L’Oréal seems to have truly lost its splendour in Argentina. The devaluation of the local currency combined with the impact of the COVID-19 pandemic has seen the multi’s business collapse in what has become a market of little significance for the corporation. One more sign of this new status is the decision to enter the direct seller catalogue channel. In what appears to be a word first, the brand has begun marketing its mass consumer brands through the door-to-door system.
Faced with plummeting sales, L’Oréal has entered a terrain that would previously have been unthinkable for the Paris–headquartered company that has always courted an association with Luxury, or at least glamour.
In Argentina, the company, which is led locally by Frenchman Jean-Noël Divet, has set foot in the direct seller catalogue channel. Perhaps as a sign of its new reality, it has signed an agreement with Vanesa Duran, a firm based in the province of Córdoba that specialises in the commercialisation of catalogue jewellery. See catalogue.
The brands Maybelline and Vogue, both within L’Oréal’s Consumer Products business, are already available for sale through the «door-to-door» system. But L’Oréal doesn’t seem to be giving a lot of corporate push to the initiative, which may indicate that it’s a test in order to analyse its scalability to other markets. At the same time, it gives the company the chance to disclaim responsibilities since sales fall under the umbrella of a partner, similar to the case with e-commerce transactions.
There’s an antecedent for L’Oréal entering the direct seller catalogue channel in the form of its participation in the Beauté Créateurs venture, which it launched in 1987 and was finally closed in the first semester of 2014 due to a drop in sales. It remains to be seen whether L’Oréal’s foray into the catalogue market in Argentina will bear fruit. One challenge it’s likely to face is pricing. In the catalogue of Vanesa Duran, the prices appear in very small typeface, going against the usual practice in catalogues that tend to put prices in giant type as one of their main deciding sales drivers. Pharmabiz compared the prices displayed in the catalogue with those at physical retail outlets and found a significant difference. Vogue liquid lipsticks at AR$ 790 (US$ 7.93) were priced at 14% more expensive than in certain benchmark retailers. Meanwhile, Maybelline Colossal Go Extreme mascara costs AR$ 1.150 (US$ 11.55) in the catalogue but sells for 52% less, AR$ 550,20 (US$ 5.52), in pharmacy chain Farmacity with a discount of 40% off applied. US$ 1 = AR$99.50 (official BCRA exchange rate Tuesday 12/05/2021 – 15hs)
