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Though the mass beauty division has seen some improvements in the last month — Elf sales increased by more than 10% in the last four weeks, per Nielsen, and Coty’s mass sales were just over -5% versus -7% in the 12-week time period, driven by Covergirl — Revlon’s portfolio of consumer brands fell short.
Faced with social media-driven competitors like, Morphe and Colorpop, offering products, pricing and store experiences that are seemingly better and more relevant to millennial customers, legacy companies have had their work cut out for them. What’s more, they’ve had to increasingly fight for aisle space in traditional mass channels, like Target, which has had its eye on DTC-centric and indie brands.
Despite the challenges in the space, L’Oréal’s consumer division continues to best that of heritage competitors. In first-quarter earnings, the beauty corporation posted 7% gains for the segment, though Maybelline posted a slight dip in the last four weeks, at -1.3%, according to Nielsen.
Leading the charge is Nathalie Gerschtein, the new president of L’Oréal USA’s consumer division, which includes L’Oréal Paris, Maybelline, Garnier, Essie, NYX Professional Makeup, Carol’s Daughter and Softsheen-Carson. In her first exclusive interview since her spring appointment, Gerschtein breaks down what is working for L’Oréal’s consumer segment and what her plans are to further change mass beauty.
When you first entered your role in March, what did you think was top of mind for L’Oréal’s mass segment?
When I arrived in New York last summer from Bangok [where Gerschtein was country manager of L’Oréal Thailand, to become the local president of Maybelline, Garnier and Essie], I spent a lot of time understanding the population in the U.S., and I continued to do that this year. I met our clients and our teams in field, and did home and store visits, and it was striking to me to see the diversity of the population that was not like I had experienced in Asia or Europe. One of the key things we can continue to embrace in the U.S. is that diversity, especially with our makeup lines, like our Fit Me foundations with Maybelline that has 40 shades and True Match with L’Oréal Paris that has 45 shades. Along with that, we launched a new line in January, Made For All by Maybelline, which has seven universal shades of lipstick, which approaches diversity and inclusion from a different angle. More holistically, we have a desire to bring beauty to all. The way we do it can be different by brand, but it comes from a drive and will to respond to that diversity. If you look at hair care, we have a total of 13 of brands within our portfolio, and one is Carol’s Daughter. In May, we launched the “True To Your Roots” campaign that speaks to the legacy of generation after generation learning how to take care of a woman’s hair from their mother, and that was the right way to speak to that brand’s customer.
L’Oréal has been able to withstand a lot of the difficulties within consumer beauty; what do feel is working best?
We are lucky that a lot of things are working quite well for us, so far. Our consumer division is the No. 1 player in the beauty market in the U.S., and L’Oréal Paris is the No. 1 beauty brand in the world. We played to our strengths in product innovation recently with our Revitalift product that has hyaluronic acid. We are selling one of our serums every hour, because it plays to the boom in skin care and derm solutions. Maybelline is also working well. We not only are No.1 in face and eye, but in the last quarter of last year, we became No. 1 in lip, so we are leading in the all the key segments in makeup. We are trend-driven, but we are showing that the brand is not about one specific product, but instead better innovations across the board.
How have Maybelline and L’Oréal, at large, been able to respond to the trends being put forth largely by DTC and indie brands?
Maybelline is resonating because we’ve been able to bring the right products to market, but also those that make women’s lives easier. If you think about our liner products this year, it was about long wear, and no matter where you are, it stays on. That is the same hard-working formula we wanted to adapt and make available with our new Matte Ink Crayon Lip, which is hitting stores right now. NYX is for the makeup junkie, so that brand plays to trends. But whereas two years ago, we were focused on heavy makeup and that look, we are shifting now to the idea of skin-ification and no-makeup makeup. Our Bare With Me line that we are launching for summer is focused on the natural look.
How has the blur in retail channels and the accessibility of being able to find mass beauty in more than the drugstore aisle helped your positioning?
Digital has changed the way we think about beauty, and we think of it as an opportunity. The shopping experience is all about being omnichannel — how do you make sure to be where the customer wants to find the brand? — and what we have online complements what is in store. We don’t look at the distribution channels in a silo anymore, so we feel like we are quite ahead. Garnier skin care is big at Ulta because our hero product, the Micellar Cleansing Water, is the most powerful cleanser for those makeup junkies wearing a lot of makeup. It makes sense that it is doing well in Ulta because their cosmetic business is their biggest.
How do you think L’Oréal can innovate on the shopping experience here in the U.S.?
There are opportunities to offer a better experience, both offline and online. We developed this concept internally called the Store of the Future that is tracking beauty shoppers before they buy, and we are working hard with our retail partners to find ways to bring it to life in stores. It has also been a year since L’Oréal acquired Modiface, and we know that virtual try-on is an immersive experience that customers know and love. We want to extend Modiface to all of our brands, so shoppers can experience before they buy. We just started using augmented reality for consumers on L’Oréal Paris products and are seeing that almost 10% of people coming to our site are using the tool. Next month, we will be revamping our virtual try-on for eyeshadow palettes on Maybelline.com. We see how much digital can enhance the beauty shopping experience and know it can be even more amplified to bring education and excitement to our brands.