases (planned, written on shopping list). 11

Transposition at point of sale (example in a hypermarket) DIRECTION OF TRAFFIC Pleasure CATEGORIES Need CATEGORIES 12

A system that works: Pleasure categories perform superbly Example: sales in terms of value in HM store test versus Champion France sales July 2003-October 2004 70% 60% 50% 40% 30% Test France 20% 10% 0% / O AR IAL ST VER ER TS S R P G G P TS N T O VE -U IN C ND E IN N C U C C N O R PO O E O U O KE FA C YL R A E TI EY WE EM D R I U LO K R A IT M LO EM A O D A O O A R EM R PR O O M D SH H PR C P EO /S U E IR C H E- R D G A AT IR U IN K H IC A A B AV H M N A SH M 13

A single, adaptable concept for three formats Hypermarket : > 2,500 sq.m Total 53 / Restructured : 20 Urban Center SM : < 1,200 sq.m Total : 5 / Restructured : 3 Champion: Supermarket : < 2,500 sq.m 1,028 point of sales Total : 970 / Work in progress 14

THE HYPERMARKET FORMAT 15

An inviting perfumery area CHAMPION RETHEL - FILM 16

Special focus on the 3 growth avenues General management INNOVATION PROMOTIONS ADVICE on flagship get enhanced visibility spotlighted categories CHAMPION VANNES 17

A floor plan based on what we have learned from consumers Women Needs Cosmetics Hair color Deo + EDT + EDC Foot care Feminine hygiene Direction of Personal traffic Face and body hygiene Tissues/cotton PROMO PROMO PROMO Direction of Hairdressing Accessories Dental care traffic Men Shampoo Bath/shower Family Pleasure 18

A concept that attracts shoppers and boosts sales Test store Benchmark Average time spent in the area: 2 min 20 sec 1 min 35 sec Average number of purchases: 1.41 1.26 In the test store, the area generates a higher average number of purchases and a greater average time spent in the department. Base test: 203/benchmark: 273 respondents 19

…And boosts sales T/O growth* Qty sold growth* HB averages in 10 restructured HMs : +12.0% +8.8% Highest results in HB : +30.1% +19.9% Average difference between restructured HB and national HB : + 11 points *HB comparison: three months following restructuring vs N-1. Data from Champion checkout system. 20

THE URBAN SUPERMARKET FORMAT 21

Variant of the concept for the City Center format 22

Variant of the concept for the City Center format The “New product” area moves to upper gondolas 23

Variant of the concept for the City Center format The inviting character reproduced through product category visuals 24

…Once again, with a floor plan inspired by consumers Women Cosmetics Hair Face & body Deo + EDT + EDC Dental Feminine hygiene color care Direction of traffic Personal hygiene Men Accessories Hairdressing Shampoo Bath/shower Cotton/tissues Family Pleasur Needs e 25

THE SUPERMARKET FORMAT 26

The Supermarket format: promotion as the engine of growth Promotion : Event-based spotlighting of promotions 27

The Supermarket format: promotion as the engine of growth Promotion : Event-based spotlighting of promotions Attractiveness : reuse of visual from urban format 28

The Supermarket format: promotion as the engine of growth Promotion : Event-based spotlighting of promotions Attractiveness : reuse of visual from urban format Innovation : reuse of « new products » area from the urban format 29

Conclusion Key Success Factor : Deployment orchestrated in and by the point of sale Consumer surveys/shoppers in the store Creation of a test store (Champion Bayeux) Consumer validation/store flows Champion issues call for tenders for store fixtures Decision from stores to adopt the new concept Order by technical staff 30

Conclusion Steady increase in market share A rising performance index CP market HB market Performance Sh. Sh. index Champion 2003 7.8% 6.6% 85 Champion 2004 7.8% 6.9% 88 Source: Sécodip survey CAM P13 2003 and CAM P13 2004. 31

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ECR Europe Forum '05. Shopper. Case Study Champion L Oreal

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ECR Europe Forum ’05. Shopper. Case Study Champion L Oreal — Presentation Transcript