Sales-Floor Secrets

Wednesday, Mar. 08, 2006 By SARAH RAPER LARENAUDIE/PARIS

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SHOPPING FOR PERFUME with consultant Olivier Aron, whose Paris-based firm R.O.S.A.E. tracks cosmetics consumers' behavior for companies including L'Oréal, Guerlain and Estée Lauder, is like going to the movies with a director. In Casablanca, you may see Ingrid Bergman and Humphrey Bogart romancing, but the director sees a wide-angle close-up sequence. Aron's passion is prowling the aisles to understand what makes shoppers reach for their wallets. At a Sephora perfumery in central Paris, for example, Hugo Boss's new men's fragrance, Energize, is thoughtfully organized on stand-alone shelves complete with dipsticks for sampling. Don't be fooled: that little five-shelf contraption known as a breaker column—positioned so that it masks competitors' brand names—is expected to give sales a lift. It costs $7,200 a month to place it in 180 French stores. Aron walks me through the perfumery, a chain he knows well because he once managed purchasing and marketing for the company's founder, and reveals some of the secrets behind fragrance and cosmetic sales.

Power What counts at Sephora is the descente: the six shelves, top to bottom, that allow one brand to dominate a vertical display area. To figure out which brands rule in France, forget marketing studies. Just check the Sephora wall, where Chanel and Dior grab a whole descente, plus half of a neighboring one, totaling nine shelves in the women's scents department. Lancôme and Yves Saint Laurent tie for second place, with eight shelves. The ones at eye level are the most productive, and that's where you'll find a new fragrance launch or a company's tried-and-true big seller.

Special Attention Brands pay to be featured on tables and display stands along the store's corridors. In France, they pay as much as $143,000 (plus an extra $9,600 at the Champs Elysées flagship) for 15 days of placement in all stores during peak periods. If successful, increases in sales can top 50%.

Top 10 In an effort to liven up the shopping experience, Sephora borrowed from music stores the idea of "Hits" displays to show off top-selling fragrances and "New" displays to highlight launches. Although its parent company, French luxury-goods conglomerate LVMH, also owns several beauty brands, competitors say Sephora is fair about who makes the cut.

Mise-en-Scène The grand entrances gracing the front of Sephora stores are supposed to emphasize the idea of a "theater" of beauty.

ABCs Fragrances account for 60% of sales at European Sephoras (makeup is tops at the U.S. stores). Founder Dominique Mandonnaud decided to alphabetize products by brand name, because he wanted to make them "more equal." The best exposure goes to fragrances that fall in the middle of the alphabet, which is why Yves Saint Laurent fought to be placed under S instead of Y. The paradox: "No brand stood out anymore in-store, so only those which spent the most on advertising could thrive," says Aron, noting that Sephora has reversed the policy and now accents niche brands.

Enemies They're everywhere. Monobrand stores like L'Occitane and Victoria's Secret Beauty (sales top $850 million in the U.S., where there are already 507 stores) enjoy higher margins than multibrand beauty retailers. Aron predicts other fashion labels will jump on the trend.