Our buyers deserve the best value for their money
DP Lux is one of the fastest-growing companies in the region, in the retail and beauty industry. In his interview for Diplomacy&Commerce magazine, Miloš Milutinović, the company’s general manager, talks about the company’s products, niche products and the differences between premium and lux products.
You base your business on niche products. What are they exactly and what are their main features?
Concerning niche perfumes, as typical representatives of the niche industry, what sets them apart is that they are innovative products that have unique fragrance compositions of top-quality ingredients. Due to their uniqueness and complexity, niche perfumes provide a personalized experience of customer satisfaction. Each of us finds our own emotion and identity in a niche perfume.
In which way do niche perfumes differ from fashion and cosmetic brand perfumes?
Unlike fashion and cosmetic brand perfumes, niche perfumes are created by designers who incorporate experiences and feelings into their creations. Therefore, niche perfumes are the ultimate works of art, and it is up to us to find the one that we will enjoy the most. I would like to point out that one of the important features of niche perfumes is that most of them are unisex, because they do not reflect gender, but the experience of certain emotions.
Is every premium product also a luxury product?
In my industry, the premium does not denote something unattainable, but something that provides a sense of satisfaction and meaningful added value in everyday life. I will give you an example of this – one of the brands we distribute, The Spirit Of Dubai, is one of the most famous brands in the world of niche perfumes. Their premium perfumes are in the standard price range for this type of product. On the other hand, this brand entered the Guinness World Records with its perfume called SHUMUKH, as the most expensive perfume in the world. With its unique two-metre-high packaging, which is encrusted with gold, silver, pearls and topaz, as well as 3,571 diamonds, SHUMUKH is synonymous with luxurious perfume.
What does premium mean to you?
In many ways, in the post-COVID period, the consumer world is embarking on a new era. As if the concept of hyperconsumerism and the principle where the price is the key determinant in marketing mix have been abandoned overnight
I have always been advocating that “less is more”. In this context, I would like to mention the discussion about the difference between style and fashion. For me, style is eternal and fashion is fleeting. Style is not based on trends, but on quality in every segment – from materials used and the top-notch production process to service, packaging, presentation, communication and the choice of sales channels. This is how we arrive at premiumization. It is one of those new expressions that are linguistically, perhaps, difficult to pronounce clearly and quickly, but which we can easily get used to. The bottom line is that premium is quality that prevails over quantity.
In 2021, you expanded your distribution business to 11 countries in Central and Southeastern Europe with a tendency to expand further. At the same time, your premium retail chain, Belodore, is currently present in 6 countries in the region and is the second-largest chain of its type in Europe. Could you explain to us how come you experienced the greatest expansion at the time of the greatest crisis, namely since the outbreak of the Covid-19 pandemic?
Throughout my career, I had to deal with various types of crises. My abundant experience has taught me that crises can be viewed as a blessing in disguise because all crises imply progress. Creativity is born from challenges, crises facilitate inventiveness and grand strategies. The one who overcomes the crisis overcomes himself – everyone who perceives it as an opportunity is aware that the crisis will lead to weaker organizations giving way to stronger ones on the market. Therefore, the only true crisis is a crisis of incompetence, reluctance and unwillingness. When everyone was reducing marketing budgets and strictly focusing on downsizing activities, we were focused on cash flow management, but not in a way to cut costs at all costs. On the contrary, the focus was on reducing the costs of complexity and creating new opportunities for the placement of our products, with one goal in mind – to bring the feeling and the best offers found in global metropolises closer to our customers in all the countries where we do business.
As a distributor, DP LUX covers a market of 65 million consumers. In the retail segment, DP Lux covers a market of almost 35 million people. How does the current global economic crisis affect the development of the premium product market and how much does market consolidation help you in your business?
Many macroeconomic and market shifts and trends in the last five years have favoured premium products, starting with the degree of customer education, which is at an enviable level. level. Today, they know what they want, what are the features of each product, and what are the global trends… All this reduces the need for impulsive purchases and puts the service, the overall environment in which the sale takes place and the customer’s feelings in the foreground. These facts certainly favour premium products. Furthermore, due to negative macroeconomic trends, the target group that buys this product category has demonstrated the highest degree of resistance. Also, there is much stronger brand loyalty in the premium segment.
We cannot expect better business results tomorrow if we do business in the same way as yesterday
DP Lux especially focuses on systematizing the experience we gained from doing business in 12 European countries through a unique group of values and benefits that we offer to our distribution chains and consumers via our retail chain that sells Belodore niche perfumes.
We initiated this qualitative systematization through an internal project. We want to bring the spirit of global metropolises, quality of service, ambience and shopping experience closer to our markets while respecting all the idiosyncrasies that they have. Also, we strive to educate consumers that quality costs money, but not without reason, and premium products have a much better price vs. quality ratio than products from other categories. Hence, year-on-year, we have been witnessing that consumer awareness is developing and that the premium is not unattainable and certainly not overpriced. In short, our customers deserve to get the best for their money.
The second part of your question was about consolidating our business in several markets. Certainly, this process brings with it several benefits – from using the potential of economies of scale, a better negotiating position with the brands we represent, the possibility of selecting the best personnel, and access to new knowledge and experiences.
We cannot expect better business results tomorrow if we do business in the same way as yesterday. Changes are necessary, therefore I believe that it is necessary to look at the whole world as a single market. Of course, expanding to a larger number of markets brings with it its own challenges. Effective management, fighting with local competition, logistical challenges, control, connecting with your team… All of the aforementioned are only part of the daily challenges that arise from market consolidation.
Given that you are a distributor of over 90 brands and communicate with companies worldwide, what is your experience concerning their perception of our region as a market?
I will try to illustrate our partners’ perception in one phrase – “non-established market”. This perception is based on assumptions and insufficient information, which is a common problem today and one of the biggest mistakes that leaders and managers can make.
After visiting the region, our partners are often very surprised by the quality of life, the breadth of education and information that people here possess, the good knowledge of foreign languages, culture and history and how much they follow global trends. Some of them irreparably fell in love with everything our markets have to offer.
I would like to use this opportunity to brag a little too – as a rule, Belodore boutiques are chosen as the most prestigious sales points of most brands and frequently find a place in their presentations and publications. This speaks volumes about how much the opinions have changed and how much awareness that Western Europe and the USA are not the only markets suitable for the placement of premium products has grown.
On the other hand, each of us should be aware that we are representatives of our respective regions and that as such, we have a responsibility towards all the countries that our companies represent. We do not only represent ourselves and our company but something much wider and bigger than that. I really mean this. This attitude is deeply rooted in my value system, which I try to convey to everyone around me.
Nothing is more practical than a good theory, but there is no better theory than good practice
Speaking about your job, how do you connect and use the current experiences you have as a university professor and the general manager of an international company?
Nothing is more practical than a good theory, but there is no better theory than good practice. In both of my occupations, I am always guided by this rule I’ve heard from a very dear professor. Everything we do in life requires a balance, but also an even development of potential in all segments. The academic work encourages me to keep up to date with all the news in the domain of my scientific expertise, while on the other hand, I have the great pleasure of being able to implement and review all my academic knowledge through the practice of a person who is at the head of an international company that has recorded double-digit sales for the last five years. Also, working with students is invaluable – it gives a person the opportunity to always stay current. Their energy and ambition are truly infectious. Several special students today work in very important positions at the DP Lux Group, which makes me even happier and more proud.