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Cannes Lions 2019: How digital transformation is driving growth for L'Oréal

Lubomira Rochet, Global Chief Digital Officer, and member of executive company, L'Oréal, shares how the brand has achieved success after investing in digital

Lubomira Rochet

Ever since L'Oréal initiated the process of digital transformation, its revenue from e-commerce touched 12% of the total earnings and captured one-third of the total branded beauty traffic in the platform.

Lubomira Rochet, Global Chief Digital Officer and Member of executive company, L'Oréal, in a keynote session at Cannes Lions 2019, explained how digital transformation helped the company increase its growth rate. “The digital transformation is so fast and exponential that I would like to call it a revolution," Rochet said.

According to Rochet, digital transformation is a question of survival. “In the last five years, L'Oréal has seen a complete transformation. The company is getting 12% revenue from e-commerce and around half of the company's growth is coming from this segment," she said.

"In the same five years, we increased our media spends on digital by 47% out of which 70% is on programmatic marketing. We have captured one-thirds of the total branded beauty traffic on the platforms,” she said.

The brand has fetched 1.3 billion consumer data points, allowing it to personalise its marketing and consumer interactions. The brand is working with 80,000 influencers. "We consider them as our extended marketing team and co-family. In these five years, the stock price of L'Oréal has almost doubled."

In the last five years, the company has gathered 350 crore reviews and ratings for its different brands.

Rochet said these things have been possible because of the digital transformation. "It is a very tangible driver of our market value. This digital transformation is so deep that we call it an industrial revolution. It has transformed the whole value chain in L'Oréal from research and innovations to supply chains and operations to our marketing model," she said.

As a part of its digital transformation, L'Oréal has set up small data factories where it crawls up 50,000 sources of data real time to optimise its performance.

"We are putting our productivity and ROI at the heart of everything we do. Our obsession is to optimise and automate our process, increasingly using the power of data and AI. We use both data and AI for topline expansion, bottom line optimisation and automation," she said.

On the use of data and AI in enhancing consumer experience, Rochet said, “In L'Oréal, data and AI are used to innovate and personalise the consumer experience through new services based on business models and product recommendation. It is also used for automating certain processes such as trend forecasting, media buying and man forecasting.”

"We have recruited 2,500 digital experts in the course of five years and in-sourced some strategic major expertise, which includes media traders, CRM, community manger, data scientists, e-commerce specialists, data engineers, agile coaches, etc. We have trained 27,000 people across all sections of L'Oréal," she said.

Despite being a 110-year-old company, L'Oréal now sees itself as a digital-first company. 2018 has been one of the best years for L'Oréal in terms of performance.

According to Rochet, brands should learn how to adjust to new quotes of marketing in the digital age. Rochet then elaborated on major points that brands should keep a note of for better brand growth.

Don’t fight the wrong battle

Stay centred to the reason of building your product and your company. Your job is not to collect big data and become tech companies and compete with Gafa or BOT. A brand’s job is to serve consumers by capitalising years or decades of doing what brands do best. It’s not about the technology, it’s about the experiences. At L'Oréal, our job is to bring beauty to all.

Maintain ethical digital economy

The brands have immense responsibility to create more trustworthy, transparent, inclusive and ethical digital economy. Ethics of data and algorithm-based economy are among the most important topic we can tackle as an industry.

Create meaningful and relevant content

While others were busy debating on the probability of Facebook and Instagram, we factually observed that brands were building empires just by marketing on Facebook and Instagram. We then observed that platform is not the problem, not placing correct content at place is. Thereafter, we reversed thousands and thousands of content in a year trying to understand what makes consumers stick to the content and what makes them to skip it. This completely changed our whole approach to content creation. We implied shorter, more visual contents, sequenced, targeted, personalised in our content. It also changed our approach to media buying on the platforms and we became a bench mark in Facebook and Instagram marketing.

Successes are earned in the field

I think hyper centralised companies are going to suffer in the digital age; this is the age where change is the new constant. New platforms, channels and business models emerge every day and everywhere. If brands don’t have teams to seize social selling platforms, it’s a big loss for them.

Rochet said trust and attention are going to become the two biggest currencies for the digital world. We at L'Oréal are embarking on the second wave of the digital transformation with a clear key mission. We create trust on one side by putting people and communities at the heart of our marketing and we create attention by creating the best omni-channel beauty experiences and services to engage with the new consumer.

Give people a voice

I think brands should see themselves as platforms to give community and consumers a voice and to enable important cause-full conversations.

Nyx and Portrait, the brands under L'Oréal, are the platforms of self-expression for the community.

At L'Oréal, we believe that the next phase of digital transformation is about innovating and transforming the beauty experiences through digital services. To inspire and guide people in their decisions and to recommend them the best colours, products and routines, said Rochet.

We believe that augmented reality, artificial intelligence and voice are the future of digital beauty experiences. We acquired our first beauty tech company called Modiface, headquartered in Toronto.

From beauty AR mobile modules, to web e-commerce AR modules and in-store magic mirror software, Modiface provides a wide range of services, Rochet said.

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