From bricks to clicks
The L’Oréal Group is the world’s largest cosmetics and beauty company. Since 1925, the group built a strong portfolio of brands and positioned them through traditional magazine covers and TV ads, pushing consumers to walk in retail stores, try and buy their products.
Since then, L’Oreal has become arguably the most digitally innovative beauty company in the world. Armed with the mission to integrate digital into the heart of its business model to reinforce its edge in the beauty market, L’Oreal has undergone a major transformation over the past few years. 
Beauty and digital media: a perfect match
In 2012, foreseeing their future challenges, the company launched its “Connected Beauty Incubator” based in the US, a division within the company’s research division dedicated entirely to technological innovation and industry disruption.
L’Oreal carefully studied their consumers and learned early on that that their target market was constantly connected, underwent a research process including many touchpoints, and was turning to video content to search for beauty solutions and see products come to life. 
It is hard to change the nature of beauty products, but reaching and engaging consumers became a great opportunity for innovation. In 2015, digital rose to over 25% of media spending, while e-commerce sales worldwide grew 37.8%, becoming 5% of sales worldwide and as high as 20% in markets like China. 
How is L’Oreal transforming beauty?
As most consumer packaged goods companies, marketing, sales and product development divisions had been largely distinct silos within the company. The first step towards integrating digital in the business model was redesigning the organization to align objectives. Also, approximately 1,000 employees with digital capabilities were recruited in the past 4 years.
Perhaps the major step towards their commitment to digital was appointing their first Chief Digital Officer in 2014 as a member of the company’s executive committee. This role aimed to lead digital strategy and innovation across divisions and brands, ranging from content marketing, personalization and data, and e-commerce. 
L’Oreal is rolling out e-commerce for their brands with different strategies depending on the target market. In countries where digital is more developed, they team up with local e-commerce leaders, for example with Alibaba and Tmall in China. In other markets, e-commerce is being developed using distributor partners and brand sites. 
Data and product development
As they expand their digital capabilities, L’Oreal has created robust mechanisms to extract and analyze consumer data. What content do consumers search and watch? What are they more interested in? What interactions trigger other actions and/or sales? In 2014 for example, the company analyzed Google search trends and discovered that in the middle of the “ombre” hair color trend (where women colored their hair lighter from the mid-shaft to ends), consumers were trying to find ways to do this at home with hair color products, and lacked an application tool. L’Oreal was quick to respond and take this new technique to consumer’s homes, launching a L’Oreal Paris “Ombre Kit” which was a great success. 50% of purchases came from consumers new to the hair color category! 
Enhancing the purchasing experience
In 2014, an outcome of L’Oreal’s “Connected Beauty Incubator” was a beauty app called Makeup Genius. The app transforms the front facing camera of iPhones and iPads into a virtual mirror where users can virtually try on different beauty products. This development implied using very complex technology to map facial expressions and be able to overlay products like lipstick or eyeliner onto user’s faces, and was very disruptive in the industry! It became a great success with over 11 million downloads worldwide.
In addition, the app allows consumers to scan products in-store, see the details in the app, experience how they would look on themselves, and finally complete the purchase through the app at any time, avoiding lines in congested stores and improving the overall shopping experience.
Overall, we can say that L’Oreal has been very successful adopting digital as a core element of its business model, mainly by transforming their organizational structure, renovating their product development process and enhancing interactions with customers through e-commerce and in-store experience. Furthermore, it is constantly recognized as a leader and disruptive innovator in the industry. It is expected that in the future much of L’Oreal’s growth will rely on digital initiatives, and they are certainly already working in their many next big ideas!
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 Telegraph UK, How Technology is transforming beauty http://www.telegraph.co.uk/technology/news/11744292/LOreal-How-technology-is-transforming-beauty.html
 GCI Magazine, “L’Oréal Ups Commitment to Digital with New Chief Digital Officer”
 Think with Google, “Five truths about beauty shoppers” https://ssl.gstatic.com/think/docs/five-truths-beauty-shoppers_infographics.pdf
 Key Figures, Digital – L’Oreal 2015 Annual Report https://ssl.gstatic.com/think/docs/five-truths-beauty-shoppers_infographics.pdf
 L’Oreal Website, “The potential of e-commerce” http://www.loreal-finance.com/en/annual-report-2015/e-commerce#article-digital-tooltip-1
 Think with Google, “L’Oreal Paris uses search to build brand love” https://www.thinkwithgoogle.com/case-studies/loreal-paris-builds-brand-love-with-search.html