Sales-Floor Secrets

By Sarah Raper Larenaudie/Paris

SHOPPING FOR PERFUME with consultant Olivier Aron, whose Paris-based firm R.O.S.A.E. tracks cosmetics consumers' behavior for companies including L'Oreal, Guerlain and Estee 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. Lancome 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 Elysees 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-Scene 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.

Private Label Sephora's brand is its most profitable. It includes bath, makeup and skin-care products. The private label emphasizes choice and mass-market prices. On Aron's visit, the brand's display boasted 83 shades of lipstick, compared with 39 at the Gemey-Maybelline stand.

Makeup Like other beauty retailers, Sephora is eager to make room for niche brands by makeup artists because they appeal to trendy customers and help set the store apart. The perfumery asks big brands to ditch their "Boeings"--oversize displays--in favor of slim, curvy ones, in an effort to boost sales per square foot.

In-Store Animations Beauty companies long for the days when they ran the show: before Sephora rang up 20% of a prestigious brand's French sales and before Boots accounted for 30% of high-end beauty-product sales in Britain. So they vie for coveted weeks--before Christmas, Mother's Day and Father's Day--during which to host in-store events and conduct live product demonstrations. Staking out a corner of the store for a week allows individual companies at least some control.