- Lubomira Rochet is the chief digital officer of L’Oreal.
- Rochet explains how the quick adoption of e-commerce saved the company’s 2020 earnings amid widespread financial crisis in the retail industry.
- Because of her work, Insider named Rochet to our annual list of the 10 leaders transforming media and advertising in Europe.
- Visit Insider’s Transforming Business homepage for more stories.
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.”