L’Oreal’s chief digital officer explains how the quick adoption of e-commerce saved the company’s 2020 earnings

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Lubomira Rochet speaks onstage during the Youtube session at the Cannes Lions Festival 2018 on June 19, 2018 in Cannes, France.

As vaccination programs across the globe begin to bite into the spread of Covid-19, retail businesses are starting to think about how they’re going to welcome back customers who have saved cash during the last year’s crisis.

One of the sectors looking for a new path out of the crisis is the cosmetics industry. While some sectors – like medicine, household cleaners and soap, and vitamins and supplements all saw increases in purchases during the pandemic, according to JP Morgan, the world cut back on cosmetics.

There are several reasons for this: as nationwide lockdowns have disrupted normal life, many people have been spending less time in front of others, and when they do, masks have made it impracticle to spend the same amount of time on facial cosmetics. Another reason is that the cosmetics industry traditionally relies on tangible, in-person sales. This is why staffed cosmetics counters are a staple of many department stores.

L’Oreal is one of the largest cosmetics companies in the world, and Lubomira Rochet – who made Insider’s list of 100 people transforming business in Europe last year – has been tasked with navigating the firm through the pandemic. Rochet is the firm’s chief digital officer, and based on widespread industry trends, the last 12 months should have been a sure-fire path to decreased profits for the company. Yet L’Oreal’s full-year financial results for 2020, published in late February, saw things staying steady.

“L’Oréal has traversed this crisis in the best possible condition and has even grown stronger,” Jean-Paul Agon, the company’s chairman and CEO, said when revealing the results. The reason? L’Oreal’s forward-looking bet on e-commerce sales. “Thanks to its strength in digital and e-commerce, which has again increased considerably during the crisis, L’Oréal has been able to maintain a close relationship with all its consumers and compensate to a large extent for the closure of points of sale,” added Agon. In all, e-commerce sales rose at L’Oreal by 62% in 2020, and accounted for one dollar in every four spent with the company.

The bumper results are the payoff for a decade of work. “The matter of fact is L’Oreal started its transformation 10 years ago which served us well when covid hit, because we were ready,” Rochet told Insider in mid-2020. The digitialization of the operating model for the company was crucial to making sure the firm managed to weather the crisis, but it was also one that Rochet had seen as a key area long before that.

“We spent a lot adapting our marketing to the digital age,” Rochet said. “Investing new formats and platforms from YouTube to TikTok to Instagram to WeChat, and really completely changing our formats for faster and more interactive formats. That has been quite a journey.”

But it’s the way that people tend to buy their makeup that has seen the most significant transformation. “We have invested in technology such as AR or VR to give [customers] an extra experience when they shop our products,” said Rochet. “Those are things like virtual make-up or hair colour try-ons. It’s about teleconsultations that were big during covid. Those are service we propose to our consumers to enrich the experience.”

Like many things, the coronavirus pandemic simply accelerated existing trends that had been in train for years. Rochet points to the rise of livestreaming sales in China as an example of how the pandemic has amplified what was already there, making it more important and significant for consumers battling the challenges of coronavirus.

And as stores and businesses begin to reopen, Rochet feels L’Oreal is in a position of power. “We’re moving to an interesting moment where more people in a low-touch economy don’t want to touch products in the store,” she explained. “They don’t want physical testers. So we’re introducing services like virtual make-up try on, through a QR code people can experience the colours and the looks, but virtually.”

It’s something her CEO and chairman also agrees with. Setting out 2020’s financial results, Agon looked forward to 2021 with positivity. “Driven by the strength of its strategic choices and a determined dynamic across the year, L’Oréal has adapted to this unprecedented context and terrible pandemic with speed and agility, accelerated all of its transformations and will emerge stronger,” he said.

“At the beginning of this new year, which remains marked by uncertainty regarding the evolution of the pandemic, but also by consumer’s appetite for beauty that remains intact across the world, we are confident in our capacity to outperform the market again this year and, subject to the evolution of the sanitary crisis, achieve a year of growth in sales and profits.”

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Facebook is lashing out at Apple again about privacy changes

Hi! Welcome to the Insider Advertising daily for December 17. I’m Lauren Johnson, a senior advertising reporter at Business Insider. Subscribe here to get this newsletter in your inbox every weekday. Send me feedback or tips at LJohnson@businessinsider.com.

Today’s news: Facebook lashes out at Apple again, the PR firms betting big on software, and L’Oréal sees big e-commerce boom.


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Facebook CEO Mark Zuckerberg arrives for the 8th annual Breakthrough Prize awards ceremony at NASA Ames Research Center in Mountain View, California on November 3, 2019.

Facebook took out full-page newspaper ads blasting Apple for its iOS update that will make it harder for the social media firm to target users with ads

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Eddie Kim, founder and CEO of Memo.

The top 27 software companies serving the public relations industry

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L’Oréal is banking on influencers and try-on technology to cash in on online sales – and it’s made up for half its pandemic losses

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L’Oréal is banking on influencers and try-on technology to cash in on online sales – and it’s made up for half its pandemic losses

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L’Oréal chief digital officer Lubomira Rochet.

With people stuck inside during the pandemic, brands are selling online more than ever.

At cosmetics giant L’Oréal, e-commerce has grown 65% during the pandemic to represent 25% of revenue, its chief digital officer Lubomira Rochet said during a marketing roundtable conversation recently convened by Business Insider.

Further, e-commerce made up for more than 50% of its losses in brick-and-mortar during the pandemic and is expected to account for 50% of its sales by 2023.

L’Oréal leveraged the growth in online sales by spending more on platforms like Amazon that are performance-driven; in SEO to drive people to its own websites; and on ad formats like YouTube for Action. 

It’s also been spending more on virtual try-on technology, social commerce, and personalization. Its try-on technology ModiFace can now be found across 15 other sites and apps, including Amazon, YouTube, and Google Search. L’Oréal also invested this month in the social commerce platform Replika Software, which lets influencers, makeup artists and a hairstylists using its products to sell them directly to people online.

“L’Oréal brands have all embraced the trend of social commerce and have experimented with different models – influencers, e-beauty advisors, as well as consumers – with very promising results,” Rochet said. “We want to crack this new e-commerce channel that has a very strong potential in beauty and build a solid ecosystem of advocates and social sellers around our brands.”

The rise of e-commerce during the pandemic has also made marketing more conversational, with L’Oréal having a 40% rise in interactions with consumers across channels like Facebook Messenger and WeChat to pass 60 million interactions this year. That increase has given L’Oréal more data on which to base business decisions.

Read More: L’Oréal now handles 20% of its ad buying in house, and it’s another sign of the growing threat to traditional advertising agencies

“We were able to track category shifts like hair color sales growing 300% and make-up falling 30% by managing data and insights not every quarter, but literally everyday,” Rochet said. “Having our finger on the pulse of consumers is important also so that we can talk to them in the right tone.”

Despite e-commerce’s growth, Rochet said brick-and-mortar wasn’t going away. 

“There may be some disruption, but the Boots and the Carrefours in Europe are embracing omnichannel commerce and emerging as an alternative to Amazon,” she said.

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