Kiehl’s, major accelerating growth driver for L’Oréal in the US
Acquired 17 years ago by L’Oréal, US brand Kiehl’s contributes annually to the Group’s success and this year broke the symbolic barrier of $1 billion in sales. General Manager Worldwide, Cheryl Vitali talks to us about Kiehl’s success and dynamic growth since the acquisition by L’Oréal.
An exemplary American acquisition
“The Kiehl’s purchase was primarily a strategic acquisition for L’Oréal”, says Cheryl. This singular brand of cosmetics has long enjoyed a plum position on the US market and for good reason: “Kiehl’s holds a special place in American culture and history. It success flows from its authenticity, skincare expertise cultivated over 166 years, deep New-York roots and the strong relationship built with its customers since its very beginning”, she explains.
Founded in an apothecary’s shop in Manhattan’s East Village, Kiehl’s has been selling unique, effective, herbal formulas since 1851. Most of them are derived from the herbalist and traditional pharmacopeia, including Original Musk and Blue Astringent Lotion, which came out in the 1960s. Over the decades, the brand has forged a close relationship with its customers via word of mouth. “Since the very foundation of the business, John Kiehl used to provide free consultations and personalised remedies to assist customers”, says Cheryl. This authentic brand has always stood out from the crowd with its strong community roots and became in the 80’s an iconic New-York brand thanks to its effective formula and trendy image.
Won over by the brand’s unique and diverse ethos, L’Oréal bought Kiehl’s in 2000 and began a campaign to put the brand on the world map. Within a decade, Kiehl’s went in a record time from being a local to a global brand. “In ten years, sales skyrocketed. We had just one US store in 2000; now we are present in 61 countries and boast more than 2,000 points of sale worldwide”, explains Cheryl.
Kiehl’s exports its original model worldwide
The real challenge was, as Cheryl puts it, “to grow and export the Kiehl’s way without changing it. We soon realized that we needed to stick as closely as possible to our business model on a global basis, to create a consistent Kiehl’s experience around the world. We also chose to focus on establishing Kiehl’s as a facial skincare “expert””.
In order to do so, L’Oréal kept the brand’s identity and its distribution model, setting up its distinctive stores. In each country, Kiehl’s develops its brand in eclectic and trendy neighbourhoods that resemble it: “In “The Marais” of Paris, in Samcheoung-dong in Seoul and on Regent Street in London.” Store design echoes the one of the original pharmacy “with brick walls hung with old photographs, our Kiehl’s customer service representatives, or KCRs, dressed in lab coats, and in the entrance, you’ve got the iconic teaching skeleton, Mr Bones, next to the famous Harley Davidson motorcycle”, explains Cheryl. The key is to embody the spirit of the East Village brand. “Our customer representatives are prescribers. They provide consultations lasting more than five minutes, help select formulas specific to the individual’s needs and offer complimentary samples so our customers can try the products before they buy.”
Last but not least, the philanthropic commitment of the brand is also a source of recognition. Kiehl’s has long given back to local communities through its Kiehl’s Gives platform, with at least one charitable programs in every market around the world. “In China, we support Shan Shui Panda Conservation Fund to protect their treasured pandas. In France, we are partnered with Enfance et Partage, a charity that works to prevent the mistreatment of children and in the US, we support the HIV/AIDS cause amfAR through a motorcycle event called Liferide”, says Cheryl. The brand also develops global philanthropic programs with partners like Brad Pitt, Alicia Keys and Pharrell.
Digital, a key success factor to seduce abroad
In addition to the international deployment, digital has played a major role in Kiehl’s rise since the takeover by L’Oréal in 2000, with online sales showing the brand’s fastest growth. Digital has become the ideal way to reinforce this privileged relationship of authenticity and proximity with its consumers, which is so important to the brand. “It enables us to get to know our customers better and interact more effectively with them, while remaining true to the brand’s rebellious and offbeat style”, says Cheryl, citing the example of “Cremaholics” video campaign. “Cremaholics is a highly strategic digital campaign born out of Kiehl’s Spain with the goal of reaching new audiences and re-engage existing customers. Using humor celebrities and influencers confess their addiction to Kiehl’s products. This campaign had 7M social impressions, 1M views (on Youtube, FB and IG) and will roll out in the US and in Europe this summer and early fall.”
What’s next after the billion-dollar turnover?
Kiehl’s is one of the Group’s fastest growing brands and in 2016 broke the symbolic $1 billion sales mark. “That’s almost 25 times higher than before the takeover”, explains a delighted Cheryl. Buoyed by the success, Kiehl’s does not plan to rest on its laurels. The next stage will be to expand in Latin America and the Middle East and consolidate the brand’s skincare positions. “Since being acquired by L’Oréal, we have joined the top-ten skincare brands. Now we are looking to be number-one. To get there we will need to pay even closer attention to our customers. After all, that has been the secret of our success for the last 160 years.”