L’Oreal Using Facebook To Show Buyers Virtual Makeup : A Winner?

by Trefis Team
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LRLCY
L'Oreal
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L’Oreal (OTCMKTS: LRLCY) recently announced that it plans to use its newly acquired augmented reality (AR) entity ‘Modiface’ to partner with Facebook on virtual makeup trials. The company is just as excited by the opportunities presented by virtual and augmented reality as the new age consumers are. With its current innovations making waves in both Europe and Asia, it will be an exciting opportunity for L’Oreal to leverage this new technology and to discover which other corners of the globe they’ll be brought to.

L’Oréal To Use Augmented And Virtual Reality To Create In-Store Experiences

In order to maintain its leading position, L’Oreal has constantly innovated over the years. In 2018, it announced using digital technology to augment its in-store experiences. By bringing AR into the mainstream, L’Oréal and Modiface are reshaping the beauty experience and this will be brought to life on Facebook. Modiface, is a company that uses AR and artificial intelligence (AI) to track facial features and overlay specific types and brands of makeup on them virtually. This AR experience can be used by millions of consumers across the world to discover L’Oréal products and brands through realistic, engaging, and meaningful beauty experiences. Given the company’s strong online business and growing popularity of online purchases, this step is likely to contribute to L’Oreal’s growth in the near term.

In the first half of 2018, L’Oréal’s e-commerce revenues accounted for 9.5% of the total sales, up from less than 5% three years ago. Thus, this collaboration of virtually trying on makeup through a social media platform is likely to drive higher e-commerce sales for L’Oreal. In the near future, tools, such as AR, will be a way for traditional retailers to digitally transform their business and boost sales online and in-store through omni-channel efforts.

L’Oreal Is Seeing further growth In Asia and Europe Market

L’Oreal’s sales from emerging markets, such as Asia-Pacific, Latin America, Eastern Europe, Africa and the Middle-East, have been  growing strongly, constituting nearly 40% of its total sales. Growth from Asia-Pacific topped with 22% y-o-y in the H1. In comparison, sales growth from other geographies was in single-digits. Thus, the anticipated growth in sales of luxury products through AR and VR is prompting the company to continue investing in these regions.

L’Oreal stands out as an early adopter of omni-channel in the Asia-Pacific region, particularly China. The new technology weaves online and offline shopping into one seamless interactive experience for consumers. Thanks to e-commerce and the new AR/AI technology, this is literally helping L’Oreal in bringing Paris to Asian consumers virtually, and thus creating new avenues for growth.

We believe that L’Oreal has the key advantages in terms of innovation, brand power, digital prowess, and the quality of its teams all over the world. This is likely to drive growth for the company and enable it to maintain its leading position in the Beauty market. Please refer to our dashboard analysis on L’Oreal’s Growth In The Next 2 Years.

 

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