L’Oreal has been reinventing its marketing model to embrace digital and beauty tech for a number of years, meaning it was in a good position to adapt to changing consumer demands when the coronavirus pandemic struck. While many brands pulled back on marketing spend when COVID-19 hit and countries started going into lockdown, L’Oreal instead shifted its spending strategy. At the peak of the crisis, it was spending 77% of its media investment on digital. During lockdown the company continued to invest from offline to online in a bid to keep consumers interested in its products and widen its consumer base.
L’Oreal brands have all embraced the trend of social commerce and have experimented with different models — influencers, e-beauty advisors, as well as consumers. The rise of e-commerce during the pandemic has also made marketing more conversational, with L’Oreal having a 40% rise in interactions with consumers across channels like Facebook Messenger and WeChat to pass 60 million interactions this year. That increase has given L’Oreal more data on which to base business decisions.
Following the COVID-19 pandemic, L’Oreal launched its first ever digital makeup line. The move came as a result of more people being forced to work remotely during the pandemic which in turn has led to an increase in the number of people using technology for face to face interactions.
Despite success in its e-commerce business, the pandemic did however pose challenges for L’Oreal with Asia-Pacific being the only region that reported growth in 2020.
Mainland China generated a significant spike in sales up 27% for the year. According to the company, growth had largely been boosted by strong omnichannel demand and a dynamic e-commerce business; which accounts for more than 50% of its business in the Chinese market.
L’Oreal provides beauty for over 100 million people in China and has seen an expansion in the middle to upper classes as well as Millennials over the past few years. The penetration of online shopping in China in terms of potential consumers (internet users) is low compared to developed countries, meaning there is ample room for growth and provides expansion opportunities for L’Oreal.