Making cosmetics look good
Louis Demers built a niche providing outsourcing services to retailers and marketers

Every six weeks Louise Caumartin visits Montreal area Provigo stores to check out Maybelline displays to make sure the shampoo, conditioner and styling gel sections are well stocked, positioned and visually appealing.

But Caumartin doesn't work for Maybelline, or for Provigo. She works as a sales representative for Nun's Island based Secom Plus, which provides merchandising services to marketers. One of its clients, is L'Oréal Canada, which outsources its entire grocery chain sales force for Maybelline products.

"Almost all the work I do is for Maybelline," said Caumartin. "But my paycheck is from Secom Plus."

According to Secom Plus president and co-founder Louis Demers, Caumartin's work for Maybelline is an example of a growing number of companies that are turning to third-party providers to perform a variety of tasks, traditionally performed in-house.

"Outsourcing is a big trend in retailing," said Demers. "It's big in Europe, it's big in the U.S. and we are seeing more of it in Quebec."

Secom Plus, has been one of the big beneficiaries of that trend. In just ten years, the company has grown from two employees in a Lachine basement, to 400, with offices in Montreal, Toronto, Calgary and Moncton. Revenues are expected to hit $8 million this year, an increase of 20 per cent from 2001.

The company's client base is split between retailers and consumer products' marketers such as Gillette and Molson Breweries. But Secom Plus's biggest niche is in the cosmetics sector, which comprises close to 40 per cent of its business.

Companies turn to outsourcing services for a variety of reasons expert say. These include the heavy cost of retaining full-time help, the desire to retain operational flexibility and for the ability focus management attention of core operations. Common examples include building maintenance, legal, accounting and advertising departments.

Although outsourcing figures are hard to establish, by all accounts the trend is growing. One key player, Toronto-based Mosaic Group, which provides many of the same merchandising, sales force representation and data collection services as Secom Plus, saw sales grow 54.2 per cent to $761.7 million during 2001.

But in recent years the definition of what constitutes core operations is shrinking, and the range of services that can be outsourced is growing.

For example Secom Plus employees have completely redone the layouts of the cosmetics sections at 800 Shoppers Drug Mart as well as numerous Jean Coutu outlets, restocking and relocating shelves according to precisely draw sketches. The retailers were thus spared the expense and hassle of scheduling overtime and hiring a lot of temporary workers.

 

According to Diane Brisebois, president of Retail Council of Canada, other areas that retailers are farming out include distribution centers, inventory, and information technology.

"Third party-providers are becoming more efficient and inventive about the service they offer," Brisebois said. "It's no longer just a question of saving money for them, but also of increasing efficiency and flexibility.

But Secom Plus's growth is not just in retail. L'Oréal is proving to be a key Secom Plus client too. At first Demers only handled the company's twice yearly restocking and layouts, of the Maybelline walls in its pharmacy distribution chain. But Secom Plus got a big boost early this year, when L'Oréal decided to set up displays in close to 3,000 new stores, and to outsource the entire sales operation.

According to Daniel Legris, L'Oréal's vice-president and general manager, Demers's success is due to his entrepreneurial spirit, his ability to execute effectively and his capacity to take risks.

"(Secom Plus is) a big part of our success," said Legris. "We have made big changes over the last few years and are placing a lot of confidence in (Demers)."

Demers got into the merchandising services business after a long career in the food industry including stints at Catelli and General Mills. In 1986, he made his first attempt at running an third party provider operation, with two partners, but the business never took off.

"We got into the business a little too early," said Demers. "Customers weren't ready for us yet."

In 1992, decided to try again, teeming up with his wife Johanne Jetté the company's vice-president (operations). This time customers were ready.

Demers got his big break almost immediately, when a major consumer products company called, saying that it wanted all its products recalled, due to safety concerns. Demers had to hire 300 temporary staff almost overnight, to inspect products at 6,000 sales outlets.

"We had more than 30 people running in and out of our house, and we got almost no sleep for a week," said Demers. "It was around that time, that we decided to move out of our basement and to rent an office." Several clients jumped on board soon after, and the growth has been non-stop ever since, especially recently in the Toronto market, where Demers now spends half his time.
According to Demers, teaming up with his wife was one of the best moves he ever made. "I handle all the sales, and customer contacts," said Demers. "And she takes care of day to day operational affairs."

The two each have two children from previous marriages, "but the child we have together is Secom Plus," jokes Demers.

 

 

Photo caption: Louis Demers, president of Secom Plus, shown here at a Maybelline display at a Jean Coutu cosmetics department, has built a niche providing outsourcing services for the cosmetics and retail industries.

 

 

 

Sidebar: Getting ahead

o Secom Plus provides retailers and consumer products companies outsourcing merchandizing services during peak periods or for specialty projects.
o The company has built a niche in the cosmetics industry, but also serves retail and other merchandising clients.
o Within the last two years Demers has made major inroads into the Canadian market, and now spends half his time in Toronto.
o Demers got his start in business by hiring 300 workers for one week, to help a client who had to recall stock from 6,000 sales outlets.

 

 

peter@peterdiekmeyer.com

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