Catching Up with Michael Ferrara, SVP, Marketing, Coty Beauty U.S.

CGT Executive Editor Kara Romanow catches up with Michael Ferrara, senior vice president, marketing for Coty Beauty U.S., and gets his perspective on good category management, how to reinvent the shopper environment and some best practices for managing acquisitions.

What keeps you up at night?
Ferrara: The slowing economy; a number of factors are coming together that I believe will suppress consumer confidence and spending for the next few years. I don't think we're headed for a recession, but definitely a sustained period of little or no growth. Therefore companies are going to have to innovate and be faster than competition to win in a very tough environment.

I think Coty is ideally positioned to continue our record of success in recent years. People are finding it more difficult to indulge themselves on big ticket items. More than ever, our consumer wants to reward and pamper herself with affordable luxury. We offer her an incredible range of celebrity, designer and lifestyle brands -- most at very affordable prices. We've grown from a little more than $1 billion to $4 billion in sales in the 10 years I've been at Coty. The key now is to not lose our edge and the competitive advantage that got us here. I'm confident we can maintain the entrepreneurial spirit that drives the company. The CEO and executive team at Coty have worked hard to create a "move faster, drive yourself further" culture, and we live it everyday!

How do manufacturers and retailers better collaborate?
Ferrara: Without a doubt, trust is most important. I'm very proud of the category management program we have here at Coty. Being part of the group that helped develop the principles of category management back in the ECR days of the early 90's, I'm a big believer in the need for objectivity as a manufacturer. It's essential to build the credibility necessary that leads to trust on the part of our retail partners.

Trust is crucial because the key to better collaboration is the sharing of the intellectual property we both have. We own the consumer knowledge of our brands and the retailer owns the consumer knowledge of their customers. Marrying those two distinct and important pieces of information allows you to maximize the opportunity we both have for sales and profit. That's true in terms of driving everyday sales, maximizing new product potential by door, or on promotions. As I develop our marketing plans with the team, we invest significantly in consumer research to ensure our concepts are on trend and compelling for the consumer.

What's the most exciting thing you're working on?
Ferrara: My No. 1 one priority right now is working with retailers to reinvent the shopping environment. We need to create a more engaging and entertaining retail experience. Being the category leader, we have unparalleled consumer information on shopping behavior, which has helped us design some great in-store concepts. The ideas simultaneously address improved shopability and theft.

Lighting, testers or an ability to smell the product, seeing the beautiful bottles and visuals are all key triggers to purchase. They dramatically help improve the shopping experience for fragrance by making the department much more engaging for her. She wants to be rewarded and pampered a bit while shopping. Improving the shopping environment for fragrance and beauty overall creates a destination and sanctuary for her. Beauty is a great image builder for the retailer and helps drive customer loyalty for their store. We have a number of tests either underway or soon to be underway.

I'm confident we are very close to reinventing the shopping experience for fragrance at retail.

Coty has made two fairly big acquisitions in the last three years. What are some best practices or lessons learned on managing acquisitions?
Ferrara: We've been hugely successful moving quickly to merge these organizations into ours to maximize the synergy of the two companies. We benefited enormously from the gains in scale and efficiency. UCI helped increase our size and strengthen our position in the prestige fragrance business. Now with Del Labs, we'll see the same thing in the U.S. color cosmetics business.

In addition to the speed of the merger, a major key to success is making a real effort to take the best of both cultures. It's been great assimilating with the Del people. I'm having fun beginning to work with Del's marketing leaders to fully leverage the strength and power of our combined advertising dollars and making our media efforts work even harder for us. Their intense, competitive, analytical, "roll up your sleeves" results orientation has been a nice compliment to our dynamic, fast growth and entrepreneurial culture. We're now the No. 6 beauty company in the United States, and the top five better watch out! There's a lot more to come!