As the dust settles on this year’s Cannes Lions and the winners free up some space in their trophy cabinet, we picked up this wonderful piece highlighting the strides L’Oréal has taken to futureproof its business. It was written by thenetworkone President Julian Boulding, esteemed leader of the world’s largest network of boutique independent agencies of which DDI is proud to be a member. Towards the back end of the article, there are some really illuminating insights into technology and agency/client partnerships. Enjoy.
“Tucked away down in the ground floor of Palais 2, on Monday morning when most people had not yet arrived, was an exemplary seminar led by Lubomira Rochet, a Bulgarian from L’Oréal. No, I hadn’t heard of her either, but we will.
L’Oréal used to be a classic Publicis Paris account, reputedly managed by a small number of well-connected seniors and a large number of stunningly beautiful juniors (male and female). They ran a brilliant and provocative ad campaign for a couple of years “L’Oréal – because I’m worth it” which they watered down to a forgettable, conventional ad promise (“Because you’re worth it”) which presumably offended nobody but had no impact except by expensive repetition in prime-time TV. The worst kind of advertising. Then presumably they realised this – because L’Oréal today is a transformed business and a case history for anyone interested in marketing today.
First, it’s an e-commerce business. E-commerce is now 80% of their sales. 48% of their media spend is digital and 60% of that is programmatic. They were the first company in their sector to partner with Ali Baba in China and 40% of their China sales are now e-commerce.
They have systematically evolved their marketing playbook: TV, to search, to YouTube video, to Facebook ads – and now to AR and conversational commerce.
First, AR. As Lubomira explained to the slow learners (that’s most of us), AR can be headset based or mirror based (the mirror is your phone, think selfie.) For a beauty company, the mirror is obviously more interesting. See your face on the phone and try out new looks, colours and shades, textures, highlights.
A few companies now do this with static images – take a selfie and modify the still picture. L’Oréal’s acquisition strategy focusses on niche app companies like Modiface, to accelerate their technical expertise in a digital consumer experience context relevant to their business. This app modifies your appearance in real time, on video… how do you look when you change your expression, look sad, laugh, cry talk, etc.
Next, conversational commerce. Everyone needs a knowledgeable friend to check out how they look with a darker eyeshadow or little more blush on the cheeks. Those glamorous, under-employed beauty advisors you used to see in department stores, were there for a reason. So now, L’Oréal has real time beauty advisers on your phone. Are they real people, or video chatbots? Who knows, but they feel real and have lots of useful tips. And when you like a look, they’ll tell you how to achieve it and sell you the products to deliver it. Delivered to your apartment this afternoon, for your night out this evening.
So, is this tech for tech’s sake? No, it’s strategic. L’Oréal’s internal mantra (so much more practical than a purpose) is “Saisir ce qui commence” – “grab hold of what’s starting to happen”. It drives them to stay in the forefront of fashion and technology, to spot trends early and act on them fast.
Is it insight-based? Yes, it is. L’Oréal’s approach is transformed from the traditional top-down vision of beauty (the need to ‘look right’) to a more democratic vision, encompassing diversity, personal preference and difference – from beauty experts to beauty hackers.
Does L’Oréal need agencies, and if so, why? As Lubomira says, yes… they need them to be chief organisers, to be the voice of the consumer but in a more agile way than before, to ensure that tech and creativity don’t get separated. Did she mean it, or was she just being polite? Either way, there’s your challenge, agencies.”