Premium Beauty News - With a decline in sales of 0.9% in value, 2012 was not an exciting year for the selective circuit in France?
William Koeberlé - Unquestionably, the past year was rather disappointing. The selective circuit has declined, but it is part of a trend that began several years ago, with an erosion of sales volume, more or less offset by an increase in value. We can also observe that in the light of the current economic climate, this decline is not a cause for alarm.
In addition, you must look at all the data. Figures provided by NDP take into account only part of the sales in our circuit. Neither sales of distributors’ own brands, those of exclusive brands, nor Internet sales are taken into account. While private labels represent a growing proportion of sales in selective distribution.
If some brands in the selective circuit are indeed struggling, the ones which have innovated and managed to launch some interesting novelties have been very successful. I am thinking in particular of Clarins, Guerlain or Lancôme, but there are many more.
Premium Beauty News - How do you explain the continued rise of private labels?
William Koeberlé - The fact that they are very affordable makes them perfectly adapted to current needs. It is not only a question of price, they remain in the field of selective distribution with products that have a history and quality ingredients, but with a positioning which not challenged by major selective brands.
In addition, for retailers, it’s a way of attracting customers from other distribution channels. Selective distribution in France is the predominant circuit for perfumes. Sales of cosmetics and skincare products are more challenged, either by supermarkets or by pharmacies. Own brands are an important asset to encourage customers who have entered selective points of sale to buy something else than perfume.
Premium Beauty News - The openings of outlets offering alternative perfumes, brands little known to the general public, have mushroomed in recent years. Major brands themselves also launch perfumes with a very limited distribution.
William Koeberlé - It is interesting and of course we are closely following this, like we are following more globally what is happening in the market. For now, sales figures in these outlets remain marginal compared to the rest of the market. For the record, in France, 93% of women’s fragrances are sold in the selective perfumery circuit, versus 87% of men’s fragrances (according to NPD), and these openings reinforce this trend.
Regarding the limited editions from major brands, this is not a new phenomenon. Brands have long since developed perfume ranges the distribution of which was limited to a few corners or owned stores. This is also an important element in the construction of their image.
Premium Beauty News - On your arrival at the head of the French Federation of selective perfumery, you had set yourself three priorities: To maintain the regulation exempting selective distribution, the harmonization of practices in logistics, and negotiations on a new collective agreement to give new impetus to training. What is the situation like today?
William Koeberlé - The renewal of the block exemption has been granted since 2010. The challenge now is to ensure that within this common framework, the same rules apply to all. I am referring obviously to pure players who sell on the internet, in particular fragrances, paying no heed of European rules.
Regarding logistics, the joint working group set up with the FEBEA, (the French trade association representing cosmetic manufacturers) succeeded in adopting a manual of best logistics practices for the flow of goods and is continuing its work. This has allowed us to move ahead on traceability issues and on the procedures for the withdrawal of products in view of the entry into force of the new European regulation by July next, particularly to provide solutions to independent perfumeries.
Finally, concerning the collective agreement, discussions with the unions are continuing. One of the issues is to decide whether we will continue to work under a separate collective agreement or if we consider joining an existing agreement. My belief is that this agreement should stand as the backbone of this specific business of ours and that is should give prominence to training issues. This is important especially for employees in independent perfumeries who are only trained by brands.
Premium Beauty News - You mentioned online distribution, it was also the theme, during the last General Assembly of the FFPS, of the conference of the future of the sector, organised last October with the European federation of perfumery retail (FEPD).
William Koeberlé - In France, online sales represent about 2% of sales in the selective circuit. It’s a rapidly growing circuit, even if its weight is not yet significant.
Today, most of women from selective perfumery are active on the web: to compare, find tips and share views. The real change regards its position in the purchase cycle; 68% have visited a website before visiting one of our shops. Internet is now an integral part of our business in terms of both communication and sales.
But if the internet is a great tool for us, it can also represent a risk when websites outside the European Union behave like real pirates, with no respect for the rules in selective distribution or for those regarding the protection of clients or products’ traceability. Not to mention risks of counterfeiting and regarding product safety. The protection of our business goes hand in hand with the protection of our customers. Customers, brands, players, internet: all of them contribute to the evolution of the old model of selective perfumery.
