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Cosmetics giant L\u2019Oreal is boasting impressive fourth-quarter sales, last week posting higher-than-expected revenue growth, totaling $9.56 billion.\u00a0<\/p>\n\n\n\n
In 2020, L\u2019Oreal\u2019s online revenue jumped 62%, accounting for over a quarter of total sales. And in China, 60% of total sales were online. <\/p>\n\n\n\n
L\u2019Oreal\u2019s chairman and chief executive Jean-Paul Agon noted that China has been a \u201creservoir\u201d of growth for the company, where opportunities are wide open.<\/p>\n\n\n\n
But the France-based brand, which also owns Maybelline and Lancome, credits the boost in sales to the post-pandemic rise in online shopping, as well as the easing of some lockdown restrictions which has helped hair salons sell more professional products.\u00a0<\/p>\n\n\n\n
For L\u2019Oreal, the pandemic has \u201cdrastically accelerated\u201d the rise of digital trends, such as the \u201cdigitalization of salons, e-commerce and the rise of independent stylists,\u201d said Agon, in an earnings call. \u201cWe were able to accomplish in just a few months what would have normally taken years.”<\/p>\n\n\n\n
Agon explained that the digital teams at L\u2019Oreal were able to quickly adapt, by going full-blast into e-commerce and investing in direct-to-consumer.<\/p>\n\n\n\n
\u201cDirect-to-consumer is the most strategic channel of all because we control the full customer experience, the full data,\u201d said Agon. <\/p>\n\n\n\n
E-commerce now accounts for 37% of L\u2019Oreal Luxe sales, and Agon expects that number to grow to 50%. <\/p>\n\n\n\n
“We are now a digital-first company that is making beauty more connected, more social and more conversational than ever,\u201d said Agon. \u201cOur leadership in e-commerce, as you’ve seen, is more powerful than ever. Online sales were an absolute game-changer, increasing by plus 62%, growing 1.5x the market and reaching 27% of our total sales. This impressive surge was seen across all categories, all divisions, and all regions. E-commerce is now the first for L’Or\u00e9al and we have, for the first time ever, 2 e-billionaire brands as L’Or\u00e9al Paris and Lanc\u00f4me each surpassed EUR 1 billion in e-commerce sales.”<\/p>\n\n\n\n
\u201cThe COVID crisis allowed us to leverage our digital leadership. We reallocated resources everywhere to further strengthen our e-commerce firepower,\u201d added Alexis Perakis-Valat, president, consumer products. \u201cThanks to ModiFace<\/a>, we rolled out digital services around the world in a few weeks. And our brands strengthened their digital connection with consumers. In the U.S., for example, NYX Professional Makeup was recognized by Gartner as the country’s most digital-savvy brand across all channels and categories.”<\/p>\n\n\n\n Partnerships have been a key to the beauty brands\u2019 digital strategy in the past year. To advance its presence online, L\u2019Oreal has teamed up with tech and e-commerce juggernauts like Google<\/a>, Pinterest<\/a>, and Walmart<\/a>.<\/p>\n\n\n\n What comes next, now that L\u2019Oreal has \u201cvolted 10 years into the future\u201d (as deputy CEO Nicolas Hieronimus described it)? <\/p>\n\n\n\n “Today, digital is embedded at all levels of the company. Tomorrow, we will take digital to the next level, thanks to the power of real-time data and fast-evolving technology,\u201d said Hieronimus. \u201cData would allow us more personalization in terms of engagement and of product creation. We’ll invest in new services in a world where online and off-line will be seamlessly intertwined.”<\/p>\n\n\n\n