L’Oreal & Modiface: no more messy in-store trials

On 16 March 2018, L’Oreal announced their acquisition of ModiFace, an Augmented Reality (AR) company known as the leading provider of AR technology for the beauty sector. L’Oreal had been working with ModiFace on a project basis for 7 years before this announcement was made.

Early months

A year into the acquisition, by early 2019, they had developed several hundreds of solutions, nearly one project a day, according to an interview by The Drum, of Lubomira Rochet, the Global Chief Digital Officer. According to Lubomira, they had launched 120 of those projects by the end of the first 12 months as they had observed that engagement times double and conversion rates triple with the AR feature on their website/app.

Amongst these solutions were a diagnostic tool capable of predicting and addressing visual signs of ageing to make product recommendations and a virtual shade selector tool to make hair colour recommendations. They were also testing the technology for consumers to virtually try out cosmetics from the comfort of their homes in early 2019.

Just in time for the chaos 2020 brought the beauty sector.

Lockdowns & L’Oreal

L’Oreal went into partnership with Google. Consumers seeking lipstick or eyeshadow brands by L’Oreal could use the ModiFace solution to try on any shade virtually before they bought the shade they wanted.

Through a similar partnership with Facebook, they saw a five fold increase in usage of their virtual make-up tools and the conversion rate from ad to sales was three times higher with the virtual try on tool. It was particularly effective for hair colour, due to salon closures during the pandemic.

202o results

When the results for financial year ended 31 December 2020 were announced, Jean Paul Agon, L’Oreal’s then CEO, said, ‘….sales achieved in e-commerce rose sharply by +62%, across all Divisions and all regions, reaching the record level of 26.6% of the total Group’s sales for the year.

Despite declines in sales of Professional, Luxe and Consumer product ranges, sales of their Active range grew by 13% that year. Also, there was a remarkable difference in sales across regions. Asia Pacific, which has always been a technology friendly region with high adoption rates for new tech, saw an increase in sales of 1.5%, despite the pandemic.

Beyond 2020

In 2021, L’Oreal recorded a sales increase vs 2020 of 16%, with e-commerce claiming nearly 30% of sales. By this time, L’Oreal revenues had recovered to nearly the same revenues as 2019… due to their almost prescient investment in technology.

The Future of Retail as we see it at Salesbeat

A month or so ago, I sent out a survey to understand the future of grocery retail across the globe. We got more than 300 responses from 25 countries and across ages ranging from 20 until 70+. Super appreciate everyone who replied. Thank you!

Everyone talks about how online buying is on the rise and that one day, everyone will be buying their groceries online. We wanted to get a better understanding of why everyone saw online grocery buying as the future and whether all countries around the globe felt the same way, so we could set our users up for success.

We intended to leave the survey open for just a week initially, but seeing some of the initial responses, which were very contrary to expectations, we decided to leave it open for response for a couple more weeks, which turned into a month.

So what did we see? We’ll be posting 3 blogs about the results:

  • The first will be on what is happening now
  • The second on what we see as the future from the results we got
  • The third will go into why we came to that conclusion

71% of our respondents buy their groceries from Supermarkets. Just 2.9% of our respondents buy their groceries online. The remainder 26% said they shopped both online and in stores regularly. 

Of the 2.9% who responded that they only shopped for groceries online, the bulk of respondents were in the 50-70 age range. We were expecting these respondents to be much younger – Gen Z respondents to be specific. Or even late millennial respondents.

But when we dug into why we saw these results they made sense. 

It turns out that most of Gen Z enjoy the grocery shopping experience. They prefer going into stores to get what they want. As the current working culture turns more to remote working and flexible working, it does indeed make time for the Gen Z respondent to go into stores to shop on a weekly basis. Also, they feel they need to touch, feel and see the actual product on shelf. 

Most millennials have a preference for shopping at stores and topping up online. 

The previous generations, in contrast, had far less time because of their commute into work and due to the squeeze on time, you see more respondents who shop both online and at stores. Online for convenience and stores when they had time. 

Also, we found that respondents in the 50-70 age range found it far more convenient to buy mostly online due to mobility issues. 

More to come on this next week!