13 Feb, 2017

L’Oréal’s digital transformation to be amped up in 2017

 -L’Oréal - blog digital retail

L’Oréal provided a corporate update to its stakeholders last week, many were focused on the future of The Body Shop. L’Oréal’s chairman and boss confirmed over the weekend that they would be selling the skin care company.

Celebrating a record margin for 2016, their reinvigorated digital efforts of 2016 clearly paid off. For example, e-commerce now accounts for 10% of total revenues and enjoys a growth rate of 34% year-on-year. One year from his announcement to focus on digital, L’Oréal CEO Jean-Paul Agon confirms that this focus will remain in 2017:

“This new era where digital is omnipresent, ever-present and essential to the lives of our consumers should be a new golden era for appearance, self-expression and self-esteem, a new golden era for beauty.

As we enter into the era of social networks, we also enter into the era of, what we call, social beauty, where the way you look the quality of your hair, of your skin would be more important than ever in the way you feel for your image of yourself and for your positive interactions with others.

These should infuse progressively all categories of beauty, make-up today, hair color very soon but also styling hair care, skincare. Beauty will be increasingly important for consumers and they will want more of it. They will be ready to devote a larger share of their income to beauty and personal care.

Agon predicts that the global beauty industry will need to capitalize on the idea of ‘Social beauty’ if it to stay ahead of digital trends.

L’Oréal believes that they are uniquely positioned to drive this digital transformation of beauty. Their digitally-minded business model enables them to innovate quickly, a key characteristic of all digitally transformed businesses. It’s vital when undertaking digital transformation to remember that change is constant. Successful companies build business models that can continue to adapt in the future. Their San Francisco-based Digital Incubator is driving L’Oréal’s digital efforts, with industry game-changers like Makeup Genius, Virtual Makeup Coach (downloaded over 20 million times). This app transforms your phone into an interactive mirror. Using augmented reality, it allows you the consumer, to test out products in real time.

Watch L’Oréal’s Makeup Genius case study video here:

For L’Oréal, digital transformation has not only been felt in product development. Agon emphasized last week that the changing relationship with their consumers is a central focus of their digital efforts. Digital technology has opened up many opportunities to interact and connect with their consumers. This more personal approach to consumer communication has changed the way L’Oréal markets. Nicolas Hieronimus, President, Selective Divisions at L’Oréal:

“We adapt to the new customer expectations in terms of shopping experience through D2C or direct-to-consumer first. We opened several boutique on Urban Decay, rolled down new design of Kiehl’s stores, innovated with pop-up stores on Giorgio Armani in Paris, or YSL in Los Angeles and supported our direct e-commerce with new tools in order to provide full brand immersion.

CRM and the 60 million qualified contacts of our L’Oréal Luxe database allows us to meet the growing demand for personalization. We develop customized solutions like a new personalized skincare in-store with Kiehl’s apothecary preparations or proposed Yves Saint Laurent engraved lipstick online with stunning sales.”

L’Oréal has been a key driver in the digital transformation of the beauty industry since 2015. Late last year, Havard Business School published a fantastic case study on this multi-billion dollar company and how it’s changing the face of beauty.

Connected Beauty: The Dawn of a new era

Unlike many other industries, the digital road for beauty has not been smooth! Consumers still favor offline touchpoints and experiences when choosing products. In recent years, a new consumer has emerged, one that utilizes both offline and online channels. 80% of American women will use their smartphones when shopping in-store to inform their purchase.

Digital beauty for L’Oréal has 3 key areas:

  1. E-Commerce
  2. To become the ‘Digital Love Brand’
  3. Personalization of consumer Experience – aided by big data and analytics

Moving forward, L’Oréal is conducting research into IoT and wearables. Their brand YSL has also launched a partnership with Google Glass to capture makeup sessions. The possibilities for L’Oréal seem endless. Their digital domination seems set to last.

For more digital transformation stories in retail, check out the Digital Retail Transformation Assembly 2017 >>


Connected Beauty: The Dawn of a new era



L’Oréal’s digital transformation provides a makeover for the social beauty age

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