CONSUMER GOODS

Health, Beauty & Personal Care

What challenge(s) do our clients face?

Keeping pace with ever-changing trends and consumer desires in a highly competitive market

At Integration, we believe that no two clients and no two contexts are the same. However, in our experience working with more than 70 leading beauty and personal care clients across the world, we have observed some common challenges that underpin the category, particularly within the mass market.

Overcoming any one of these challenges can be the key to unlocking substantial and sustainable growth and fending off competition in what is a highly competitive market.

1 5 2 Beauty and personal care makers face rapid consumer demand changes and unrivalled speed of innovation, resulting in a continuous pressure to launch products in line with consumer demand. Simultaneously though, this increases even further the need for engagement with consumers, in a category where experience is core to success. Organizations must be able to keep abreast of consumer desires and create an innovation process internally that brings together external market inputs with internal capabilities to deliver successful products ahead of competition. Fuelling strong innovation In a highly innovative and shifting landscape, we see many companies opting for inorganic strategies. This movement has accelerated in later years, often as a mechanism to maintain or grow market share with previously unserved groups e.g. younger generations. These acquisitions tend to be highly complex and disruptive for the parties involved. Whilst challenges may be anticipated at the due diligence phase, further complexity often emerges at the post-merger integration phase where different cultures and business models come to the fore. Being able to maintain the desired differential of the acquired company, whilst at the same time capturing synergies though the integration requires simultaneous management of human factors (e.g. talent retention, pay disputes.) as well as technical ones (e.g. designing and implementing integrated commercial strategies, delivering logistics and manufacturing network consolidations at a global scale etc.) Capturing inorganic growth opportunities, whilst fostering existing assets and brands Consumer experience takes place across a complex and diverse ecosystem made of recommendations, lifestyle influencers, word of mouth, online and offline discovery, medical professionals, beauty advisors, celebrities and much, much more. This complex universe must be understood, so that a brand can influence and engage at the right stage of the customer journey in order to encourage brand affiliation, purchases and ultimately advocation. Managing customer engagement across a complex omnichannel landscape Beauty and personal care requires information and advice to be presented to the consumer to convince and influence purchases. This requires education to take place throughout the client journey; but achieving this successfully whilst guaranteeing depth and width in physical distribution is a challenge requiring a combination of technology, alignment across the supply chain, effective execution and team management. In their GTM organizations must strike the right balance between high distribution and consistency of market execution; both in the direct and indirect channels, as well as online and offline, whilst respecting the differences between the needs of categories. For example, depending on the number of categories and SKUs the GTM needs to tackle the necessity of having separate sales forces to guarantee selling and distribution of all the portfolio in different channels. Achieving high distribution with products that are often highly technical With such a wide range of product categories, consumer demands and geographic variances it is not uncommon for companies to build up vast and complex portfolios making it difficult to maximize profitability. Organizations must simultaneously keep a keen eye on both their consumers and their internal operating margins to manage this battle. Marketers should be clear on the purpose of the product in line with consumer desires, whilst finance must bring a clear view of the cost-to-serve ensuring that healthy and attractive margins are maintained across the chain, and across the P&L. Maintaining profitability across a wide and complex portfolio 3 4
1 Beauty and personal care makers face rapid consumer demand changes and unrivalled speed of innovation, resulting in a continuous pressure to launch products in line with consumer demand. Simultaneously though, this increases even further the need for engagement with consumers, in a category where experience is core to success. Organizations must be able to keep abreast of consumer desires and create an innovation process internally that brings together external market inputs with internal capabilities to deliver successful products ahead of competition. Fuelling strong innovation 2 Consumer experience takes place across a complex and diverse ecosystem made of recommendations, lifestyle influencers, word of mouth, online and offline discovery, medical professionals, beauty advisors, celebrities and much, much more. This complex universe must be understood, so that a brand can influence and engage at the right stage of the customer journey in order to encourage brand affiliation, purchases and ultimately advocation. Managing customer engagement across a complex omnichannel landscape 3 With such a wide range of product categories, consumer demands and geographic variances it is not uncommon for companies to build up vast and complex portfolios making it difficult to maximize profitability. Organizations must simultaneously keep a keen eye on both their consumers and their internal operating margins to manage this battle. Marketers should be clear on the purpose of the product in line with consumer desires, whilst finance must bring a clear view of the cost-to-serve ensuring that healthy and attractive margins are maintained across the chain, and across the P&L. Maintaining profitability across a wide and complex portfolio 4 Beauty and personal care requires information and advice to be presented to the consumer to convince and influence purchases. This requires education to take place throughout the client journey; but achieving this successfully whilst guaranteeing depth and width in physical distribution is a challenge requiring a combination of technology, alignment across the supply chain, effective execution and team management. In their GTM organizations must strike the right balance between high distribution and consistency of market execution; both in the direct and indirect channels, as well as online and offline, whilst respecting the differences between the needs of categories. For example, depending on the number of categories and SKUs the GTM needs to tackle the necessity of having separate sales forces to guarantee selling and distribution of all the portfolio in different channels. Achieving high distribution with products that are often highly technical 5 In a highly innovative and shifting landscape, we see many companies opting for inorganic strategies. This movement has accelerated in later years, often as a mechanism to maintain or grow market share with previously unserved groups e.g. younger generations. These acquisitions tend to be highly complex and disruptive for the parties involved. Whilst challenges may be anticipated at the due diligence phase, further complexity often emerges at the post-merger integration phase where different cultures and business models come to the fore. Being able to maintain the desired differential of the acquired company, whilst at the same time capturing synergies though the integration requires simultaneous management of human factors (e.g. talent retention, pay disputes.) as well as technical ones (e.g. designing and implementing integrated commercial strategies, delivering logistics and manufacturing network consolidations at a global scale etc.) Capturing inorganic growth opportunities, whilst fostering existing assets and brands

