Because it’s worth it: L’Oréal’s etail experience

When it hired Asmi­ta Dubey as its chief mar­ket­ing offi­cer for Chi­na in 2013, L’Oréal was best known for its grand in-store pro­mo­tion­al dis­plays. The entire retail sec­tor has moved irrev­o­ca­bly towards ecom­merce since then, but the cos­met­ics brand has adapt­ed bet­ter than most of its rivals to this trend. 

It was sev­er­al years before the Covid cri­sis accel­er­at­ed the shift to online shop­ping when the com­pa­ny recog­nised the cru­cial role that the inter­net, par­tic­u­lar­ly social media, would play in its future.

“In 2012, our then CEO declared the age of dig­i­tal. In 2014, the group hired its first chief dig­i­tal offi­cer [Lubomi­ra Rochet]. When the pan­dem­ic hit, we were ready.” says Dubey, who suc­ceed­ed Rochet this April, hav­ing served as the con­sumer prod­ucts division’s chief dig­i­tal offi­cer for more than four years. “With­in 48 hours, we were able to piv­ot our brand web­sites every­where.”

Preparation is key

Sev­en years ago, ecom­merce account­ed for less than 5% of L’Oréal’s total sales rev­enue. Today, the channel’s share is 27%. But the busi­ness isn’t rest­ing on its lau­rels, mere­ly thank­ful that it’s weath­er­ing the pan­dem­ic in bet­ter shape than most. Its goal is to bring that fig­ure up to 50%.

“We’ve mobilised the whole com­pa­ny towards it. We’ve always believed that beau­ty and dig­i­tal are the per­fect match,” Dubey says. “There are 50,000 mar­ke­teers here who are trained and dig­i­talised.”

One of the keys to L’Oréal’s suc­cess has been its will­ing­ness to try inno­v­a­tive ways of engag­ing with cus­tomers online, she notes. One bet that the com­pa­ny made years ago was an invest­ment in aug­ment­ed real­i­ty. Today, this tech enables cus­tomers to try on lip­sticks vir­tu­al­ly using the web­site. The company’s social media adverts con­tain links to its try-on page, enabling the recip­i­ents to see whether the prod­ucts being mod­elled in the pho­tos would suit them. 

“They can see exact­ly how these lip­sticks would look on them,” Dubey says. “That is the aug­ment­ed-real­i­ty expe­ri­ence in adver­tis­ing.”

Ecommerce becomes social commerce

Anoth­er inno­v­a­tive approach that has attract­ed L’Oréal’s inter­est is social com­merce. This is about mov­ing the point of pur­chase away from a brand’s web­site and clos­er to where the cus­tomers tend to spend more of their time: on social media. It all hints at a future where Insta­gram, YouTube, Face­book and oth­er pop­u­lar plat­forms become retail forums as much as social ones.

The oth­er key ele­ment of social com­merce involves tap­ping into the pow­er of influ­encer mar­ket­ing. In this respect, L’Oréal has learnt from China’s thriv­ing livestream ecom­merce sec­tor, whose meth­ods typ­i­cal­ly involve pay­ing a celebri­ty who has an army of fol­low­ers on social media to demon­strate a prod­uct in a live video feed. View­ers can sub­mit ques­tions for the pre­sen­ter to answer dur­ing the demo and they can buy it with a cou­ple of taps on their smart­phone screens. 

In Italy, L’Oréal’s Lancôme brand has an ambas­sador in Chiara Fer­rag­ni, a fash­ion blog­ger with 23.5 mil­lion Insta­gram fol­low­ers. She host­ed a beau­ty show on the Livescale online shop­ping plat­form in Novem­ber 2020 that attract­ed 46,000 view­ers, for instance.

“Thou­sands of peo­ple can go there to buy the prod­ucts – and the whole propo­si­tion she’s talk­ing about,” Dubey says. “The moti­va­tion is that social aspect and the consumer’s need for a more authen­tic rela­tion­ship with the brand.”

Authenticity is vital

Hair­dressers have been serv­ing as brand advo­cates for L’Oréal since well before the ecom­merce era. Recog­nis­ing their val­ue in gen­er­at­ing cus­tomer engage­ment and sales, the Ger­man arm of the busi­ness pro­vid­ed dozens of salons with an online plat­form after the country’s lock­down restric­tions forced them to close their doors.

This enabled them to curate engag­ing social con­tent and keep in touch with their clien­tele, Dubey says. “From there, they could still sell to peo­ple very, very well.” 

Under­pin­ning such dig­i­tal ini­tia­tives is a core strength in cus­tomer ana­lyt­ics. Know­ing what the buy­ers want is the first step to suc­cess in retail, and L’Oréal has recog­nised the impor­tance of hav­ing time­ly infor­ma­tion about their ever-chang­ing pref­er­ences. 

L’Oréal once used to mon­i­tor its online met­rics once every month, but it soon learnt that this fre­quen­cy would not be ade­quate in a fast-chang­ing etail world.

The company’s dig­i­tal man­agers began look­ing at web­site, app and social media ana­lyt­ics far more often to help them bet­ter fore­cast prod­uct demand fluc­tu­a­tions and oth­er key trends.

“We had to do all that real-time ana­lyt­ics on a dai­ly basis, see­ing in a few hours what’s hap­pen­ing today ver­sus tomor­row,” Dubey says. 

Accu­rate fore­cast­ing has become par­tic­u­lar­ly dif­fi­cult since the pan­dem­ic threw the world into cri­sis mode. Now that we’re edg­ing gin­ger­ly back towards some sem­blance of nor­mal­i­ty, Dubey is con­fi­dent of one out­come: that ecommerce’s per­cent­age con­tri­bu­tion to L’Oréal’s turnover will con­tin­ue to rise. But, in her effort to pre­pare the com­pa­ny for the next chap­ter of the dig­i­tal age, she believes that its online and offline activ­i­ties need to work togeth­er in clos­er har­mo­ny. 

“There’s prox­im­i­ty, there’s loy­al­ty and there’s com­merce,” she says. “And all of those fac­tors are con­nect­ing – offline and online.”