Ecommerce sales at L’Oréal surged by 62.5% in 2015, as the French-owned health and beauty group stepped up its investment in digital content and apps.
The company, which reported its annual results last Thursday (12 February), said ecommerce sales stood at €1.3 billion (£1 billion) last year and accounted for 5% of its global sales. In 2014, ecommerce sales were worth €800 million.
Apps have been a particularly big focus for L’Oréal of late: in 2014, L’Oréal launched Makeup Genius, a selfie app that allows users to test out how various L’Oréal products look on them. The app has won a slew of awards, including gold and silver gongs at the CLIO creative awards. In September 2015, L’Oréal said the app had been downloaded 14 million times, including 4.7 million times in China.
It has just followed this with The Studio Pro Styling App, launched in late January, which allows users to try out different hairstyles.
In an interview for a special Grocer report on ecommerce (out later this week), L’Oréal UK general manager for commercial operations Stijn Demeersseman said he wanted 20% of sales in his division to come from ecommerce by 2020.
A growing number of brand owners are chasing ecommerce sales through their own direct-to-consumer channels, but while L’Oréal is doing so in France through loreal-paris.fr, there were no plans to follow suit in the UK, said Demeersseman. Direct-to-consumer channels had their part to play for some higher-end products, but his portfolio – which includes the L’Oréal lines typically sold through major supermarkets - was focused on driving ecommerce sales through retailers.
“In luxury, direct to consumer will be a critical element, but less so for the brands in my portfolio,” he said. “What we want to do is drive massive traffic. We are already one of the biggest traffic drivers in the UK. It’s about building buzz and consumer engagement around our products, but ultimately the goal is to drive traffic to our retailer partners and to drive sales.”
2015 results
Total sales for L’Oréal stood at €25.3bn in 2015, up from €22.5bn in 2014. Operating profit was €4.4bn, up from €3.9bn a year earlier.
“In a year marked by a worldwide economic slowdown and increased international volatility, L’Oréal achieved strong growth in 2015,” said chairman and CEO Jean-Paul Agon.
Société Générale upgraded its rating for the stock from hold to buy following the results, noting L’Oréal’s “strong topline momentum in Q4 bodes well for 2016”.
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