L’Oréal: Beauty Gifter Chatbot for Personalized Shopping Experience

If anyone asks me about my opinion of the future trend in beauty products, my answer will always be personalization, personalization, and PERSONALIZATION.

With the development of ChatGPT, I realized that one of the most powerful tools for personalization is AI, and real-time chatbots for customers are the current way of applying.

Actually, L’Oréal started the trials in 2017 and named it Beauty Gifter.

L’Oréal has launched a bot named Beauty Gifter that asks both the gift giver and the recipient questions to sell personalized makeup and skincare gifts via Facebook Messenger.

L’Oréal collaborated with Automat Technologies, a startup based in Montreal, to create these conversational experiences, and Beauty Gifter is one of them. Users answer questions from the chatbot, for example, skin types and makeup preferences, and it will recommend products based on the answers. Here is a short video to better understand how Beauty Gifer works.

How successful?

From the video, we know that the Beauty Gifter integrates with L’Oréal’s inventory and checkout system after the products are recommended, and they will do in-depth personalized engagement based on the profile information they collect. L’Oréal can also analyze the customer insight from the data they collect directly. In this case, L’Oréal has achieved a 54% read rate and 26% response rate, which is 27 times higher compared to traditional email marketing campaigns. 82% of the users gave positive feedback for the experiences. Look at the power of personalization!

For L’Oréal in other countries, the situation is similar. L’Oréal Australia has been struggling with the customer experience aspect. As of 2018, only 11% of L’Oréal Australia sales were online, but the company aims to increase that to 20% by 2028. After introducing virtual customer service in 2018, Lancôme and Kiehls experienced a 430% increase in purchase rate, and 21% of the tool’s users made a purchase. In 2020, L’Oréal Malaysia hosted a 12-hour virtual beauty festival using Facebook Live and Jumper.ai to enable shopping through chat. The event resulted in one month’s worth of online sales in just 24 hours and activated over 17,000 chats, reaching 2.6 million people with a 12% post-engagement rate. Vietnam also replicated the success, with Kiehls Vietnam experiencing a 22% increase in sales and four times the number of new conversations weekly due to faster responses to customer inquiries.

The trend?

Three years passed and with the development of ChatGPT, the chatbot will gain more increase in the future. According to a report from Grand View Research, the chatbot market size was estimated at USD 5,132.8 million in 2022, with a projected CAGR of 23.3% from 2023 to 2030. Increasing adoption of customer service activities for cost reduction is expected to drive market growth. Advancements in AI and machine learning technologies are expected to enhance chatbot features, driving market demand.

Now, it is important for brands to consider:
How can they provide more personalized service online?
How to integrate the personalized online purchase process?
How to optimize the chatbots?
Are there more ways to apply AI other than chatbots?
…….
I’m looking forward to the fun and engaging ideas in the future.