Carl Allain - After the arrival of Peter Lennox in February as the Group’s new CEO in February, we reorganized Arcade in major regions: North America, Europe, Brazil. To date, approximately 50 to 55% of out turnover comes from North America, 35 to 40% from Europe and 5 to 10% from Brazil.
We have a dozen sites around the world: North and South America, Europe and China. In Europe we rely on five production sites: four in France and one in Poland.
Premium Beauty News - With the emergence of digital, the sampling sector is now confronted to a real transformation.
Carl Allain - With the challenge of digital revolution, confronting us all, the beauty market is undergoing a complete transformation. And obviously this also has a direct impact on the distribution of samples. All cosmetics and perfume brands are now heavily investing in digital and the way samples are distributed will inevitably change. There is a shift from mass distribution to a more targeted and smarter distribution, aiming at a better return on investment.
This change is accompanied by a decline in the weight of the printed press, even if the specialised women’s press better resisted than the mainstream press. But brands continue to consider samples as a key to success in the cosmetic market. They all confirmed they needed samples to boost sales. It is a key element of the purchasing act. Samples as such, have therefore nothing to fear from the internet and the digital rise. But their distribution will change substantially.
Today all market players (brands, retailers, pure players, application developers, etc.) are seeking to create and consolidate customer databases. The sample will be a key element in this battle towards beauty digitalization.
Premium Beauty News - In this context, in which direction will the sample industry evolve?
Carl Allain - The strategy we have developed consists of four major thrusts: the development of mini products, the new needs of retailers, direct marketing and geographic expansion.
Demand for mini-products is rising sharply, it meets both the beauty to go trend that values travel-size products for women on the go, but also demand for cheap and easily accessible products. These products are in high demand among retailers, for their own brands that now have significant market shares.
Mini-products and samples also answer another increasing need from retailers: an intensification of the relationship with their clients. This already strong trend in the US is gaining momentum in France. Retailers today can rely on large customer databases, including VIP customers, and they are looking for ways to enhance further their customers’ experience, including by inviting them to try new products.
Direct marketing, a sector undergoing substantial changes, was heavily impacted by digitalization and it was given a new lease of life through new forms of synergies with the development of the internet and social networks. Today, direct marketing operations are more targeted, whether for the distribution of samples placed in the boxes sent on subscription, distribution operations related to online communications, or for the development of customer data bases.
Another important growth area for us is the development of our presence in different markets. Regarding Europe, we have a very strong foothold in France but we have significant room for growth in other markets, such as the UK or Germany. We have therefore decided to strengthen our London team. A Project Manager will join the two Sales engineers already on site to liaise with our factories on development projects. We also believe that the offer of Carestia, our French site in Grasse, which is specialized in perfumed paper samples and scented items, has a huge potential in North America, particularly in the context of strong market development the country is currently enjoying.
Premium Beauty News - Does this increasing product customization also concern the sample market?
Carl Allain - Of course! It is also a result of digitization. We are moving towards increasing product customization in all markets. In our case, this is particularly the case with labels, and this, at different levels: to interact more with customers, to better measure the return on investment, etc. That is why we recently invested in digital printing by complementing our population of printers on the French site of Socoplan Airvault with a latest generation digital HP Indigo 20000 printer.
Today, technical possibilities for customization and targeting are such, that an infinity of options can be imagined! With as a consequence, a reduction in the size of series. This is a general trend in the industry.
Premium Beauty News - Do you have more investments planned in the coming months?
Carl Allain - Investments in additional capacity are under way to update equipments and meet the highest standards in health and environmental matters. We are also investing in technology transfer between our different production sites. This is an important demand from our clients. The BeautiPod technology was for example transferred to Europe.