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Companies & industry

’Our goal is to make domestic and imported fragrances and beauty products available to all’, Marcelo Poeppl, Riachuelo

Brazil’s largest fashion group has invested R$ 40 million in a new project to sell cosmetics and expects to end the year with over 160 beauty kiosks in its stores.

With almost 300 stores spread across the country, Riachuelo is celebrating its 70th anniversary in 2017 with a new addition to its product offer. The biggest retail chain in the Brazilian fashion business has decided to turn its attention to a new product category – cosmetics. The company has invested R$ 40 million in the launch of Fashion Beauty, a dedicated area within the stores where customers can find domestic and imported beauty products.

Marcelo Poeppl, Riachuelo's manager for cosmetics and fragrances

Marcelo Poeppl, Riachuelo’s manager for cosmetics and fragrances

In an interview with Brazil Beauty News, Riachuelo’s manager for cosmetics and fragrances, Marcelo Poeppl, talks about the idea behind the pilot project and the company’s plan to wrap the year with over 160 kiosks operating in the stores. He also reveals Riachuelo’s forecasted revenue for the new business division and comments on the strategy towards the competition in the retail sector.

Brazil Beauty News - What has led Riachuelo to invest in the cosmetics market?

Marcelo Poeppl - Brazil is the world’s largest fragrance market and the fourth largest global market for perfumery, cosmetics and personal care products. We saw a great opportunity in this field, especially because we already have a steady flow of customers, mostly female, in our stores every day. In addition to that, we have conducted several customer surveys that also pointed in that direction.

Brazil Beauty News - The new venture takes place when Riachuelo’s founding group celebrates its 70th anniversary and Brazil goes through harsh economic times. Does it have an impact on the company’s plans?

Marcelo Poeppl - This expansion strategy was designed about two years ago and the pilot project was tested in five stores in Sao Paulo in the second half of last year. The result supported our decision to go ahead and grow the program. In times of economic hardship, beauty and perfumery are among the product categories that are the least affected by drops in consumer confidence levels. Cosmetics are often regarded as a “special treat” that helps customers get through difficult financial periods, the so-called lipstick effect.

Brazil Beauty News - How many stores should see Fashion Beauty as part of their operations?

Marcelo Poeppl - Since the start of the pilot project, Fashion Beauty has been launched in 66 stores. Another 100 stores are expected to join the program until the end of the year. In the long run, the idea is to have a dedicated space for beauty and fragrances in every store.

Fashion Beauty kiosk

Fashion Beauty kiosk

Brazil Beauty News - How were the products selected?

Marcelo Poeppl - The brand selection process was based on the results of the survey conducted with our customers before the beginning of the project as well as extensive market research focused on understanding what products and brands are more aligned with our values. We have also analyzed local purchase patterns, which have allowed for a more accurate product mix for each store.

Brazil Beauty News - In addition to products made in Brazil, Riachuelo is also offering imported cosmetics and perfumes. Do you think your customers are looking for more added-value products?

Marcelo Poeppl - Absolutely. Just like our approach towards fashion, our goal is to make both domestic and imported fragrances and beauty products available to all.

Brazil Beauty News - Cosmetics are expected to account for what share of the company’s total net sales?

Marcelo Poeppl - In the medium term Fashion Beauty should account for 5% of total sales in each store.

Brazil Beauty News - Renner is currently the largest chain for imported fragrances in Brazil, according to Segmenta Research. Is Riachuelo poised to compete directly with them?

Marcelo Poeppl - Our goal is to become a leader in sales of imported fragrances across the country. We entered this market to compete directly with all retailers operating in the beauty business. We also aim to be our suppliers’ largest retail client in our areas of activity.

Renata Martins

Portfolio

© 2017 - Brazil Beauty News - www.brazilbeautynews.com

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