Between viral trends, shifting consumer behavior, and supply chain tumult, being set up for success in beauty today takes a lot more than a good primer. At Shoptalk Europe in Barcelona, Spain, earlier this month, global beauty leaders from L’Oréal, Coty, The Estée Lauder Companies, and LVMH, shared the foundations they’re laying to navigate today’s (and tomorrow’s) challenges.
L’Oréal and Coty on social commerce
During a panel focused on meeting future shoppers’ needs, Mark Elkins, GM of global e-commerce at L’Oréal, discussed the beauty giant’s approach to social media and social commerce.
Beauty is an “emotionally engaging and socially engaging” business, and he noted that 90% of consumers turn to ratings and reviews to inform their purchases. Meanwhile, omnichannel shoppers have jumped from 10% to 50% of L’Oréal’s business in the last five years as more consumers shop online, making social touchpoints like TikTok increasingly crucial, he said.
L’Oréal was an early partner of TikTok, but mastering social commerce isn’t easy (and requires lots of fees—paid to the platform, media partners, and creatives and affiliates).
“You’ve got to feed the content monster, which can be very costly,” he said, noting that working backward from consumer behavior to fully grasp how the algorithm works has been essential. “It’s not just a question about throwing media dollars at the platform and hoping it will work.”
Elkins said success requires integration of teams from media affiliate management to supply chain to enable real-time decision making, which has made the over-century-old company feel like a startup.
And in a panel on community building through social commerce, influencers, and creators, Coty’s chief digital officer Pierric Duthoit admitted nobody really knows how to create virality on TikTok, but it’s all about “test and learn” for the beauty company. Working with influencers and creators with “same DNA” as the brand helps minimize risk, but there is a sense that you have to “let it go” and trust that if “product is good, it’s gonna be okay.”
The Estée Lauder Companies’s supply chain regionalization
To “weather the storms” around tariffs and geopolitical uncertainty, the Estée Lauder Companies has turned to regionalization, a journey it began a decade ago, Jamal Chamariq, the company’s SVP of global supply chain, said in a panel on supply chain resilience.
Its global supply chain strategy revolves around the philosophy “source where you produce as much as you can and produce where you sell as much as you can,” he said.
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Several years ago, for example, when Clinique’s Black Honey lipstick went viral, selling out at many retailers, the company worked to establish a “higher degree of resiliency.” Now it’s shortened product development timelines and distances between suppliers, and utilizes Microsoft’s AI-powered ConsumerIQ for demand planning.
Now, Chamariq said, 75% of what it sells in the US is produced there, as the same goes for EMEA. That’s allowed it to quickly pivot when, say, a distribution center goes down for 24 hours, which has subsequently helped strengthen its retail partnerships.
“Everyone is facing the volatility and that joint business planning will help us actually, to weather the storms together, versus one of us, managing and handling the burden,” he said.
LVMH Beauty’s data and AI strategy
LVMH’s beauty sector, which includes brands like Benefit Cosmetics and Fenty Beauty, is focused on “unleashing” data, and Julie De Moyer, its chief data and AI officer of beauty brands, and Lou Bennett, its global VP of customer strategy, outlined five steps on how to do it.
The first, (“dream it”), is envisioning how data and AI will boost the customer journey, which Benefit Cosmetics did last year by creating a “connected consumer” department within the company, run by Bennett. Next is, “grab it,” by establishing data products, like its predictive algorithms for product recommendations or internal ChatGPT called MaIA.
The next step, “hack it,” includes using data and AI to help the company reformulate products, identify fluctuating demand to improve manufacturing, supply chain, transportation, and create more personalized marketing content.
“Taking a proof of concept, piloting it, and then running with it fast and hard,” is the focus of the next step, “own it,” Bennett said. This year, Benefit piloted a conversational commerce experience for consumers in WhatsApp using GenAI trained in Benefit’s brand voice to provide personalized shopping support. It resulted in 6,000 conversations over 10 weeks, Bennett said.
“Adoption is really difficult, and that’s our biggest barrier,” she said. “So this really unlocked the barriers to that.”
The final step is “shine with it,” making data insights, now included in part of the training curriculum for executive leadership trainings, core to all roles, De Moyer said. Bennett said the company is ultimately “democratizing data as far and as deep as we can,” by giving “everybody objectives throughout the business.