January 01, 2014
Innovative Longevity: Oriflame’s Sustainable Success as a Global Beauty Leader
by Beth Douglass Silcox
Laughter arose from the crowd some 15 years ago when a well-seasoned direct seller made a seemingly strange prediction: “One day people will look back at these times and laugh, saying how fun it was when people were shopping in stores.”Magnus Brännström, CEO and President of Oriflame, remembers very clearly watching the video of this executive and the people’s reaction. He says, “It seemed like such a crazy idea that we would not buy in stores, and now I cannot stop believing that he will be right.” Back then, Brännström was new to Oriflame, a global stronghold within direct selling’s beauty category, with corporate offices in Luxembourg and Switzerland.
But technology was changing everything and amping up an impending change in consumer expectation about how they would purchase products. Today’s consumer demand for convenient, online access to products was foretold all those years ago. “The future is in the hands of direct sellers and new technology,” Brännström says.
Oriflame, like so many others, is working to marry online shopping with traditional direct selling through a web-based, content-driven pilot program that extends the reach of the company’s international network of independent consultants. The goal is to capture market growth, and Brännström heads the effort as the company’s chief executive.
“We truly believe in the future of direct selling and all the technology we have, and of them joining seamlessly in the way we look for customers or consultants and representatives. It is also a winning team for producers and companies,” Brännström says.
Longevity’s Wide-Angle Lens
With a tremendously successful 46-year history operating in the world arena—yet not the U.S. marketplace—Oriflame’s reputation is one of longevity and sustainability. So it’s little wonder the company looks to advancing technologies through a wide-angle lens. “It’s a long-term game,” Brännström says.
Oriflame creates first-class e-commerce stores for more than 3 million independent consultants in 60 markets around the world. Consultants reach out to people they know through social media or physical meetings and offer them online shopping experiences. Sounds familiar, right? But Oriflame differentiates itself by taking their online relationship with consumers a step further.
“We believe that the home page needs to offer something more than just a product and a price, so we have our journalists working with us on beauty and on trends and so forth,” Brännström says.
Putting Oriflame products in the context of a magazine-style feature article on a home page ultimately benefits the product by making it more interesting. Consumers are more likely to buy an interesting product, and they will revisit the page looking for inspiration time and again. “That helps in the recruitment of consultants, and it shows you’re inviting someone to a leading beauty brand. That’s a big and important strategy for us going forward,” Brännström adds.
Paradise Eau de Parfum
The intention of integrating this journalistic content is to focus on the broader goal of becoming a trusted source of information on beauty with quality advice on products and lifestyle, which is a long-range marketing strategy. While it supports Oriflame’s products and business opportunity to improve recruitment and sales over time, short-term recruitment could be an added bonus. Consultants are able to direct prospects to the content-driven site in order to validate the company and what it has to offer.
“It’s not doing anything for the business short-term. The consultants you have, they have already reached out to their friends and made contact with their customers,” Brännström says. “But going forward with new people, we believe it’s the way to go.”
Growing Up Together in Sweden
Once upon a time—think pre-1967—cosmetics and skincare products were an elusive and confusing upper-class luxury in Sweden. “Retail in Sweden in those years in beauty could be very intimidating with very beautiful women in the store,” Brännström says. “Many consumers felt uneasy about walking in and asking those very beautiful retailers how to use a product. But when direct selling brought those products into homes with friends, then it was easy and more Swedish women started enjoying the whole concept of beauty.”
In many ways, the Swedish beauty market and Oriflame grew up together thanks to the efforts of brothers Jonas and Robert af Jochnick and their friend Bengt Hellsten. They combined a Harvard Business School education about a new distribution model called direct selling and a little experience at Electrolux and beauty products with a Swedish twist.
“From the beginning, the founders understood if they wanted to be successful selling beauty products, they had to be unique. For them, the uniqueness became natural Swedish cosmetics,” Brännström says.
