L’Oréal CEO consumer products says digital is helping it partner with consumers.
The first thing is we are passionate about beauty. We have been passionate about beauty for more than 100 years – we’ve become quite knowledgeable about it – and we are only interested in beauty. We call our strategy universalization, by which we mean globalization that captures, understands and respects differences – be they differences in desires, needs or traditions – to meet the beauty aspirations of women and men all around the world.
In the modern cosmetics market, there are four billion consumers. We already reach a billion of them, and our goal is to reach another billion. To do that we are accelerating the deployment of game-changing innovations, strengthening our make-up business, developing products to suit rising trends and maximizing our digital clout. Many of our brands are well loved on digital: Maybelline New York has more than 30 million followers on Facebook. And this has helped e-commerce sales of our consumer products: they grew more than 30 percent in 2016.
Digital is an inspiration for innovation. It has made our relationships with consumers richer. It has made it easier for us to reach expert consumers, particularly in professional make-up with our NYX Professional Makeup business. We co-created Colorista, a hair color range for Millennials, with influencers.
At L’Oréal, we say it’s healthy to worry – about the market, about disruption, about technology. And that has to be the mindset throughout the company. Social listening is a way of life for us. It helps us to understand the latest trends and get there first. We invest more than US$1bn a year in R&D, because only strong research can create cosmetics that generate real results. But innovation is a dialog between science and marketing – so we listen to consumers on every continent, observe their behavior and explore their beauty rituals. That way, we can invent products in a country, for that country.
And we disrupt ourselves – L’Oréal still has an entrepreneurial spirit. You can make proposals here and nobody will say: ‘We’ve never done it this way’. You can make your proposal, we listen, and debate. You have to fight for your idea, but there are no taboos.
Beauty is resilient – in 2016, the world cosmetics market grew 4 percent. At L’Oréal, we have a saying about needing to be poets and peasants and, like peasants, we have two feet on the ground. That helps. We’ve been living in a volatile, uncertain, complex and ambiguous world for a while, but that’s truer now than it was even a year ago.
Talent. At some companies, process is more important than people. At L’Oréal it’s the other way around. It’s about people. What do we mean by that? Let’s take the Asia-Pacific market: if you’re going to thrive in countries so different from your country of origin, diversity has to be at the heart of everything because that’s you how you understand the cultural differences. In the world of beauty, Asia Pacific is a center of creation – there are trends starting now in China, Japan and Korea that will invade the world – and we need to be the first to understand them to succeed there and elsewhere. Diversity is key if we’re to catch those trends early.