Personalisation at scale – L’Oreal

When a billion people use your skin care & hair care products and your cosmetics range, you need to consider innumerable textures & colours. All these consumers want products that are tailored to their needs. For L’Oreal, delivering personalisation at this level of scale meant thinking about innovation in a different way.

It would no longer mean a one solution to one problem approach. It meant tailoring the solution for individual consumers who experienced the same problem in different ways.

Leveraging industry 4.0 to achieve personalisation at scale

Industry 4.0 includes robotics, IoT, data, blockchain, VR, AR & AI. All these technologies have a place in the modern industrial framework. They can be combined and can be deployed to make manufacturing more productive and efficient.

L’Oréal not only leveraged e-commerce and recommendation engines during the pandemic, but the company also tested and implemented technologies to deliver personalisation at scale.

Initiatives and solutions

We’ve already covered L’Oreal’s Modiface in a previous blog. Some of L’Oreal’s other various initiatives are:

  • Le Teint Particulier, under the brand Lancome – a product which allows consumers to have their skin tone ‘measured’ at point of sale. A personalised concealer is then manufactured for them right there in the store. The concealer is a combination of one of each of 8,000 shades, 3 coverage levels, and 3 hydration levels. Even the packaging is personalised with information including the customer’s name. It also includes a reference ID for quick and easy reordering.
  • Custom D.O.S.E by Skinceuticals, a L’Oreal UK brand. According to L’Oreal’s tech incubator, “Custom D.O.S.E by SkinCeuticals is the first ever automated system that delivers highly concentrated combinations of SkinCeuticals’ most potent ingredients on-the-spot. Addressing the concerns of over 250 skin types, the D.O.S.E technology is first-of-its-kind because it’s able to mix active ingredients into a single serum at the point of service specifically to target the appearance of skin aging issues, like wrinkles, fine lines, and discoloration.”
  • Agile production lines – by leveraging several industry 4.0 technologies, L’Oreal has been able to manage final product differentiation later in the value chain. Stéphane Lannuzel says, “We can produce the base and then choose the colour for a lipstick right at the very last moment”.
  • Perso, this gadget personalises and customises make up for your every need. Perso relies on an AI derived diagnosis of a photo (corresponding phone app by BreezoMeter) of a user’s face to highlight imperfections ranging from fine lines to dryness. Perso then creates a final product formulated for the user’s skin, pulling from a library of ingredients.

The results speak for themselves

For the year ended 31 December 2021, L’Oreal’s brands grew by 16.1%, nearly twice that of the global beauty market. Sales was up 15.3% vs prior year, with profits up 29% vs prior year.

The group reported double digit sales growth in H1 2022 at 20.9% increase YoY.

Regaining consumer trust – a 2022 focus for many FMCG companies

According to a recent report by Deloitte on the state of the Consumer Goods industry and key imperatives for 2022, increasing transparency helping in regaining consumer trust was top of the list for several companies.
Trust and transparency are intrinsically linked. Consumer goods brands that are not open and transparent are at risk of losing consumers’ trust, according to nine in ten executives that Deloitte surveyed. According to the report, most consumer goods companies are making an investment to increase the level of transparency for consumers and other stakeholders.

Increased transparency requires meaningful insights to be derived from raw data

For consumer goods companies to be transparent to all stakeholders and consumers, data needs to be sensed and captured.

The data collected should be shared and processed with other data sources to derive meaningful insights. Sharing an abundance of raw uncleaned data is likely to result in the opposite of what these companies are trying to achieve.

According to Deloitte’s report, intelligence, artificial or otherwise, is needed to do this effectively.

This includes supply chain transparency

55% of the execs that Deloitte interviewed for this report, cited out of stocks of products as a key reason for losing consumer trust. Another 48% cited stock outs of certain flavours/varieties/pack sizes of the brand as a key reason for losing consumer trust. Out of stocks at stores cannot be solved without transparency across the product value chain. Furthermore, it is critical that retailers and consumer goods brand owners work with the same demand/sales predictions to collaboratively ensure that there is enough stock produced, bought and stocked at stores, to meet demand.

Increased flexibility in stocking

Increased supply chain transparency enables consumer goods brand owners as well as retailers to be more flexible with their stock keeping policies. Most companies these days follow a just in time stock policy. However, when there are production related constraints like raw material supply issues or shortages or labour constrains at manufacturing sites, it enables consumer goods companies to make an informed decision to keep more stock(raw materials and finished products) when possible for future contingencies.

If the constraints are on the logistics side, it enables retailers to make an informed decision to stock more in their warehouses to ensure they do not run out of stock.

Without an understanding of expected consumer demand based on real time data combined with where there are constrains in the value chain, it is impossible for the different stakeholders to make a decision on what needs to be done.

Consumer trust and supply chain transparency

Speaking of stakeholders, consumer goods companies need to regain consumer trust by increasing supply chain transparency. By increasing supply chain transparency and ensuring availability of stock at stores, consumer goods brands and retailers can regain the trust they lost with consumers who experienced availability issues at stores.

What’s more, it gives consumers confidence in any sustainability claims the brand/retailer makes. According to the execs interviewed by Deloitte, 84% of them feel that consumers lose trust when brands don’t meet consumer expectations on ESG initiatives.

If you’d like to learn more about how to increase supply chain transparency and derive meaningful insights regarding demand from available data, email me on veena@salesbeat.co