L'Oréal plans ecommerce push

26 June 2012

PARIS: L'Oréal, the cosmetics giant, will begin selling a variety of products directly to consumers via the internet in its home market of France next year, in an important test case for the firm.

The company, which manufacturers brands like Garnier, Lancôme, L'Oréal Paris and Maybelline, is currently considering the exact approach it will employ in a bid to boost revenues from the ecommerce arena.

"I don't know if it's going to be Amazon, online Carrefour or online your own site, or a combination of all three," Jean-Jacques Lebel, president of L'Oréal consumer products, told the Financial Times.

More broadly, Lebel suggested that consistency and clarity would be important, to ensure that both the needs of the company and its customers were met.

"At the end of the day, you don't want a system [meaning] you create such pricing havoc that everyone is unhappy," he added.

L'Oréal has already made some steps in this space, licensing its Agnès b Club des Créateurs de Beauté, which sells the brand online in France and Japan, where it has proved to be "quite successful".

It has also turned to the web as a means of driving growth in China, such as through a partnership with Taobao Mall, the ecommerce platform, which also has similar deals with Olay, Neutrogena and Davidoff.

However, L'Oréal's consumer products arm does not sell goods via the web in the US, although its luxury wing and Kerastase haircare line do boast an online presence.

Despite enhancing these capabilities, Level argued that bricks and mortar outlets will remain vital to the organisation's future strategy, as they offer unique benefits to brands.

"Nothing replaces the stores in our categories," he said. "I don't think there's a model that says you do it [all] online, not for our types of products. You have to be there physically on shelves to create relationships with customers."

Recent research from Médiamétrie, the insights provider, and FEVAD, the industry body, based on a survey of 3,257 internet users found that 86% researched products online prior to purchase.

Overall, some 31m people in France made ecommerce purchases on the web during the first quarter of 2012, up 11% year on year. They spent a combined €11bn during this period, up 24% on an annual basis.

Data sourced from Financial Times; additional content by Warc staff