COSMOFACTORY

Deanna: [00:00:00] This episode is about fragrance manufacturing. It's about creating scent with both common and custom inputs. It's about regional aromas and global retail, and it's about the power of patients in business. Joining me now in the Cosmo Factory Podcast recording booth at cosmoprof Worldwide. Bologna is my guest, Ralph Bou Nader, general manager of Arabian Oud International.
Ralph: Welcome, Ralph. Thank you so much for the invitation. I'm glad to be with you.
Deanna: You're welcome. I'm, I'm looking [00:01:00] forward to learning more about the world of fragrance. I'll do my best. I would love to start our conversation by hearing about your fragrance retail growth strategy. So if I may, Arabian Oud was founded in 1982 and opened a first retail location in Riyadh.
Deanna: Today, the company has more than 1000 retail stores in close to 40 different countries. But in the intervening decades, I would suggest that your company wanted multinational brands to show up as competitors. That you patiently waited for consumers outside of the UAE to fall in love with Arabic fragrances.
Deanna: Will you please tell us about your long-term growth strategy? What was the progression like when and where were you making investments? Thank you
Ralph: for the question. I just wanna add one thing actually. It's, uh, she de jaser, uh, the chairman and the owner of the company that have started in the 1970. He registered Arabian Road in 1982.
Ralph: And opened his [00:02:00] store, physical store in 1982. He, he is a lover of fragrances, road ascension voice. And he started with the idea of saying, okay, we have a root, uh, we have, uh, some value, and we have something to say, a story to tell. And that was his first idea to start, uh, this talking and communicating about d.
Ralph: Around the world. So it started in the Arabic country, of course, as you know, in Riyadh, then expanded in the GCC, so meaning Dubai, Qatar, uh, Bahrain, and then expanded a little bit further outside the Arabic country. And the first store that opened internationally, it was in the uk. Mm-hmm. In front of, uh, Selfridges in Oxford Suite.
Ralph: And that was 23 years ago. Yes. So the expansion was quite good. The year after that, we opened in the. Ari in Paris, and it was, and it's still there. We're still there. And then five years after we opened Broadway, New York. Mm-hmm. Hmm. [00:03:00] And that was it at the start for Shahar, Aziz and his son, uh, our CEO group, uh, Shehar Mar Jasser, it was, uh, the, the far they would go so far in the development of retail and development of our corporate stores.
Ralph: They noticed that there was a switch, uh, in, in the consumer behavior. The consumer was more looking at something a little bit stronger with a different DNA, not always, uh, uh, having the same fragrance, the same root of fragrances. And this is where our story, and I would say Arabian mood story started to develop.
Ralph: Uh, people were more buying, uh, in Dubai in our stores. We saw a lot of foreigners, uh, European, American, Asian. Our fragrances. So we said perhaps it's time to switch a little bit and develop a little bit more. And the story started around eight years ago. We started developing an opening outside. Those three cities.
Deanna: [00:04:00] Sure.
Ralph: And we opened so far, 1,300 store in 37 different countries.
Deanna: Wow. Wow. Yes. That's very impressive. Um, and I believe you've grown your own retail actually into wholesale and distribution for brands, um, from Arabian U as well. Will you tell us about making that decision to go into retail and wholesale and, and maybe some of the challenges and opportunities there?
Deanna: Of
Ralph: course. So. It's very, very interesting because the journey of, uh, uh, Arabian Hood so far, the past, uh, 40, 45 years was only corporate retail. You could not find Arabian hood elsewhere. It was impossible. And, uh, around two, three years ago, we started to work on strategy on franchise wholesale. Multi-brand retailers, the one that I call Sephora, Ulta, and the others, and we decided to go there.
Ralph: So the the starting challenge is how do you express the value of a brand with 1,303 tech stores in a Wall Bay? Very [00:05:00] challenging.
Deanna: Yes. Or
Ralph: on a gondola, it's very challenging. So we started working on different concept. Different approach, go to market strategy in order to be able to say, this will represent our bestselling product, our fast moving product, our hero product, in order to be able to put it on the shelving and make something out of it for our clients and recruit new clients.
Ralph: That was the aim. At the end of the day, when you go wholesale, when you go on distribution and when you go to the Sephora, to two plus to Macy's, to El Corte, Les, uh, and others, you have to be ready. Uh, that until, so until today, we are facing some challenges, but in a, in a constructive way because you always have solutions and the aim is to have, and that's a very difficult aim, is to have the same experience in our stores Then.
Ralph: You might, and you should actually have in any corporate or other retail store like Sephora or a distributor or wholesaler.
Deanna: Yes. Yeah. It's
Ralph: very difficult.
Deanna: Absolutely. No, I, I think that's a challenge a lot of [00:06:00] brands try to address. I'd like to also explore online fragrance retail with you. Fragrance is, um, maybe even more so than color, cosmetics, skincare, other categories.
Deanna: Fragrance is a very sensorial experience. Um, and certainly fragrance marketing can be quite conceptual. It communicates something, um, but on a screen it can't deliver the actual scent. So clearly you seem to have refined, uh, the retail store experience, you know, as, as best that you can for sure. Um, but what does that look like in the world of e-commerce and, and omnichannel consumers?
Deanna: Help me think about it.
Ralph: Oh, I'm gonna, I'm gonna give you some ideas because we, it was a case study for us. Okay. A learning curve. Uh, and I think for. Every brand and even, uh, consumer when Covid hit us. It's not a, it's not a nice thing to talk about, but it, it, it happened and there was no point, no one on the street.
Ralph: So online became one of the biggest priority for all the brands. Yes. Not only to sell, but to communicate and to get an experience out of it. So how can you get an experience [00:07:00] out of a fragrance if you're not smelling the fragrance? Yeah. So you have to have. Impactful visual. You have to have a story that communicate and resonate to consumer.
Ralph: And this is what we try to do in our website to get the omnichannel experience that you have in our stores with the experience of, uh. Uh, a sales advisor, uh, with the experience of perhaps AI coming in at one point. That's what we're working on now in order to get an advice, uh, a personalized advice. Is it a gift?
Ralph: Is it something that you want to get for you? What's your, uh, or effecti pyramid? Those are things that you can do in store, but how can you do it online? So that was a challenge and we created an environment around this to bring our consumer to find. At least if we reach 70% of the in-store experience, when I say in-store offline experience, yes, that would be great.
Ralph: As a starting point, and this is where we are today. We're trying to communicate the same look and feel, [00:08:00] the same concept, the same, uh, self advisory, uh, personalized advisory. And we're also going on gift, gift trapping. How important it is, personalize the gift wrapping in store, you can do whatever you want to do.
Ralph: So online, we're trying to get this kind of experience also.
Deanna: Yeah, and I, it makes me think now, like I, I suggested earlier you've refined your own retail strategy. Um, you've started working with partners, as you said, multi-brand retailers, and now with this online business as well, it makes me feel like you're probably borrowing from.
Deanna: All aspects of it, right? That the online experience might actually now inform your in-store experience or your experience with a multi-brand retailer Might. Inform the other two. Can you say anything about sort of borrowing lessons and, and
Ralph: ideas? Totally true. Uh, we learn every second. Yeah. I think if you stop learning, you have to look at yourself in a different way.
Ralph: And the, the learning curve of any brand, uh, is on a daily, on a second. Yeah. [00:09:00] Uh, and, uh, when you share data. When you share a new consumer, because normally who come to Arabia or the people that knows Arabian Old and are curious people, now you're opening to retailers. Retailers, you have 1 million consumer that goes to retailers and they're gonna notice our brand.
Ralph: So we have to gather this data, analyze the data. We need data analysts in our, in, in our core, um, environment. Mm-hmm. Uh, we need to have the right answer because sometimes people think that Arabian N is only out. 'cause of the name of the brand. Yes. That's
Deanna: one note. Of course. It's one
Ralph: note. We have all the families we work with, the big group like E, F, F and the others.
