The Digitization of Beauty at L’Oréal
Companies, diversified as they can be, inevitably have adopted the trend of using digital services to simplify and bring faster solutions for their businesses and customers. The digitization journey for L’Oréal, a leading company in the consumer goods industry, has started with adopting SAP as an enterprise resource planning platform for various processes such as operations, marketers, financials, and corporate services. However, the need for digitization has extended beyond the tools required for the organizational needs as the company had to cater to the customers’ needs everywhere at any time, or else it risked losing its market positioning. “Tools and standards are changing faster than companies can react. Customers will soon be able to search for products by image, voice, and gesture; automatically participate in others’ transaction¹.” The commitment to beefing up L’Oréal’s digital activities took a very strong place inside the group in terms of investment and revenues. A strong example of the digitization effort is illustrated in the adoption of e-commerce platforms as a new sales channel which generated €1.7Bn in sales (6.5% of total revenue) in 2016 with an expected growth of +32%².
L’Oréal believes that there is a golden age for social beauty, and created distinct ‘connected beauty innovation’ to retain their consumers and recruit new ones through digitized services. Although the store experience and the behavior of a consumer inside a store is an essential factor from a brand management perspective, the digital applications are becoming a game changer. The trends and product novelties are becoming more powerful online as consumers prefer to familiarize themselves through the diverse social platforms instead of visiting physical stores. For example, the ‘Makeup Genius’ application³, launched in 2014, brought to makeup lovers a New Era of Beauty by being the first virtual makeup application that instantly applies makeup to the consumer’s face. Such an innovation has impacted the consumers’ behavior as they no longer need to visit the stores to try different products and complete the purchase, but rather use the application and complete the sales online.
Video: Makeup Genius4
Another digital innovation from L’Oréal is ‘My UV Patch,’ revealed at the Consumer Electronics Show in 20165. La Roche-Posay, a dermo-cosmetic brand in L’Oréal group, created the first-ever-consumer-friendly skin sensor connected to a mobile application to monitor the exposure to sunlight. During my conversation with the La Roche-Posay Product Manager, Hannan Lalioui, she explained that the original objective of the tool was to educate consumers in the Middle East and to help them monitoring the risk of UV rays they encounter daily. Yet, the innovation had an unexpected impact on the consumers’ behavior. Previously, consumers often visited dermatologists or pharmacists seeking advice prior to purchasing sun protection products for their lack of knowledge, and ultimately, pharmacies were the major sales channel for these products. However, the new patch and mobile application allowed the consumers to choose the right product without visiting a specialist, which created a major shift in the sales moving from the typical channel of pharmacies to the conventional retail outlets or even the online channels. Moreover, as the consumers are instantly reminded to apply sun protection throughout the day based on the sensor readings, the new behavior had a positive impact on the product sales which has increased dramatically and projected to grow at an unprecedented level of +45%. Additionally, one of the latest innovation created by the L’Oréal Group, which is a living proof of the group’s focus on digital technology, is the Lancôme’s Le Teint Particulier custom made foundation powder. The patented technology precisely matches an individual’s unique skin tone to create customized products for different consumers6.
Video: My UV Patch7
The main question remains is to what extent can digital innovation disrupt the beauty industry? How far can the industry main players continue to innovate with digital innovation application or products? Does the fact that consumers can no longer live without being connected to their phones and social media platforms remain to be the main driver for L’Oréal to continue investing in innovation and digital technology? Ultimately, consumers will always look forward to innovations and disruptions in the beauty industry, forcing the all the consumers goods brands to always find innovations and breakthroughs not only to increase their brand awareness or sales, but also to create a differentiation and market advantage among the competition.
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 Bommel, E., Edelman, D., & Ungerman, K. (n.d.). Digitizing the consumer decision journey. Retrieved from https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/digitizing-the-consumer-decision-journey
 L’Oréal Annual Report. (2016). Retrieved from http://www.loreal-finance.com/en/annual-report-2016/key-figures
 Weinswig, & Deborah. (2016). Beauty Shopping Augmented With New Mobile Apps. Retrieved from https://www.forbes.com/sites/deborahweinswig/2016/07/28/beauty-shopping-augmented-with-new-mobile-apps/#765bec4756e0
 YouTube, Virtually Try On Makeup | Makeup Genius | L’Oreal, https://www.youtube.com/watch?v=zbBJfrkZRDI, accessed November 2017.
 Boxall, & Andy. (2016). L’Oréal My UV Patch. Retrieved from https://www.digitaltrends.com/wearables/loreal-my-uv-patch-hands-on/
 L’ORÉAL. (2017). L’Oréal Presents Its Connected Beauty Innovations And Partnerships With Startups At Viva Technology Paris 2017. Retrieved from http://www.loreal.com/media/press-releases/2017/june/vivatech-2017
 YouTube, UV skin patch, https://www.youtube.com/watch?v=zbBJfrkZRDI, accessed November 2017.