How L’Oréal uses digital to get to know its customers better
Let’s start by explaining my story. When I started looking for my apprenticeship, the choice of company mattered as much as the interest of the missions. I was never obsessed by a specific sector (automobile, banking, decoration) but I wanted the company to make sense in terms of my professional goal: becoming a digital director in an international group. L’Oréal completely filled the “international group” tick. Nonetheless, at first sight, I was not sure L’Oréal had much to teach me about digital. After some research and having worked there for a couple of months, I realized how wrong I was.
I do not have to introduce L’Oréal — no matter your location, you must have heard of it. L’Oréal, the French producer of cosmetic products, was founded at the beginning of the 20th century and has become the world’s leading cosmetics company. According to the official website of L’Oréal, the group is present in 130 countries, with 27 brands and 70,000 employees.
In terms of its product offering, it is easy to see that L’Oréal is not primarily digital. However, l’Oréal is a marketer that needs to understand its clients in order to adjust its strategy better.
Let’s take a look at how l’Oréal took advantage of the digital to offer more personalization to their international segments.
L’Oréal & Tmall
L’Oréal was the first cosmetics company to sell on Tmall in China, back in 2010. Tmall is the Chinese Amazon — or, more accurately, Alibaba’s dedicated B2C platform with currently more than 40,000 merchants selling goods to eager customers. According to Alizila (the news website focused on Alibaba Group), in 2019, L’Oréal became the top-selling beauty brand on this e-commerce platform, beating peers Estee Lauder and SK-II in sales on Singles Day (11/11), an important holiday and consumer sales event in China.
In order to perform exceptionally on Singles Day, L’Oréal adapted its communication strategy to the market they were addressing. Indeed, they realized that live streaming plays a big role in driving sales on Singles Day, as Alibaba encouraged top brands to use it to showcase their products. That is why L’Oréal chose to open its Tmall live streaming channel and kept it open for 17 hours a day. Over a period of 392 livestreaming hours, L’Oréal served over 10.34 million orders — record hit!
But L’Oréal did not stop there. The group also selected specific influencers according to the type of products they were aiming to sell. On platforms like WeChat and Tiktok, these influencers started posting videos about Singles Day at the beginning of October, over a month before Singles Day itself. As we are told as employees at l’Oréal: anticipation to create excitement is key since it managed to get customers ready and excited for that special day.
L’Oréal & Indonesia
While the first example is focused on the Chinese market, L’Oréal is also interested in emerging markets such as India and Indonesia. So, l’Oréal Indonesia developed Augmented Reality and Artificial Intelligence offerings to transform the e-commerce shopping experience in those countries by allowing their consumers to try beauty products virtually.
In Indonesia, online beauty represents 10% of the total beauty market and it is growing fast. Without doubt, this is a disruptive innovation. According to Professor Clayton Christensen of Harvard Business School, we should not systematically associate disruptive innovations with breakthrough innovations. Disruptive innovation is much more about accessibility, making the innovation more affordable and accessible to a larger population. He even talks about the “democratization of technology”. This is precisely what happens with L’Oréal in Indonesia: something like augmented reality that is recent enough and that we could have imagined being less relevant in emerging countries, L’Oréal made possible.
While this article focused on how l’Oréal uses digital to boost their sales externally, we know that l’Oréal has also been a pioneer in using digital to recruit internally, so that they can cope with the number of applications they receive. Indeed, I’m the result of that AI innovation that they used to process CVs more quickly.
If you would like me to deep dive into this topic or to talk about my employee’s experience there, I encourage you to leave a comment on this article.
References:
https://www.alizila.com/loreal-paris-preparing-for-11-11-innovating-for-china/
https://beautytmr.com/what-it-takes-to-lead-the-beauty-revolution-in-indonesia-ab808e4e9efc
About this article
This article has been written by a student on the Grenoble Ecole de Management’s Advanced Masters in Digital Strategy Management. As part of a content creation assignment, students are given the task of writing articles based on their digital interests and disseminating the articles online. Articles are marked but we make minimal changes to the content. Thanks for reading! James Barisic, Programme Director, MS DSM.
