DUBAI: The coronavirus pandemic saw brick-and-mortar stores drop their shutters and pivot to online channels. Although online sales in some categories were slow, consumers were quick to adopt due to a lack of in-store options during the COVID-19 lockdown. But the e-commerce trend continued even as restrictions were lifted owing to the convenience and quick delivery times.
The global beauty industry, which generates SR1.9 trillion ($500 billion) in annual sales, saw a weak first quarter in 2020 with widespread store closures, according to a 2020 report by McKinsey & Company. From producing hand sanitizers to introducing innovative ways of shopping online, beauty brands had to change the way they market themselves.
With this as the backdrop, Arab News spoke to Mehdi Moutaoukil, L’Oréal Middle East’s CMO about e-commerce, digitization, and the way forward.
Tell us about L’Oréal’s presence in the e-commerce space prior to the pandemic.
As a digital-first company, e-commerce has been an integral part of L’Oréal’s consumer journey well before the pandemic. As the No. 1 beauty group in the market, we were the first movers in beauty to develop long-standing strategic partnerships with key e-commerce players to grow the e-beauty category and elevate the consumer experience.
We also invested very early, before COVID-19, in our capabilities to be able to build this channel in the region, both from a people as well as tools and technology perspective.
How did that strategy change during and post-COVID?
The pandemic accelerated our e-commerce business, especially during the lockdown period. Last year, we delivered triple-digit growth with e-commerce compensating for almost half of the brick and mortar losses. We also upskilled our entire organization’s digital skills and launched more direct-to-consumer platforms such as Yves Saint Laurent Beauty.
Since then, we have continued the e-commerce momentum, and today all our brands are available online on key e-commerce platforms such as Noon, Amazon, Namshi, Ounass, Sephora, Lookfantastic, Basharacare, Boutiquaat, and others. We have also developed personalized beauty experiences that are powered by artificial intelligence tools, providing consumers with access to the latest beauty innovations that allow them to discover, try and purchase the products they love.
During the pandemic, it was also imperative for us to remain connected to our consumers, so we ensured that we maintained a communication channel by launching a platform called Beauty Tracker in March 2020. It served as an effective tool allowing us to connect with our consumers on an ongoing basis via focus groups or personalized one-on-one sessions. These interactions allowed us to take a deep dive into consumers’ shifting perceptions on beauty, the challenges they were facing, their underlying expectations from brands, and their evolving beauty requirements.
Can you share some insights with regards to in-store versus online shopping?
53 percent of consumers in the GCC countries have spent more time browsing and shopping online during the pandemic and they expressed that they would continue to shop online post the pandemic.
E-commerce is now well established in both Saudi Arabia and the UAE, as 72 percent of GCC consumers have purchased more beauty products online since the beginning of the pandemic (versus 79 percent offline) and is poised to stay as a key channel for beauty.
In September, with the progress achieved due to the vaccine rollout, we witnessed the bounce-back of brick-and-mortar shopping in the beauty category, mainly in the UAE. But, there have not been any direct consequences on digital purchases, which have remained stable over that period.
Today, online and offline shoppers demand an omnichannel experience, and the path of purchase has now merged. Consumers across the GCC expect personalized digital experiences and quick online services, which have played an integral role in their decision-making process when purchasing products as well as their overall shopping journey. We have noticed this increased demand amongst millennials and the Gen Z generation.
Online shoppers are also now demanding faster delivery, which is why players such as Namshi and Bloomingdale’s are offering same-day delivery and Ounass is delivering within a few hours. Moreover, online consumers are demanding a more expansive assortment locally to avoid longer shipping times of products from overseas.
What are some of the initiatives L’Oréal introduced based on these insights?
We have been committed to delivering the in-store experience to the customers’ doorsteps while preserving the experience and try-on component. For instance, we launched digital try-ons across our beauty brands’ websites such as Yves Saint Laurent Beauty and Lancôme where consumers are able to try makeup virtually. We have implemented the same concept with nail polish brand Essie with a virtual try-on salon that makes for a convenient and fun online shopping experience.
As per Modiface, the augmented reality and AI company acquired by L’Oréal, try-ons usage was up 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 amongst consumers.
Another key online service our luxury brands use is the ‘Online Concierge’ feature, which allows consumers to engage with our beauty advisors, get personalized recommendations on products as well as learn more about their key features. This service continues to be crucial as more and more people are accustomed to online shopping even after the pandemic.
What about L’Oréal’s in-store versus online sales?
The past few years have been integral to the group’s digital journey, and as we propel forward, our digital activation strategies will become more and more data optimized. E-commerce sales are now above 27 percent of our sales globally and we are investing to be ready for when e-commerce represents 50 percent of all sales. That does not prevent the group from running on both feet as brick-and-mortar channels are picking up at 17.8 percent and reinventing themselves.
How would you sum up L’Oréal’s marketing strategy during the last year?
In recent years, our overarching strategy across all our brands has been to adopt a personalized approach to beauty by leveraging research and development, technology, and AI to cater to the unique needs of all our consumers. We continuously evaluate the ecosystem in which our consumers operate and adapt our marketing strategy in line with their evolving beauty requirements.
We have also shifted more towards digital in our marketing strategy over the past few years due to the massive shift in the consumer journey, which is now largely on mobile and web. We have been creating consumer engagement that is designed for digital-first and data-driven consumer decision journeys — with the right touchpoints and adapted content. This shift comes with the expansion of our direct-to-consumer channels and individual brand websites that have proven to be great touchpoints with our end consumers.
