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DUBAI: The coronavirus pandemic has resulted in brick and mortar stores dropping their shutters and switching to online channels. Although online sales were slow in some categories, consumers quickly adopted due to the lack of options in stores during the COVID-19 lockdown. However, the e-commerce trend continued even though the restrictions were lifted due to the convenience and fast delivery times.
The global beauty industry, which has annual sales of SR 1.9 trillion ($ 500 billion), had a weak first quarter in 2020 with widespread store closures, according to a 2020 report from McKinsey & Company to introduce innovative online shopping opportunities, beauty brands have had to change the way they market themselves.
With this in mind, Arab News spoke to Mehdi Moutaoukil, CMO of L’Oréal Middle East, about e-commerce, digitization and the future.
Tell us about L’Oréal’s presence in the e-commerce space before the pandemic.
As a digital-first company, e-commerce was an integral part of L’Oréal’s consumer journey long before the pandemic. As the number 1 beauty group in the market, we were the first beauty providers to build long-term strategic partnerships with key e-commerce players to expand the e-beauty category and improve the consumer experience.
We also invested in our skills very early on, before COVID-19, to be able to build this channel in the region, both from a people perspective and in terms of tools and technology.
How has this strategy changed during and after COVID?
The pandemic has accelerated our e-commerce business, especially during the blackout period. Last year we achieved three-digit growth, with e-commerce making up almost half of the stationary losses. We have also improved the digital capabilities of our entire company and introduced more direct customer platforms such as Yves Saint Laurent Beauty.
Since then we have continued the momentum of e-commerce and today all of our brands are available online on major e-commerce platforms such as Noon, Amazon, Namshi, Ounass, Sephora, Lookfantastic, Basharacare, Boutiquaat and others. We have also developed personalized beauty experiences based on artificial intelligence tools that give consumers access to the latest beauty innovations that allow them to discover, try and buy the products they love.
During the pandemic, keeping in touch with our consumers was also imperative for us. So we made sure we were maintaining a communication channel by launching a platform called Beauty Tracker in March 2020. It served us as an effective tool to get in touch with our consumers on an ongoing basis via focus groups or personalized one-on-one discussions. These interactions allowed us to take an in-depth look at consumers’ changing perceptions of beauty, the challenges they face, their underlying expectations for brands, and their evolving beauty needs.
Can you provide some insight on how to shop in store versus shopping online?
53 percent of consumers in GCC countries spent more time browsing and shopping online during the pandemic, and said they would continue to shop online after the pandemic.
E-commerce is now well established in both Saudi Arabia and the United Arab Emirates, as 72 percent of GCC consumers have bought more beauty products online since the pandemic started (versus 79 percent offline) and are ready to be a major channel for Beauty to stay.
In September, we saw the recovery of brick and mortar shopping in the beauty category, mainly in the United Arab Emirates, given the advances made with the introduction of the vaccine. However, there was no direct impact on digital purchases, which have remained stable over this period.
Today, online and offline shoppers are demanding an omnichannel experience, and the buying route has now merged. Consumers across the GCC expect personalized digital experiences and fast online services that have played a vital role in their decision-making process when buying products and throughout their shopping journey. We saw this increased demand from Millennials and Generation Z.
Online shoppers are now also demanding faster delivery, which is why players like Namshi and Bloomingdale’s offer same day delivery and Ounass delivers within a few hours. In addition, local online consumers are demanding a more extensive range in order to avoid longer delivery times for products from overseas.
Based on these findings, what initiatives has L’Oréal put in place?
We are committed to bringing the in-store experience to the customer’s doorstep while preserving the experience and the try-on component. For example, we have introduced digital try-ons on the websites of our beauty brands such as Yves Saint Laurent Beauty and Lancôme, where consumers can try make-up virtually. We implemented the same concept with the nail polish brand Essie with a virtual try-on salon that ensures a convenient and entertaining online shopping experience.
According to Modiface, the augmented reality and AI company acquired by L’Oréal, try-on usage increased five times during the pandemic, with twice the engagement and three times the conversion, which is a testament to the efficiency and likeability of this method to consumers .
Another important online service our luxury brands use is the Online Concierge feature, which enables consumers to connect with our beauty advisors, receive personalized product recommendations and learn more about their key features. This service continues to be of vital importance as more and more people got used to shopping online, even after the pandemic.
What about L’Oréal’s in-store and online sales?
The past few years have been an integral part of the Group’s digital journey, and as we move forward, our digital activation strategies are becoming more and more data-optimized. Ecommerce sales are now over 27 percent of our global sales and we are investing to be ready when ecommerce is 50 percent of total sales. This does not prevent the group from walking on both legs, because stationary channels are increasing by 17.8 percent and are reinventing themselves.
How would you summarize L’Oréal’s marketing strategy over the past year?
Over the past few years, our overarching strategy for all of our brands has been to take a personalized approach to beauty, using research and development, technology and AI to meet the unique needs of all of our consumers. We continuously evaluate the ecosystem in which our consumers navigate and adapt our marketing strategy to their evolving beauty needs.
In our marketing strategy, too, we have shifted more towards digital in recent years due to the massive shift in the consumer journey, which is now mainly taking place on mobile devices and on the web. We have created consumer engagement geared towards digital and data-driven consumer decisions – with the right touchpoints and customized content. This shift comes along with the expansion of our direct-to-consumer channels and custom branded websites, which have proven to be great touchpoints with our end users.