L’Oreal’s Digital Progress Continues With Its Investment In Partech Ventures
In line with its continuous digital initiatives, L’Oreal–arguably the most digitally advanced beauty company–has announced its decision to invest in an early stage fund that is managed by Partech Ventures, a venture capitalist firm based in Paris. This investment comes just after a few months since L’Oreal’s partnership with Founders Factory, a global digital and incubator based in London. L’Oreal’s current investment is in line with its strategy to help the most promising early stage startups. Partech Ventures, in turn, will assist L’Oreal with its prediction tool, artificial intelligence, and related features, to help it better understand the customer’s relationship with beauty products.
L’Oreal has promised to invest a few million euros into the Partech Ventures fund, alongside companies such as Accenture, Nokia, and the United States’ Cisco. According to L’Oreal’s Chief Digital Officer, Lubomira Rochet, such investments will aid the company with communications about the brand, with supply chain initiatives, and of course, with research and innovation. In 2012, L’Oreal had established its own startup center in Silicon Valley. It also opened its first digital store in Paris in 2015, which helps customers access Sephora’s online range through digital features.
L’Oreal had always been the forerunner for digital initiatives in the beauty industry. The company spends over $1 billion in research and development annually. In early 2016, L’Oréal had chalked out a plan for a large scale expansion of its online media as the company predicts that the importance of eCommerce will increase in the future. A few of the initiatives taken by the company in 2016 include:
- The introduction of a stretchable skin sensor designed to monitor ultraviolet light exposure via a wearable called My UV Patch.
- In September, L’Oreal Paris roped in five of the most influential YouTube beauty vloggers from the UK who together have a combined reach of around 5.5 million viewers. These five vloggers (“video bloggers”) will join forces with the brand’s global digital influencer, Kristina Bazaan, to help maintain L’Oreal Paris’ position as the ‘go-to digital beauty brand.’
- L’Oreal entered into a global alliance with augmented reality app company Modiface to launch several beauty apps.
- It is also the first company to offer a make-lens on Snapchat.
In 2015, over 5% of its sales were contributed through online sales and its digital team grew from a mere 150 a few years ago, to the current figure of over 1,000. It also spent over 25% of its advertising spend on digital marketing and the proportion is expected to grow in the future. In fact, digital growth is of such importance to the company that in 2014, it created the new position of Chief Digital Officer.
We expect L’Oreal’s global market share in each of its hair care, skincare, fragrance, and makeup segments to significantly expand, as L’Oreal keeps capturing more beauty users through its ever rising digital presence.
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