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Peter Marshall Send an email November 1, 2023
13 minutes read

Vincent Boinay Reflects On 8 Years At L’Oréal Travel Retail

Introduction by: Peter Marshall

Vincent Boinay needs no introduction, He has spent 8 years at the helm of L’Oréal Travel Retail and has overseen tremendous growth of the business in that time. I caught up with him at TFWA in Cannes for an exclusive interview – his last for Travel Retail – before he heads east to head up L’Oréal North Asia and China. He is as passionate now about the business as when he first took up the reins and this is an illuminating interview as to the robustly healthy state of the L’Oréal Travel Retail business that he leaves as it is for his views on the direction Travel Retail needs to take.

When I asked him how he would like to describe his legacy, he simply says: “We had a good time, no?”. Typical of the man, showing humility against a backdrop of great success. And humour, too. This interview is one of the best I have conducted and makes for a compelling read.

Peter Marshall (PM): Vincent, welcome to trunblocked.com. I guess this is kind of a hello and goodbye because you are moving to pastures new – President of L’Oréal North Asia and CEO of L’Oréal China. Many congratulations on these appointments, but of course you won’t get to see quite as much rugby!

Vincent Boinay (VB): Thank you, Peter and thank you for having me on trunblocked.com. I will only be leaving after the World Cup, so I will be watching rugby intensely up to when I leave. Yes, indeed, it’s a hello and goodbye. ‘Hello’ because we are together here today in Cannes, and ‘goodbye’ because I will be leaving Travel Retail in a couple of months. And with a bit of feeling because I do like Travel Retail a lot. It’s a distribution channel with an energy like no other, I can tell you, and especially – you’ve been in the business for a long time – we have been through very turbulent moments. The flight has been bumpy – post COVID, the war in Ukraine and with the Daigou crackdown this year – with all the events we had over time. But, at the end of the day, we are extremely resilient, we are still here alive and kicking and still stronger than ever. And we can feel it this year in Cannes – the industry is stronger than ever.

PM: It’s interesting that you say that because, as far as the company is concerned, in the past two years, you’ve actually widened the gap with the competition to become the undisputed leader in the global beauty industry. Do you think that L’Oréal Travel Retail follows the same trend or has it lost some market share against some of the entrants to the channel – in spite of the fact that you lead the business.

VB: So we are leading the business as well in Travel Retail – it just depends what scope of business you are looking at. And as far as the Travel Retail and the airport and the international traffic business is concerned, we are strengthening our market share. And why? Because we have been implementing for many years this idea of Beauty For All travellers. Because the big idea today in our business  is to make sure that traffic is growing as fast as the market, therefore penetration and conversion in stores are going at the same speed. And you can only do it if you have an offer for everybody, and this is the strength of L’Oréal and the strength of our portfolio of products.

PM: It’s accessibility for everyone.

VB: It’s from luxury to accessibility, it’s from dermocosmetics to hair care, it’s an answer for all beauty routines, all people, all ethnicities and all purchasing power.

PM: Interestingly, the TR division has now become a separate trading entity, as I understand it. What was the rationale behind this?

VB: There is no particular rationale because it doesn’t change anything. It’s purely to have a legal entity and to separate the entities that we have in France, that’s it. It doesn’t change anything for the customers, for the travellers, for the retailers and for us.

PM: Let’s go back to the brands, and you have a robust portfolio. We are here today seeing the best of them, although not all. I guess you would say that growth has been organic, or has your current market leadership resulted more from some of the remarkable acquisitions you have done recently, over the years, like Kerastase, Vichy, La Roche Posay and, of course, Aesop?

 

VB: It’s a bit of both in Travel Retail because, as you probably remember when I started back in 2015, it was mainly a luxury activity. And we said, with the group management, that we wanted to build a L’Oréal multi-division Travel Retail organisation. And this is when and where we started Kerastase, Vichy, La Roche Posay, Skinceuticals today, and with L’Oréal Paris getting stronger.

 

And this is this idea of Beauty For All. So it’s an in-between organic and an addition of brands within the portfolio.
And yes, we are adding new brands on the way. One is going to be Aesop, you’re right, and it’s going to be very exciting, it’s very promising, and Travel Retail can be a fantastic window for the brand.

 

But there’s also Takami that we acquired around three years ago, I think, and so it’s absolutely fantastic. And this is the beauty of L’Oréal – we grow organically and we add new brands or we add divisions where we are not present.

 

 

PM: I remember last year, sitting here in your great exhibition space, where you said that this company was a bit like a dinosaur. Dinosaur no more? How agile are you?VB: I said two things. This company is a dinosaur and a unicorn at the same time. And that, again, is the beauty of L’Oréal. Why are we a dinosaur? Because we are a 114 year old company, so you can compare yourself with a dinosaur, you can sometimes be perceived as a very old company not moving fast enough. But actually it’s totally different and that’s why we are a unicorn as well. Because, as I said this to the retailers we met with on Monday – in digital, data, tech – here we have been moving faster than many, many small start-ups and small companies. And this is where L’Oréal has this duality of being a strong dinosaur, very powerful, but at the same time moving at the speed of a start-up and a unicorn.PM: Yes, you seem to be remarkably entrepreneurial at the speed at which you manage to do things. So, moving on, Beauty Tech, which you are most proud of, your flagship signature as it were, is a very catchy and a very strong phrase. How does it translate into L’Oréal’s overall business model?

 

VB: So, Beauty Tech is what you discover here in the exhibition space of L’Oréal. As a customer you can have a virtual trial on a counter, for example, or you can have a skin diagnosis with Skinceuticals or a scalp diagnosis with Kerastase. These are a few examples of what Beauty Tech is about.That’s for customers. But Beauty Tech is also for ingredients, science, new AI capabilities, new developments. I recently attended an incredible meeting about Metaverse, what could be tomorrow, what Artificial Intelligence can bring to us. It’s only the beginning of an incredible adventure, and this is where L’Oréal is the strongest company of all. We embrace technology – Beauty Tech and everything –  but we control the development of it. We don’t go full speed without knowing, and that’s part of the strategy of the group.PM: Just going off on a tangent briefly. You have an investment business as well. I think there is something you have recently activated in China, it’s called Shinehigh?VB: It’s a biotech company. I’m not a specialist and I will discover more when I will be in China.PM: But it’s symptomatic of the way you think as a business.

VB: And this is the way of the business today. Before, and I don’t want to over-simplify, we were buying one brand to add it to the portfolio. Today we are taking participations in other companies that are linked to our ecosystem, with our beauty ecosystem. And we don’t have to be the majority stakeholder, we can be just one shareholder among others – as long as it has a link with our beauty industry.

And this is what we call BOLD – it’s: business opportunity for L’Oréal development – this is the fund we have created.

PM: So let’s just stay with China for the moment. Travel Retail globally has been largely dependent on the Chinese traveller since 2010. Now with COVID and other dynamics, what are L’Oréal Travel Retail’s plans to diversify to reach different nationalities in developed markets such as France, the UK, for example –  and not be as dependent on the Chinese?

VB: Yes, exactly, and this is what we did post-COVID, and this is why I am saying we have been building back better in the Travel Retail industry. Because you are right, we have probably been too dependent on Chinese shoppers travelling the world and finding prices more affordable than in China. Today it’s no longer the case, and today we are dealing with regional passengers and we need to activate them differently. That’s why, by the way, we have signed a worldwide partnership with Trip Advisor. And we’ve done an amazing activation with Americans during Spring Break, we’ve done a great summer activation in England for people travelling from Heathrow and we’ve done an activation with Dubai, too, as examples. We are way more international than before and we are far stronger.

But it’s also a question of product, assortment, brand differentiation and to be relevant everywhere. And if I may say, the world of Travel Retail is becoming more complex than it was before, and it’s for the good.PM: Yes it is, indeed. So where, then, do you see sustainable and strategic growth opportunities for L’Oréal in Travel Retail?VB: I see sustainable growth opportunities in all categories. We are extremely strong in fragrances, and within Travel Retail it’s key because, especially in the west part of the world, it’s 65%-70% of the business. And we see it lately from MYSLF from YSL that we have an expertise like no other to win in this category.

 

But sustainable development is only possible if you play in all categories – make-up and skin care as well. Plus if you have this capacity to be relevant worldwide. And this is why again I am insisting that beauty for all travellers is paramount to the development of the world. Y It’s very interesting, airports are probably one of the best places in the world, one of the best moments you can spend when travelling, and especially when transiting. Not for everybody, and we need to make this dream accessible to all, and Beauty For All has an answer for all travellers. This is the big idea that is going to make L’Oréal sustainably develop over the years within Travel Retail.PM: And what of the brands themselves? Of course all are important to you, but which are showing the greatest traction currently?VB: The greatest traction is coming from fragrances and especially some niche fragrances. I will name Maison Margiela as one of them.PM: Yes, we want to do a separate story on that brand – that’s an interesting brand.

VB: Maison Margiela – it’s this memory in a scent which is absolutely fantastic and it’s flying. But we see Yves Saint Laurent flying as well, and it’s this idea of having a couture brand object in your purse. There are plenty of examples like this. We also have some dermocosmetics brands like Skinceuticals and La Roche Posay – they are skyrocketing because of the dermocosmetics trend we see worldwide. So there are plenty of dynamics according to the trends, the markets and the customers.PM: And Prada, too.VB: And Prada, too. So you’ve seen Prada Beauty. It’s an amazing launch, and we were with Duty Free Shoppers right before this interview and they have not seen such a great launch in beauty –  and especially make-up – these days. So it’s very promising.

PM: It’s the texture of the lipsticks that is so extraordinary.VB: This is L’Oréal. Quality is our obsession.