Ralph: They come, we create our juice and we have the, the seven families of, uh, of fragrances. We have the flowery, the woody, the amber, the patchouli, and all the others. Sure. So it's a learning curve. Uh, it's a daily learning curve. We have to share data and we have to learn from experts like, uh, retailers that have several brands.[00:10:00]
Ralph: It's, it's a, it's a, it's a walkthrough way.
Deanna: Yes.
Ralph: Us,
Deanna: yes. Beautiful. I, I'm glad you mentioned your suppliers because I would like to talk about fragrance manufacturing. Um. Tell me if I'm correct. All of your production and filling facilities are in Saudi Arabia?
Ralph: Yes, you're correct in Rio. Okay. Everything we do is a 360 degree approach on fragrances.
Ralph: We are the one of the few remaining perfumers Yes. In the world. And really, I mean it because I don't wanna name other brands because I'm not here to talk about other brands in a negative way or whatsoever, but all the other brands have three axis, perfume, skincare, and makeup. This is very simple, very basic.
Ralph: They start with perfume, and they go to skincare and they go to makeup. When you look at Arabian Hood, we do not have skincare. We do not have makeup. We have only fragrances. And it's only about storytelling and fragrances.
Deanna: Yes, yes. No, it's, you're focused on one art. For sure. For sure. Can you tell us a bit about your company's infrastructure and production processes?
Deanna: What? What would we see in Saudi Arabia?
Ralph: [00:11:00] Okay. Saudi Arabia, first Saudi, the kingdom of Saudi have changed drastically and an invite. Every person that is listening to come and visit, yeah, they will be. Uh. Positively surprised, uh, by what's happening in Saudi. Uh, the, the, the infrastructure that we have in, uh, Inwood is a 360 degree infrastructure from, uh, creation to production, to packaging.
Ralph: Uh, our head office is in Riyadh, uh. Inside, uh, the head office, we have more than 1000 people working for the company. And on the infrastructure base, from production to juice creation, to testing and all this, we have around, uh, 650 people working with, uh, in our factory. It's not about only men. There is men and women.
Ralph: Uh, it's not about only, uh, uh, not taking care about our environment. We do take care of, we do take care of our environment. We, something that we do not know how to communicate yet, but we're learning is that we're planting, uh, [00:12:00] agar wood tree. Uh, on every time we buy, uh, wood. Mm-hmm. Uh, because the wood comes from the agar Yes.
Ralph: Woods. And, and, and we preserve, uh, what we do. And that's very important for us, that the, the word knows that it's not only about, uh, mass production. Mm-hmm. It's very important for us. It's a value of the azi and jaser they have in their interest.
Deanna: Yes. A question about that makes very good sense. Thank you.
Deanna: And I. You know, we, we said earlier, um, you were, you know, waiting for the, the global consumer to fall in love with Arabian fragrance. Maybe you can say something about the overall sensibility, because even as you're saying, all of these, um, aspects of production, um, are based in the, in the, in the country.
Deanna: What is the sensibility of Arabian fragrance? What does, you know, what, what about the packaging? What about the fragrance itself? What about the, you're suggesting details about worth, work ethic and, and sustainability. Help me get my head around Okay. That, that sort of business concept. [00:13:00] Okay. So, uh, for us,
Ralph: uh, the priority, yes, of course it's consumer because this is where our, uh, head goes because we need to be able to talk about, about it.
Ralph: So let's, let's about, let, let's think about. One specific point. You have all the CPNP and the FRA compliance that are here to, to, to, to help you. And, uh, and I don't take them as the police. They help you. Yeah. They're
Deanna: useful guidelines. Yes, exactly.
Ralph: Yeah. It's, it's a useful guidelines. So you have to take this useful guidelines and as we work already with vo, NO EFF, and they are already CPNP and ER and CNPS compliance.
Ralph: So we already have a, a target that we know that we shouldn't go. And, and go above it because then we'll go on some territory that is not healthy for a consumer. And we want to protect your skin. Uh, we, we don't want you to be, uh, sensitive at any point. Uh, we're trying to use less alcohol. Mm-hmm. And that's very important for us.
