People & Culture, Performance & Measurement

Who is doing digital transformation well?

culture

 

L’Oreal prospering in the “experience economy”

I often get asked which traditional company is doing digital transformation well? L’Oreal and Starbucks are the immediate organisations that come to mind. Both these powerhouse brands have been able to effectively embrace digital opportunities and make it work, integrating with the rest of their business with the common theme of strong leadership and a solid culture at the heart of their success. These respective brand leaders have transformed their traditional transactional models to align more with contemporary “experience exchanges” – synchronising both offline and online assets really well.

For the purpose of this post lets focus on L’Oreal.

“L’Oréal has devoted itself to beauty for over 105 years. With its unique international portfolio of 32 diverse and complementary brands and employs thousands of people worldwide.”

Their strategy is focused on delivering exceptional products and customer experiences regardless of the touch point and spanning across all continents. With a global marketing budget of over $7.5 billion euros the complexity of executing requires rigor and trust in their market specific teams. The challenge is not just “being” digital but ensuring their brands are never compromised where consistency of message and experience is paramount.

Training at scale and with purpose

In order to achieve success at scale L’Oreal is committed to up-skilling its workforce and has hired over 1400 digital specialists across their many brands and over 5000 employees have completed basic digital marketing training modules with another 500 to undertake the course in the next 3 months.

DTS research along with our expert SME panel insights consistently shows that leadership and culture is the most important element when driving transformation and by making as many employees digitally literate their investment will definitely up-skill keen employees whilst retaining key staff. The sum of all these efforts is increased revenues and profits

Executing in concert

L’Oreal teams’ ability to execute all the integrated elements across multiple campaigns and geographies is nothing short of phenomenal!

L’Oreal use their brand ambassadors effectively, exploiting the aspirational halo effect that these high profile models and celebrities bring to the brand specific endorsements. I was present at their Augmented Reality Genius Makeup app press launch and this event ran like clockwork – leveraging their ambassador’s appeal, relationships with magazines and online publishers and the centerpiece was an impressive app development execution. The end result was over 10 million downloads, social reach in the millions and over 65 million product trials. Oh, and it won 4 Cannes Innovation awards. Now that’s doing digital integration at scale!

The future is bright

According to the 2016 financial reports e-commerce only represents 6% of total sales and grew 31% yoy. So there is obviously plenty of scope to keep pushing ecommerce along with data collection, social media and original video production. L’Oreal’s ability to establish a one-to-one consumer relationship is relatively new given their legacy sales channels via bricks and mortar retailers. With this new paradigm it places the company in an enviable position to further consolidate its market leading position and for eCommerce to continue to contribute to their overall sales.

Think of the scale in which it captures data and how it can continue to enhance each of its customer experiences! During 2016 the company was stated as having “1 billion visits” across all its online properties so you can imagine the amount of rich data potential.

Investing in the future

Not to be complacent L’Oreal has partnered with tech incubators/accelerators and is nurturing upcoming fashion/cosmetic related technologists and in the process providing these companies with the platform and resources to grow. Of note, this association also provides L’Oreal with the ability to tap into developing cultural frameworks, typically used by technology startups that operate at speed utilizing “lean & agile” philosophies. They partner with Founders Factory based out of London:

“This will allow L’Oréal to deeply connect itself to a global ecosystem of world-class startups and entrepreneurs operating in the field of beauty, in line with L’Oréal’s CEO Jean-Paul Agon vision of the transformative power of digital for beauty.”

DTS ranks L’Oreal as best in class

In relation to the DTS scoring framework L’Oreal does very well and so does the entire cosmetics industry as a whole. The industry is highly commended for embracing digital and integrating with existing models and structures. L’Oreal is a prime example of a rational consumer first business transforming despite its size and its heritage. Their competitor set is quickly making up ground with the likes Shiseido investing in acquisitions and recruiting digital natives to their global operations. I’m eagerly going to monitor this space moving forward.

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