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The L’Oréal digital transformation reinventing the future of cosmetics

Digitalization has revolutionized every industry and is changing our ways of living, consuming, communicating and working. But how can a company like L’Oréal, that primarily relies on a “tangible” customer experience, rethink its core way of proceeding?

A throwback to how Lubomira Rochet paved L'Oréal's way to digital

During her time at L’Oréal, Lubomira has positioned the group at the vanguard of digital and e-commerce for a more connected, personalized, and social beauty. She led L'Oréal to become a digital-first corporation, paving the next Digital Chief’s, Asmita Dubey, way to virtual cosmetics. Mrs. Rochet primarily focused on four big topics during her time as the group’s digital officer:

 

1) Acceleration of e-commerce: As more people wanted to shop online and e-commerce was developing in all industries, Lubomira had to think of ways to make that possible for beauty products. She and the group hired more than 3,000 experts in digitalization and invested heavily in media and marketing.

Result: L’Oréal e-commerce shares of total sales grew from 5.2% in 2015 to 26.6% in 2020.

2) Put personalization at the heart of their strategy: L’Oréal went from being a mass marketer to an expert in personalization whether in its content, advertising, CRM or obviously products. The company invested in incubators to help them achieve their goals.

Result: L’Oréal now offers several personalized products with for example their platform “Le Teint Particulier” that allows you to match your foundation with your skin or also their serum machine “Custom D.O.S.E” which follows the made-for-me trend.

3) Massively reshuffling their marketing models: The beauty company went from pure advertising (TV) to all kinds of marketing models (social medias). They had to think of new forms of content and especially had to pump up their frequency.

Result: They now produce between 50% and 100% times the number of content that they used to and developed content factories in-house to meet their needs.

4) Beauty tech: The heart of their new digital strategy is putting services on top of products, thus they needed to enter the beauty tech industry.

Result: Many investments in incubators and tech startups were done with the goal to create the resources needed for their new digital strategy leading to virtual cosmetics.

 

L'Oréal: a beauty company that invests in tech

Speaking of investments; in 2018, L’Oréal acquired ModiFace, a Canadian company recognized globally as a leader in augmented reality and artificial intelligence applications for the beauty industry. This acquisition is in line with L’Oréal’s digital acceleration strategy, which aims to equip its brands with the most innovative technologies for beauty services and experiences. Modiface and its AR and AI engineers are developing the next technologies and business models such as virtual makeup try-ons, virtual hair color try-ons, AI powered skincare diagnostics, real-time beauty consultations online and all the services that will become strategic gateways to beauty in the coming years. Those services will create even more personalized relationships with L’Oréal’s consumers and allow them to increasingly personalize their product recommendations and their products themselves.

Beyond ModiFace, the digital teams continue to be on a constant lookout and quest for the next beauty tech startups and technologies through their numerous partnerships with incubators, accelerators, investment funds (Founders Factory, Station F, BOLD) and with their very key digital partners such as Google or Facebook. This is a very exciting area of development and investment to build the future L’Oréal to strive as a beauty tech firm powered by data and AI.

The different phases of L'Oréal's digital transformation

Phase 1: Everything is linked to the way a product is discovered thus during the first phase of L’Oréal’s marketing strategy, products were launched through TV, print, mass marketing and point of sales.

Phase 2: The whole second phase of the digital revolution was really about Google, YouTube, Instagram. This is the way people search, the way they discover products. L’Oréal adapted their way of communicating using social medias They also partnered with influencers and started to deliver tutorials. This phase allowed them to get closer to their customers, but something was missing: personalization.

Phase 3: Here L’Oréal started to explore custom made products. Yes, people felt closer with the second phase, but now they must feel like the product was made for them and them only: “You should try that cream because it was selected for you based on your needs, and not just try that cream because it is nice”. To do that, digitalization is needed.

In short, the future of L’Oréal is: services, custom made, and personalization. 

A makeover for the beauty industry

Now that Lubomira Rochet paved the way to the future of cosmetics with the third phase, Asmita Dubey, the company’s new chief digital and marketing officer will have to follow along her steps to achieve L’Oréal goals.

Mrs. Dubey did not waste time as she is already exploring how online games, augmented reality and social media can help the company reach new demographics and reach their objectives.

In June, the new appointed digital officer organized workshops about online gaming, launched new partnerships (NYX Professional Makeup with Dignitas), started to work on new topics such as “social commerce” where influencers sell products on their social networks and even launched a pilot program in which customers can purchase products from the U.K.-based TikTok accounts of NYX Professional Makeup and Garnier.

All these new investments in technologies such as augmented reality will allow L’Oréal to shift from a product-focused company to a product and services company, which is what they are aiming for. L’Oréal is set to reinvent the future of cosmetics with the help of artificial intelligence and augmented reality. Mrs. Dubey is preparing for a scenario where up to 50% of sales could be generated online, which represents a real makeover for L’Oréal and the overall beauty industry.

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