Ralph: That's a trend, isn't it? Of course. Why? Because people are more and more aware of what's happening. So they are asking questions and I think an [00:14:00] entity there, inside this entity, you have people working in the entity, so they're gonna ask the same question. So you have to listen to them, understand what's their.
Ralph: Interest where they're going and then adapt. The adaptation might take sometimes a little bit longer than what you're saying because there is a a, a boat on it. It's a huge boat. If you turn the boat you have it has to take some time. Yes. So that's, that's the aim of, uh, of Arabian mood is always to look, to protect, uh, to get an ethical environment.
Ralph: And I'm gonna give you a little bit. Uh, uh, of something that we didn't communicate yet. Our packaging now mm-hmm. In the next, uh, future short future will be 97%, uh, recycled. Mm-hmm. Mm-hmm. So that's a huge change for our, you know.
Deanna: Sure.
Ralph: So that's something that, uh, we really, uh. Care. Yeah. It's really important for us.
Ralph: Yeah.
Deanna: No, it's meaningful investment and I'm, I'm sure you're quite proud of that. Yes. Yeah. Um, you mentioned working with, um, some of the industry's, you know, largest ingredient makers. Yes. But I know that you also have your [00:15:00] own inputs, as you said, your harvesting from the ag archery, um, and such. Tell us. I guess I'm curious to learn about the inputs that you own, right, that you are adding, but then also how you go about the, the blending of sort of maybe some more conventional notes with your unique inputs.
Deanna: Uh. Road
Ralph: is unique. Yes. Uh, there is, uh, a flower that we call, it's unique. It only grows in south in the kingdom of Saudi, nowhere else. Uh, so there is this uniqueness that we have. Okay. If you go and only create road, people will say it's too sectorized. But if you learn how to master and, uh, Azi, he's a passionate person.
Ralph: Shaham are also, and they learn how to master road. And I always, uh, do a comparison with, uh, tea, with the Japanese and the Chinese.
Deanna: Okay.
Ralph: Uh, road is exactly on the same level. It's in the DNA.
Ralph: It's a, it's a huge concentration that [00:16:00] have automatically, uh, an input on every product you do. So we said to ourself, you have wood, you have oli, you have amber, and you have musk.
Deanna: Mm-hmm.
Ralph: Those are in the DNA of Arabian wood. Okay. You have, you can ask ish or bodon, uh, to create a juice that fits this product.
Ralph: Okay. Let's take Mai Mai is our beautiful bestseller. So inside Mai we have the juice, but. We don't wanna stay there. We wanna put our DNA. So our DNA in their laboratory, they take an essence of wood, a wood, a chip wood, or a, a essential oil of wood. Can. Vary in nodes within the aging.
Deanna: Yes.
Ralph: So it can be a a hundred or 150 years old, it'll not have the same, uh, fragrance as a 20 years old.
Ralph: And that's, this is the beauty of it. And this is how we come and put our DNA inside our product, our fragrances. That's why [00:17:00] there's a lot of people trying to copy us. Really. I mean, it there is on the market. You should look. Nothing bad. It's a fair game. Everyone copies everyone, but they cannot copy a hundred percent because of this specific point of, uh, uh, difference that we have.
Deanna: Yes, yes. Oh, that's lovely. Um, and I'm, I'm curious too, maybe we can think about, I'm not sure if there are benchmarks, but, um, some details about Arabian U Fragrance even beyond what you've shared. Skin feel, um, how long you know your scent typically last is, does that vary based on the scent you create? Um, four.
Deanna: Everyone is curious about sea gra
Ralph: these details. Tell us, tell us more. So in, in the perfume business, and it's gonna take, uh, one or two minute, don't worry. No, please. In the perfume business you have. Or the cologne or the T and the higher you go, the higher the concentration is. Then marketing came in and when marketing came in, they said, yeah, but sometimes, or the cologne, like the jaw or the cologne, we can put higher concentration.
