Here’s L’Oréal India’s post-covid business strategy

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Updated: Jun 12, 2020 7:35 PM

Besides building tech-enabled online retail, L’Oréal to focus on products across price points, among others

E-commerce has become a bigger bet for the brand now, claims Kavita Angre, director, Consumer and Market Insights, & Media, L’Oréal IndiaE-commerce has become a bigger bet for the brand now, claims Kavita Angre, director, Consumer and Market Insights, & Media, L’Oréal India

The coronavirus pandemic, and the resulting emphasis on hygiene, has given a new twist to the beauty business. Kavita Angre tells Venkata Susmita Biswas how the cosmetics industry could benefit from tech-enabled online retail, L’Oréal’s focus on products across price points, and more. Edited excerpts:

What has been the impact of the pandemic on the cosmetics industry?

The impact has been varied. There is greater focus on hygiene; therefore, people have continued to use cleansing products. People are also using skincare products as repeated washes can dry the skin, as well as shampoos.

In the case of hair colours, 80% of users either coloured or wished to colour their hair while stuck indoors. This has demonstrated that hair colour is a ‘need’ category. As the markets are opening, we are seeing a huge pent-up demand for hair colour products. As expected, the usage of cosmetics declined during the lockdown. Since masks are now mandatory, we expect a shift from face make-up and lip make-up to eye make-up, as people resume work and other activities. Among lipsticks, we anticipate a shift towards products that are transfer-proof. In the short term, our focus will be on the skincare and haircare categories.

Will your reliance on e-commerce increase, as fewer people may opt to shop offline?

E-commerce has become a bigger bet for us now. We found that 18% e-commerce purchases in the personal care and beauty category were from first-timers. Earlier, there was a barrier for online purchases of beauty products, because one wanted to touch and experience the products at an offline store. The pandemic and lockdown have hastened the familiarity with digital as a medium and e-commerce as a channel. With the barriers reducing, we expect to reach a far higher proportion of the population that, perhaps, did not have access to brands like ours in the far-flung parts of India. There is a huge possibility of penetration-led growth that we can now access.

We have accelerated our work on digital transformation. We have a tool called ModiFace, a VR-led solution, that lets users see how a shade of lipstick would look on them. So, the pre-shopping experience of ‘touch, feel and try’ can be substituted by digital today. For our hair colour category, we give consumers an opportunity to talk to our hair colour experts, and then check how a colour looks on them using VR. A purely offline experience has now been enabled online.

What challenges do you perceive on the offline front with the lockdown easing?

From a demand perspective, consumers will manage their routines and shop when they can, and this was demonstrated by the stocking up behaviour that we saw when we went into lockdown. From a supply and sales perspective, there could be some challenges. If only half the shops are open on one day, and half on another, one will have to figure out efficient data and technology-led ways to solve the problem.

How are you helping your salon partners get back in business?

While we were in lockdown, we conducted over 4,250 training sessions online for 50,000 hairdressers and beauticians to help them upskill. Now that salons are opening, we have distributed back-to-business guidelines to 45,000 salons from our network, guiding them on safety and hygiene measures. From a business point of view, we have given our salon partners credit extensions to ease their burden. Our research shows that 60% of the consumers want to go back to salons. Yet, consumers are expected to be a little wary. So, we are helping salons craft shorter and quicker services.

How will you tackle the low spending on non-essential products?

Because people may be facing a cash crunch, it is important for all businesses to have the portfolio that stretches across the price pyramid. L’Oréal straddles this pyramid. Making sure that we have price points that are accessible, will be our key focus. This will make sure that the same quality of products from a reputed and loved brand are available at pocket-friendly prices.

For example, we have Garnier Black Naturals which costs Rs 37 per sachet, and L’Oréal Paris has a mini hair colour kit at Rs 199. In the face cleansing category, too, we have small-size packs.

Read Also: How health-tech companies can remain relevant in these times

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