How do we help?

Tackling such challenges can be daunting and inefficient in the absence of clear objectives, concrete plans and the backing of the whole organization and its leadership. Technical expertise is fundamental to success, but so too is a team ready to push the change. We enjoy supporting companies in combining these two crucial ingredients.

We understand how to develop solutions and tools which can unlock growth (e.g. category management frameworks) or address operational issues (e.g. S&OP); and we know how to train your professionals so they can take these solutions forward and continuously improve.

This means we have an established track record of supporting our clients in their ongoing efforts as well as in specific moments such as a merger or divestment. With our knowledge of the sector, we are able to enter into depth in topics ranging from demand planning to point of sales (PoS) execution.

Clients

We have worked with clients in different categories, geographies and positions along the value chain:

WATCH TESTIMONIAL

In this video, a range of clients from the Health, Beauty and Personal Care sector talk about their positive experience working with Integration.  


Health, Beauty & Personal Care: What our Clients Say Health, Beauty & Personal Care: What our Clients Say

SUCCESS STORIES

CHALLENGE

A leading global Consumer Beauty company had reached a moment where they were experiencing high performance in Modern Trade channels, but significantly lower performance in the Indirect Traditional Trade channel. The company came to understand that it was drastically under-indexed in sales via distributors in key-opportunity regions, and a majority of sales teams were reporting problematic distributor relationships.

To combat this challenge, they asked for Integration’s support in developed a global methodology that could support their local operations and boost indirect trade results.

APPROACH

In our first phase of the Programme we built a solid foundation for sustainable change. This took shape as a detailed, bespoke “playbook” that was not limited to the needs of emerging markets, but instead offered commercial teams at all stages, ideas for taking their distributor relationships to the next level, including the ability to:

  • Map and select target distributors
  • Run complete assessments of distributor performance, financial health and operational capabilities
  • Design, implement and monitor annual plans to develop distributor capabilities and improve results for the client and its partners
  • Terminate relationships with underperforming or operationally inadequate distributors

The playbook balanced the need for a global approach with fitting the local realities of each market. From the outset, we developed the methodology in strong collaboration with the regional representatives in each continent.

Next came an implementation phase dubbed ‘local acceleration’; where we aimed to guarantee the practical, effective implementation across selected zones.

Over the course of four years we supported the practical application of the methodology across 12 vastly different countries (ranging from Pakistan to Peru), running training sessions and adapting guidance appropriately to local needs. Each of these countries represented diverse challenges, ranging from finance issues to process improvements to deeper strategic discussions.

RESULT

This highly tailored approach resulted in pragmatic recommendations for each market and enabled quick implementation. At the same time, the standard nature of the programme across countries made it possible to transfer best practices from market to market.

As a consequence of the successful implementation, sales by the distributor have outpaced growth in modern trade by 5 percentage points, thanks to significantly closer cooperation with distributors (e.g. (+123% Pay For Performance Agreements, +43% Joint Distributor Business Plans), while simultaneously reducing days of inventory by 16% on average.

CHALLENGE

Our client a large American multinational beauty company had recently acquired multiple brands in a strategic move to widen and grow its product portfolio. They had decided to integrate the Planning, Manufacturing and Logistics Network of the acquired companies in order to capture the foreseen synergies.

The consolidation process was extremely challenging because it required a high level of coordination across +250 professionals in +30 countries in Europe, USA, Canada and EMEA, +15 production sites and +75 distribution centers around the globe.

Moreover, the benefits related to this integration were desired to be captured as early as possible given the strategic importance to the company worldwide.

APPROACH

Given the accelerated timelines and complex challenges, a large Integration team was deployed to work full on site, bolstering the client team. This ensured close proximity with all stakeholders, on the job training/change management for staff, better communication across the countries and an ability to resolve unforeseen issues swiftly.

We assumed the project management responsibility of the Manufacturing Footprint and Distribution Centers consolidation programs preparing a detailed plan considering all involved regions, business areas and processes. To ensure the forecasted synergies would be realized, a robust PMO was deployed to track not just deliverables, but also operational objectives and benefits.

RESULT

We built clear action plans with the client which delivered up to 5% of accumulated cost savings over the next 5 years, supported by a detailed implementation roadmap coverin

We supported the client in delivering the integration in a very aggressive timeline with minimal business disruption. Including the closure of some manufacturing sites in addition to the transfer of production lines. In distribution, in just 6 months we coordinated the building and starting-up of distribution centers across multiple countries and managed the incorporation of 3rd party logistics.

Beyond the business implementation results, Integration ensured the engagement, alignment, and cooperation along the entire transition of the +30 involved countries. This ensured sustainable operational transformation after our team had rolled-off.

g production footprint, distribution and GTM expansion.

CHALLENGE

A global health and personal care company had redesigned their GTM strategy. However, they faced the difficult task of actually implementing it, given that the new design included:

  • a significant transformation to the indirect network
  • the creation of 4 different category clusters (each with its own GTM strategy)
  • moving the GTM approach from region only to region – channel – category cube
  • deep changes in commercial structure, channels and portfolio
  • high impacts to clients and professionals

In addition, the company had an extremely complex multinational organizational structure which made alignment and decision making even harder. The regional demands considering Brazil’s broad geography were also a challenge to be faced.

APPROACH

Integration supported throughout the implementation phase with three important highlights from our approach.

  • Firstly, Integration supported with the creation of a governance guided by a “Control Tower” which was then turned into a GTM area responsible for managing sell-in & sell-out results, communication for impacted channels and clients, routines, measurement of broken down results, revenue and discount management etc. – all with clear KPIs and dashboards.
  • Secondly, we went on roadshows from region to region with the client’s teams in order to validate the indirect network and portfolio movements with local leaders who knew the market reality.
  • Thirdly, our close stakeholder management approach was key for guaranteeing alignment and communication between local and international stakeholders, as well as training and preparing the internal team to be responsible for managing the Go-to-Market moving forwards.

RESULT

The project led to strong results, including a market share increase in 80% of categories and more than 20% growth in key categories. The new GTM area was in particular a success; creating the strong governance required to oversee processes, routines, KPIs and revenue management controls.