Oriflame became famous for not only respecting nature by eliminating product testing on animals—a common beauty industry practice at that time—but also using natural ingredients from fruits, flowers and plants to produce functional, simple and elegant products. “Sweden stood for quality, honesty and good values,” he says.
Fast-forward several decades and those natural principles still hold true, but Oriflame now interjects the best science has to offer as well. Recent products like Ecollagen [3D+] targets wrinkles using tripeptide complex, hyaluronic acid, plus natural oils. This innovative product recreates skin’s natural collagen. And last fall, Oriflame began investing in pioneering plant stem-cell technology that will culminate in the production of powerful, sustainable and 100 percent traceable anti-aging ingredients for use in their products.
The company employs over 100 scientists in its Global Research and Development Center and operates six fully owned production units in Sweden, Poland, China, Russia and India. It has over 7,000 employees worldwide with annual sales of €1.5 billion annually and is publicly traded on the Nasdaq Nordic Exchange.
Oriflame is still primarily a company aimed at women. But unlike the once reluctant Swedish women that eased into the beauty market in 1967, today’s independent consultants are dreamers with goals of financial independence and careers that fit. With high concentrations in Europe and the former Soviet Union, Oriflame consultants are now found the world over.
Tender Care multi-purpose skincare
“I think we are the answer to what people are looking for,” Brännström says. “Our biggest challenge is being able to explain it in a way that is compelling and that people understand, especially for women to understand that Oriflame is for their freedom and is a way for them to do everything. And we are proud of the fact that you don’t have to put in anything to have a go at it.” The only investment needed is “commitment and passion,” according to the company’s website.
Low financial risk pairs with cravings for social interaction and extra income, making Oriflame an ideal direct selling match for women and some men who dream of cultivating individual beauty, as well as career goals, no matter where they call home.
Togetherness, Spirit and Passion Online
“There are too many people around the world wondering why the grass is greener with the neighbor, instead of being happy about the grass being greener for the neighbor,” Brännström says. Oriflame helps its consultants figure out how to be happy for the success of others and be a center for positive energy that can propel them toward their own success.
Theirs is a corporate culture that promotes togetherness, spirit and passion. “It’s about believing that if you do it together with someone else or in a group, you will actually achieve more than just doing it by yourself,” he says.
Oriflame’s culture takes a wide-angle view of personal responsibility and passion and what both mean to the company’s overall journey to become the No. 1 beauty company in direct selling. “It’s challenging yourself and your colleagues to do slightly more, slightly better; trying new things, being innovative and not being afraid of risks,” Brännström adds.
Oriflame’s passion for teaching people to look at the world and recognize opportunity translates into any language. “We have people from all religions and parts of the world, so we express our culture in all our communications. Sometimes it’s about the values, sometimes our products, sometimes what we believe,” he says.
Technology, like Skype, social media, and specially created tools that support consultants and leaders in business management, personal development and e-learning/training, allows Oriflame to traverse continental, cultural and language boundaries. Customization of this technology varies by region, as the company’s Internet landing page lists no fewer than 60 optional home pages tied to countries in Europe, Asia, Latin America and Africa.
Nearly 90 percent of Oriflame’s orders are placed online, where the company has garnered a respectable 4 million Facebook likes. There followers converge to let their diverse voices be heard and partake of the company’s in-depth journalistic offerings about lifestyle, beauty, wellness and how to live well.
Oriflame is tapping into the potential of the online beauty market and giving that potential to their consultants. “We are a direct selling company that uses modern technology to reach more people around the world. The principles are the same, even though the model is obviously adapted to account for the interactions of local habits and infrastructure,” Brännström says.
Internationally Nimble Marketing
The international scope of Oriflame’s business requires agility beyond their expert use of modern technology. In the emerging world, customer service activities, consultant interactions and even product delivery takes a pliable plan. In some countries lacking infrastructure necessary for product delivery, consultants and customers pick up parcels from service centers that resemble retail outlets, but are still dedicated to direct selling.
This nimble style allows for long-term, innovative marketing strategies that keep Oriflame growing and succeeding. In addition to magazine-style website pilot programs, the company has a two-year sponsorship as an official global partner of the Women’s Tennis Association, offering unique branding opportunities for each organization.
This mutually beneficial relationship extends beyond a previous sponsorship that covered Europe, Russia and the Commonwealth of Independent States, the Middle East and Africa. Oriflame catalogs and social media in the Americas and Asia-Pacific also now include WTA branding, in exchange for Oriflame branding on WTA’s multi-language websites and social media channels.
Women’s professional tennis combines the perfect balance of athleticism and glamour, and through the example of hard work and dedication Oriflame believes these professional athletes inspire all women to be the very best they can be, work to fulfill their dreams and do so while looking great.
In Russia, where Oriflame is one of the biggest beauty brands, innovative brand awareness marketing arose from a television soap opera storyline. As Russian families were reeling from economic turmoil, art mimicked life when an on-screen soap opera heroine supplemented her income by selling Oriflame cosmetics door-to-door. The unconventional marketing move introduced Oriflame products and the business opportunity to a largely uninformed mass market in Russia and shocked its fiercest competitor.
In the end, everything that Oriflame does leads to the dream—the dream of outward beauty, inner confidence, financial independence. “We try to take a holistic picture or view of ordinary people who live an ordinary life, but who would like to know more about the life they don’t live,” Brännström says. And he admits Oriflame has its own corporate dreams as well. “We would love to be in the U.S. because that is the home country of direct selling.”
“The American Dream is the symbol of what we want to achieve,” Brännström says. “It’s where every person, regardless of where she comes from, can make a profound difference in her own life. That’s why we would like to be in the U.S., but we have no such plans today. But when we do enter, we’ll be sure to tell you all about it.”
Royal Philanthropy – World Childhood Foundation
Supporting At-Risk Children the World Over
Few companies can claim true “royal” partners in their charitable endeavors. Even fewer invite the Queen to a 45th anniversary party, to which she comes. But Oriflame can and did.
Her Majesty Queen Silvia of Sweden co-founded World Childhood Foundation with Oriflame and the Af Jochnick Foundation, the company’s philanthropic organization, in 1999. Together they work on behalf of children at risk for abuse and exploitation, by funding and running prevention, intervention and education efforts in 17 countries. More than 100 projects are operational at any given time through the combined efforts of SOS Global Villages and United Nations-associated organizations.
These projects are made possible in part through special Oriflame product sales. Money from these products goes to the World Childhood Foundation or designated local programs that ease the transition from adolescence to young adulthood for children who have grown up in orphanages. Education and mentorship programs help young women avoid the dangers of prostitution, human trafficking and teen pregnancy and give young men alternatives to the lure of the criminal world.
“Oriflame is very proud of helping young people avoid those paths in life,” Magnus Brännström, CEO and President of Oriflame, says. “The World Childhood Foundation has really prepared a lot of young people for life as adults with a prosperous future.”
Michael Cervell, Senior Vice President Global Direct Sales, tells the story of one young man whose life was completely changed as a result of Oriflame’s charitable efforts in the Baltics.
This young man wanted to live a normal life but was living at risk without family until he earned an internship with Oriflame. He worked hard offering assistance at conventions and obtained further educational training. “Now he is a regular employee in one of our Baltic companies,” Cervell says. “He transitioned from being at-risk to making a life for himself that includes a great career.”
It is the hard work and dedication of more than 3 million independent Oriflame consultants around the world that prompted HM Queen Silvia of Sweden to join the celebration in 2012. “That happens almost never, ever for a corporate business to have royal partners or royals visiting a corporate event. It was an incredible joy to our consultants and to our leaders and to our founders,” Brännström says. But he also believes, “It was a sign to the rest of the community in Sweden that Orfilame is a very respectable company that is doing very good things, not only for themselves and the people directly involved but also for people at-large and society, and the country and the world. And for that we were very, very proud.”