PM: Ok, so let’s briefly just go back to Aesop which is the most expensive acquisition to date by L’Oréal. I can see it is tremendously synergistic with the umbrella of the business. What different dynamic do you think L’Oréal will bring to the party – inheriting as you will some beautifully designed and executed retail shops.

VB: It’s a little early, Peter, but what L’Oréal will bring to Aesop is a capacity to internationalise at scale and in the coming years. And what probably will take 4 to 5 years to L’Oréal would take 10 to 15 for Aesop alone.

PM: Fast tracking it, yes. Now, moving on, Lancome is the biggest brand in the luxury market – the crown jewel of L’Oréal Luxe – as it is the only brand which has equally-distributed strength in perfume, skincare and make-up. Since the launch of La Vie Est Belle in 2012, we have not really seen anything – although we have seen something today – like as successful a product. What is happening with that brand that will make it more exciting and will resonate with the market once again?

VB: The Lancome brand is stronger than ever and, if I may, it’s not just a question of product, it’s also a question of brand development. And when you see the Lancome and Le Louvre association, when you see the Lancome signature of beauty is a living art, it means so much and it’s so powerful that only a number 1 in the world can do it.

And you’re right, since La Vie Est Belle we have not launched new fragrances. But why do we need to launch a new fragrance if you have a customer base that is so faithful, that is so in love with your brand? You just need to pay attention to your customers and to keep developing the category or a franchise or a name and to make them happier every day. And this is the philosophy of Lancome – it’s happiness and it’s super important.

PM: So what exactly will happen with the Louvre connection? What will you do with that?VB: It’s an incredible partnership and I had the chance to be invited to a gala dinner in Le Louvre with all the friends of Lancome and Le Louvre. It’s an incredible partnership where two French icons are meeting and we have been developing a specific collection. These are outstanding products with outstanding communication. It’s a unique association, it’s unequalled, and it’s a moment where you are talking to your fans, customers, influencers, KOL’s – and they all like it immensely. So it’s good for the brand, it’s good for tomorrow, it’s good for everybody.

PM: That’s one to watch, for sure, and we will be hearing more on this from Baptiste, I know. So, it’s another year at TFWA in Cannes with yet another fantastic exhibition space created by your team. Let’s just take a quick look at this video showing your space here.
Now, and just following up on your discussions with your retail partners, are they moving beyond the usual subject areas of margins, price promotions and gifting? Do you actually think that partnerships are as genuine as they can be? VB: They can be better, and you are touching on probably one of the most important topics for the industry tomorrow. It’s this idea of Trinity, this idea of creating value together with airports, retailers and suppliers that’s absolutely paramount. I said it, and I repeat myself, but I strongly believe that Travel Retail can double in size if we work well tomorrow.

One number, and only one. Conversion rate today in Travel Retail/Duty Free.

PM: It’s half what it used to be.

VB: It’s 10% to 15%.

PM: That’s poor.

VB: So you see the potential if you do business right and if you provide customers with what they want and when they want it and with the relevant experience. But for that we all need to work slightly differently. It’s not just traffic x penetration x conversion. It’s a bit more complicated and we need to enlarge the marketing we are doing all together. But for that we need to fuel this industry. If you do it right, we can double the size.

PM: Vincent, you’ve been at the helm of L’Oréal Travel Retail for 8 years. How would you like your legacy to be described? 

VB: We had a good time, no? I don’t want to leave any kind of legacy, but what I think is that we need to keep a kind of family spirit with an international flavour and with this, and you said the word, this ‘entrepreneur’ spirit in everything we do. This is Travel Retail. And, at the end, what’s most important is the people you are developing around the world. And I had the chance to work with plenty of talented people and also with plenty of talented retailers. And this is the strength of Travel Retail. It’s not my legacy – this is the essence of Travel Retail.

PM: That’s an interesting and really quite a humble response because you’ve actually made some enormous changes to the L’Oréal Travel Retail business and to this business as a whole. People are learning from what you are doing. OK, final question, if there are three things that you wanted to say to the industry, three things that you haven’t already covered in this conversation, what would they be?

VB: Oh, the first one, immediately, is: be more sustainable in everything that you do. Because I mean this is the big ambiguity of Travel Retail. We are sustainable in many areas – the airlines are doing amazing things, airports are changing, we are changing immensely. But we need to tell the world what we are doing and we need to act. And quickly. Sustainable acceleration is key.

The second topic I would like to say is embrace customer-centricity. And for that one key element – data exchange. The more we exchange data, the more intelligent we will be and the more we will grow the business.

And last, be obsessed by people and in developing people. That’s the essence of Travel Retail – smart people everywhere.

PM: Vincent Boinay, thank you for your time. I wish you continued success in your new role. Many congratulations.

VB: Thank you very much, Peter. Thank you for having me today.

 

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Peter Marshall Send an email November 1, 2023
13 minutes read

Peter Marshall

Founder: trunblocked.com/Marshall Arts
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