CHALLENGE

One of the largest Beauty & Personal Care organizations in the world had recently acquired a top performing Hair Care Brand worldwide, and intended to expand its footprint to the Brazilian Market. The organization needed to understand the market characteristics and dynamic in depth, as the acquired brand represented a new category, and the team were working towards aggressive global targets based on a successful launch.

APPROACH

We sequenced our approach as follows to gain clarity on a winning strategy:

  1. We started with a deep dive into the new category – through market research and internal data, we mapped the differentials that should be at the heart of the expansion strategy.
  2. This allowed us to define the brand’s key success factors, and by comparing these with international operations (US, UK), we could create a factbook evaluating the match between the brand’s identity and the Brazilian market reality.
  3. This formed the basis of the Brand Plan and Business Case, in which we translated key definitions into actions for launch – i.e. SKU definitions, right- and how-to-win, channel activation plans, and selling stories etc.
  4. These actions were incorporated into an implementation plan with the necessary governance, change management actions, and team, to ensure that the project would continue to be implemented successfully after our exit.

RESULT

The work resulted in a launching the brand in new geographies, with selected chains responsible for creating a halo effect, and causing the company to hit its volume targets 4 months in advance.

In addition, as the company had a history of poor performing launches, this launch helped the marketing team gain more space and connection with commercial and other internal areas of the company, setting the foundation for future success.

TALK TO US

Alice Maschera

Alice Maschera is a manager within Integration's UK operation. Alice is a specialist in the field of Marketing and Sales having supported numerous Consumer Goods and Retail companies in their market entry and commercial strategy. A graduate from the University of Cambridge, Alice is well-rounded and experienced across many of Integration's methodologies and service areas.

Andrea Aun

Andrea is a Founding Partner at Integration and is recognized as an important female leader among Brazilian executives, participating in the LIDEM (Group of Leading Entrepreneurial Women) Executive Committee. She is an expert within the field of Marketing & Sales and Retail and has led over 100 projects in these areas. She continues to be [...]

Carlos Lima

Carlos is the President of Integration and a Founding Partner. Carlos has worked with leading international companies across the globe as a consultant for the last 30 years and has developed a particular specialization in Marketing and Sales. He is considered an expert in the Consumer Goods sector and on the topics of Commercial and [...]

Daniel Rodrigues

Daniel is a Director within our Marketing & Sales practice and leader of Integration’s TechLab. Over the course of over 10 years with Integration, Daniel has helped clients from diverse industries and countries with digital and commercial challenges ranging from Go-to-Market Strategy to Commercial Due Diligence. Through his extensive business experience Daniel ensures that our [...]

Gerard Schoor

Gerard is a Managing Partner and has overseen the Mexico City office since 2008. Prior to Integration, Gerard accumulated 25 years of experience in executive positions at L’Oréal, The Colomer Group and Unilever in Europe, USA and Latin America. He has led global projects related to Organizational Development, Market Entry Strategies, Industrial Management and Strategic [...]

Hugo Ribeiro

Hugo is a Founding Partner at Integration and can count on more than 30 years of experience in consulting. Hugo, who holds a post-graduate degree in Business Administration from Harvard University, is a senior specialist in the area of Finance & Management and frequently leads projects in Organizational Structure, Strategic Planning, M&A, Improvement of Productivity, [...]

Jamie Gale

Jamie is a Partner in our office in London. He has spent more than 25 years in the consulting industry and private sector. Jamie is recognised for his extensive experience in digital, developing and executing strategies that enable business transformation. He has supported clients across Manufacturing, Retail, Telecommunications, Financial Services and Transportation with improving operational [...]

Luis C Vidal

Luis is a Managing Partner at Integration where, since 1999, he has been working in the Supply Chain practice. During this period, he has led projects in the most diverse sectors and in themes such as Logistic Optimizations, Process Efficiency, Planning (S&OP), Industrial Strategy, Go-to-Market Strategy and Distribution Structure. His international experience encompasses the opening [...]