L’Oréal’s Next Technology Move: Virtual Reality To Train Hairdressers
L’Oreal (OTC:LRLCY) is the industry leader in digital initiatives, way ahead of its competitors. While it is innovating in e-commerce and social media to reach out to consumers, the company is now working on a new technology to solve a notable business challenge: training professional hairstylists. L’Oreal has partnered with VR (virtual reality) software maker 8i to create a virtual reality curriculum for its Matrix Academy — a training program for hairstylists who use the company’s professional products. Through this partnership, the company has developed an immersive training program where trainees can observe a virtual hair dresser style a virtual client’s hair from every angle. This medium of training can prove to be more effective compared to the YouTube videos being currently used by the company for out of town trainings and classes. This initiative shows how L’Oreal is using new technologies for business use and not just for enhancing consumer experiences. This can drive growth of its professional division.
Within L’Oreal, the professional division’s biggest growth secret is constant innovation. This is clear in the recent move to use virtual reality to train professionals who use these products. It shows that the company is continuing on the path of the innovation. In the last year, L’Oreal trained around 700,000 hair dressers to effectively use its products. (Read Here Are The Key Drivers For L’Oreal’s Professional Products Segment). Better training tools for these professionals can boost the use of its professional products driving revenues for the company in the long term. Hair Care is a significant segment for L’Oreal. According to our estimates, it accounts for nearly 30% of the company’s valuation. We expect L’Oreal’s market share in the global hair care market to increase steadily from nearly 19.5% in 2016 to around 22.5% by the end of our forecast period.
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A faster pace of increase in this market share can impact L’Oreal’s valuation positively. There will be a 10% upside to our price estimate, if this market share increases to around 27% by the end of our forecast period.
According to L’Oreal, the company is always experimenting with new technologies to solve for specific business challenges. Virtual Reality can have a huge impact on the beauty industry and L’Oreal is an early adopter of this technology, boosting its professional products division. We believe as the company continues its innovation in technology, using it effectively for consumers and to solve business challenges, these initiatives will drive growth for L’Oreal in the long term.
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