Ralph: So the rule felt. I would say so for us [00:18:00] Arabian o to focus on the main Arabian, we only do O perfa. Mm-hmm. In the market, O perfa concentration is between 16 and 23% of ingredient. Our O perfa. I can guarantee you, because I know the concentration is between 23 and 27. Mm-hmm percent. So in terms of seage, to answer your specific question, our fragrances will remain, will remain much longer than any other brand on the market.
Ralph: And this is, uh, a fact. Yeah, you can try it. I invite you to come and you will see any of our fragments. It doesn't, makes it, uh, giving you a headache. That has nothing to do. It's not link.
Deanna: Mm-hmm. Mm-hmm.
Ralph: If you smell your fragrance, it means you put too much, but that's you as a person. You don't have to smell your fragrance.
Ralph: The people that have, are passing by, you have to smell it, but not you.
Deanna: Mm-hmm. Mm-hmm.
Ralph: If you smell it, that's an advice I give to any consumer. It means you did [00:19:00] you, you, you have done too much, right? Overdose. Yes. So lower down. So our fragrances are CPN PM compliance, our FRA compliance. We respect your skin.
Ralph: We try to put more natural fragrances. Much more natural ingredient. Okay. It's always a cost. Mm-hmm. Yeah. It's always a cost. Yes. And that's very important to manage both expectation, but at the end it's a long lasting ci.
Deanna: Yeah. No, that's amazing. That's amazing. I, I really appreciate that. Um, and I, I guess just before we end.
Deanna: We've been kind of assuming and, and hinting around what Arabian Oud is, but will you just explain that particular fragrance ingredient, um, more clearly in case some of our listeners don't, don't know?
Ralph: Yes. Oud is, uh, something that if you come and I hope everyone would be coming to Kingdom of Saudi and to the region, hood is part of our behavior.
Ralph: Hood is a wood that comes, it's a resin, okay? That is inside the tree. It does not kill the tree. This resin, the [00:20:00] older it gets. The, the variation of fragrance is infinite
Deanna: and I'm sorry, older. The, the tree gets and then you take it from the tree or you take it Yes. And then you sort of age it outside? No, I cannot age it.
Deanna: You have to keep it in the tree. Yes.
Ralph: If you take it outside from the tree, you have to use it. Yes. Okay. Okay. So it's very important. It's really a resin. It's like a, like the tolu, like the cve. Those are ingredient that are resin that goes, and it's really on the tree. So, yep. Uh, um, uh, the, the, the hood is that, that.
Ralph: Particular, uh, hood can evolve a 1-year-old hood and a hundred years old. Nothing to do. You, you don't have the same fragrance. You cannot, yes. Yeah. If you smell the wood, you will not smell anything. You'll smell wood. You have to burn it.
Deanna: Yes.
Ralph: Yes. And when you burn it, it doesn't do sparkle, it doesn't do light.
Ralph: It burns with bubbles, Uhhuh,
Deanna: uhhuh,
Ralph: because of the resin uhhuh. And this is where you have the smell. So that's why when you come to a new person, if you come and visit us in Saudi, we will invite you and we will welcome you with wood. We will burn [00:21:00] it. I really, it's, it's, uh, it's, uh, it's, it's, uh, 1 million years old.
Ralph: They have it since ages. Yes. It's never been, uh. Different or other than this, it's like the, the Chinese and the Japanese was the mm-hmm. It's, it's, uh, it's code Yes. In their DNA.
Deanna: Yes. It's, it's part of the, the ritual, the lifestyle. It's a ritual. It's a ritual. Thank
Ralph: you. I was searching for the word. It's a ritual.
Deanna: Yeah. No, that's beautiful. Well, Ralph, I, I thank you for helping me learn more about fragrance for helping our listeners learn more about your fragrance business growth strategy. This was lovely. I'm, I'm so glad you were able to be a guest here on the Cosmo Factory Podcast.
Ralph: Thank you so much for inviting me.
Ralph: It was a pleasure and I hope that, uh, if anyone had a question, they know where to reach me. [00:22:00]