L'Oréal, A Leader in the Global Beauty Marketplace

L'Oréal is a French cosmetics company. As a leader in the global beauty marketplace they are well-known for their product research and development divisions that support enviable market share and consistent positive growth, even under the most challenging economic conditions and environments.

The Hauts-de-Seine, France-headquartered cosmetics giant owns 36 brands, and continues to expand their holdings and product lines. Today, they offer a wide array of beauty products sold in retail outlets and eCommerce venues for every budget. Beauty is their only business. And, constantly evolving with consumer needs has proven profitable.

In 2019 alone, the organization registered almost 500 patents for new products. For many companies, the 2020 arrival of COVID-19 was devastating. Even though early 2020 was challenging for the brand, L'Oréal closed the year with impressive growth rates and operating margins.

A Quick Glance At The Numbers

Due to the withdrawal of travel restrictions and a national stimulus package, China enjoyed an impressive 2020 Q4 boom. They achieved an almost 27 percent increase, nearly seven points higher than the like-for-like comparison to Q3.

Overall, the organic top-line growth came in at 4.8 percent, with 2020 operating margins ending at 18.6 percent, Not bad for a year when COVID-19 restrictions threatened to eliminate all in-person retail sales.

It was a challenging year, but the organization pulled out a “solid ending,” according to Bank of America managing director Eva Quiroga.

L'Oréal's Bounce Forward

While many retailers are still trying to bounce back from 2020 shortfalls, L'Oréal closed 2020 prepared to bounce forward with new products and services. The research and development team did not take the year off. Instead, they continued listening to their customers and exploring innovative solutions to meet the evolving needs of individuals.

Twenty-twenty say many new products research endeavors reach the marketplace. Twenty-twenty-one will see the launch of a new app designed as a tool for influencers who are loyal to the L'Oréal brands. The app allows users to try on new colors and skin care products based on artificial intelligence (AI) that detects skin tone, surface flaws and other features.

When Jean-Paul Agon was Chairman and Chief Executive Officer at L'Oréal he said, “Our Brands are our Titles of Nobility,” but that did not mean that customers weren't the driving force in the kingdom. He knew that an innovative top-down company culture drives stronger connections by recognizing the inherent difference of their customers, something L'Oréal values and cultivates daily. The positive growth seen under extreme conditions is a testament to their customer-focused business model.

Embracing Digital Technology To Connect

A global cosmetics giant like L'Oréal could only achieve success seen in 2020 by enabling stakeholders to achieve their dreams. They have a digital toolbox that allows all stakeholder — investors, social influencers and end-users — to access rich, targeted content that drives engagement. They pursue individuals loyal to their brands, encouraging those consumers to become active ambassadors that expand their reach.

To do this, they must constantly evolve as needs change and offer products designed for specific social groups, cultures and financial constraints. One way the company does this is via social media management. The Active Cosmetics Division created a Spanish platform called “Tu piel y tu.” (That means "Your Skin and You" for English speakers). The platform enables customers to access skin and hair care advice and consult with industry specialists about personal beauty issues. There are also opportunities to watch tutorials about how to use products and a forum that connects brand employees with their customers and other product users. In 2019 alone, more than 12 million conversations took place online between company groups and consumers. THAT is how a brand demonstrates responsiveness and ensures they know what their customers expect.

Is This Growth Sustainable?

As long as the brand stays focused on individual relationships and a desire to evolve as consumer needs change, the brand should continue to enjoy steady growth and expansion. Their business model has proven to be sustainable. That focus also includes keeping an eye on environmental sustainability. Something that is important to most consumers today.

L'Oréal has heard their concerns. When Nicolas Krafft worked for L'Oréal, he played a vital part in shaping the international presence for the organization. His responsibility to grow market share in complex environments included developing and implementing sustainable practices.

Krafft believes that sustainability initiatives provide opportunities that bring the company together with a shared purpose. Announcing sustainable goals and milestones achieved during company-wide meetings helps employees, investors and principals connect in new ways.

In keeping with these values, L'Oréal recently created a new position, Director of Sustainable Finance. Adding a new position responsible for ensuring the company incorporates carbon cost and economic impact on financial activity is a nod to their loyal customers and a reminder to industry peers who haven't made the commitment yet that consumers have a choice in which brands they follow.

A United Company Prepares For Growth

Throughout the L'Oréal Groups a shared passion for Beauty flows freely. From a passion for innovation and new beauty product lines to a passion for new sustainable initiatives that boost corporate responsibility and keep everyone informed, all stakeholders benefit.

Emerging product lines include the app mentioned earlier, a solid shampoo that is as gentle as liquid shampoo, but contributes zero plastic waste to the landfill and a new personalized E-diagnostic hair care service from Kérastase. All environmentally friendly, and all something designed to empower users to personalize their beauty experiences.

The company embraces AI and Augmented Reality while still striving hard to maintain personal relationships build on human-led conversations.

All these policies demonstrate a genuine desire to grow the brand focused on delivering the highest quality beauty experience available to everyone. It sounds like a solid business model that positions the company for continued growth, constantly evolving while they stay true to their legacy values and principles.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes