Our DIGITAL intelligence at L'OREAL's service_Connected Life 2014

What is CONNECTED LIFE and its added value for L’OREAL?© TNS

Digital intelligence at your service- introducing Connected Life 2014 -

Media fragmentation is often described as the biggest brand challenge of the digital age. In reality, it’s the greatest opportunity.

Digital intelligence at TNS- Connected Life outlined -

Including:

1. Geographic scope

2. Purpose & added value

3. Key questions answered

4. Digital consumer segmentation


Connected Life 2014 explores how technology is transforming the lives of consumers across the planet

Covering regular internet users in 50 markets around the world, the Connected Life study offers essential insight into the impact of the growing digital ecosystem on the media landscape.

It uncovers new and exciting opportunities for marketers to connect with their consumers in this increasingly complex environment.

WHERE

A en voir l'intense activité autour des blogsbeauté, des tutoriaux maquillage, des aviset échanges sur les réseaux sociaux autourde la Beauté, envie des femmes de se sentirbelle ne se dément pas.

Mathilde Lion, NPD Beauty Industry Expert

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Connect with your consumers on a whole new level

As consumers move across multiplechannels and adopt more advanceddevices, targeting becomes a morecomplex task.

Indeed, a fragmented landscape demandsa shift in focus - the question is no longer‘how can I reach my consumer?’ but ‘howcan I reach my consumer at a time whenmy brand is most relevant to them?’.

Understanding local preferences andtouch-point patterns allows to targetindividuals and groups far more precisely,and to deliver against long- and short-term marketing objectives with greateraccuracy.

Connected Life is about betterdecision making in a connected world.

WHY

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Each Connected Life report is structured around key questions facing today’s marketers

How has the digital ecosystem developed? How should brand strategies adapt?

Role of digital in drivingBrand activation

� To what extent is onlineresearch and purchase prevalent across categories?

� What are the barriers and drivers of eCommerce?

� What’s the share of voice for digital and social channels throughout the P2P?

� How do these paths change across segments?

Role of digital in increasing Brand awareness

� What do consumers use these devices for? What content or services do they access, why?

� What is the incremental reach of different digital channels?

� What are the key market trends? Where are markets going and how quickly are they changing?

� How does this compare across segments?

Role of digital in the overall Media Landscape

Research Questions

� What does the device infrastructure look like either locally or globally?

� What is the interaction between devices and media?

� What does a day in the life of a digital consumer look like across the world?

� What are the different types of digital segment that exist across markets?

Role of digital in Brand building

� How do digital consumer behaviours, attitudes, needs and motivations change across categories?

� What channels or routes of engagement are used?

� What content needs exist across categories?

� How does this compare across targets, categories and markets?

1.How has the growing digital ecosystem impacted media habits?

2.What is the reach of digital platforms and channels?

3.How and why do consumers engage with brands?

4.How digital is the Path to Purchase?

HOW

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In addition, the study guides marketers with a segmentationdeveloped along two strategic axes

Lo

w

Hig

h

Dig

ital in

fluence

Low High

Social engagement

LeadersObservers

Functionals Connectors

To what extent should I focus ondigital, rather than other channels?

The answer to this question is based onthe level of influence digital channelshold, which grows with improvingaccess. The more devices or bandwidtha consumer has, the more time theywill spend online and the moreinfluential the medium becomes.

Where should this focus be? Onsocial and earned media or ownedand paid?

The answer to this questions is lessclear cut as it is more closely linked toattitudes than access, but whereverconsumers have a stronger attachmentto social channels they will play a moreimportant role.

WHAT

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Digital innovation at L’OREAL- Internet sourced -

Including:

1. Creativity, content & connectivity

2. Digital media

3. Ecommerce


Creativity, content & consumer connectivity at

Countless Google searches

regard Beauty. Beauty, with its

tendency to foster dialogue and

connection, suggests a high degree

of affinity between what the L’Oréal

Group does and what the digital has

to offer.

The Group also uses online as

the most reliable touch-point to

reach the highly dynamic and

increasingly more affluent middle

class in emerging markets.

To begin with, Internet is a

great tool for delivering

personalised services (such as –

for example - the "L’Oréal Paris

Make-up" app which was launched

in 2011 and which transforms a

tablet into a professional make-up

studio).

Moreover, social networks allow

L’Oréal brands to leverage the

viral power of loyal (brand and/or

product) advocates’, bloggers’,

vloggers’ and star ambassadors’

recommendation and

word-of-mouth.

L’Oréal, the world's largest

cosmetics company, is thus always

on the lookout for new opportunities

to create proximity with

consumers in a yet more

creative, relevant and efficient

way.

01 02

04 0305

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Digital media at

For example, L’Oreal looks into

virtual reality as one of the

biggest digital trends. The mobile

app "Makeup Genius", already

launched in France, the U.S. and

China, help evaluate a new make-

up offer without having to apply a

single cosmetic product.

L’Oréal spends 13% of its net

media investment on digital

media. Its online share of voice is

set to increase from 20 to over 200

websites.

Makeup Genius is the

California-based Connected

Beauty Incubator’s first

product. The breakthrough app

was released only 18 months after

L’Oréal had initiated the incubator.

Consequently, all flagship

websites (e.g. YSL Beauty,

Clarisonic and em - a pure player

brand designed with the YouTube

star vlogger, Michelle Phan) are to

use the common DemandWare

framework that enables brand

fans to create their own

personalised estores.

It is the "Digital Factory", a

50-person large internal expert

team, that is in charge of driving

the digital revolution at L’Oréal and

placing the consumer at the

heart of the online site creation.

06 07

09 0810

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Ecommerce at

L’Oréal’s efforts to boost online

purchase rates pay back already:

the Group’s ecommerce results

are up by 25% (owned estores

only).

Yet, ecommerce performance is

far from geographically

homogenous: many markets

have their own local patterns in

terms of Internet penetration,

device ownership, security, payment

methods and logistics.

To benefit from local expertise,

Best Practice cases are being

identified worldwide: Japan for

mcommerce (at 30% of the

country’s online sales), China for

Net Promoter Score and the U.S.

for conversion funnel (soon retooled

with Shoppable?).

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After the digital media and the

ecommerce sites, connected

objects are under consideration

at L’Oréal (possibly all the more so

since the recent snatching of the

Kering’s Puma licence from the

American competitor, P&G?).

Meanwhile, at the Ecommerce

One to One event in Monaco,

Vincent Stuhlen, International

Digital Director for L’Oréal Luxe,

presented the roadmap towards

digitalisation of the brand

portfolio, aimed at achieving -

by 2017 - 8% of sales via the

ecommerce (5% currently).

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L’OREAL’s challenge- based on publically available data -

Including:

1. Globalisation

2. Customisation


Challenge: To move L’Oréal from product company towards product+service company*

� The Group’s digital revolution breaks out internally

with the major focus on operational

excellence to be attained via cutting-edge

technology (common platform) and employee

support («Digital that works» training module for

500 marketing and sales staff).

� At the heart of the revolution lies the need to

explore digital horizons in an effort to build ever

tighter ties with (existing and potential

future) consumers.

� To fully benefit from the existing in-house

expertise, local best practices should be

investigated closely in order to understand their

roll-out feasibility.

Operational excellence leading to consumer centric digitalisation

* Lubomira Rochet , L’Oréal Chief Digital Officer

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Quiz: Based on findings below, would you propose the same media mix for South Korea and Nigeria?

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Exploring today’s local patterns…- non-exhaustive illustration -

Including:

1. Japan

2. China

3. The U.S.


Breadth of findings (as delivered by all Connected Life reports)

Patterns in media consumption & device choice

■ xx% of the total market in Japan uses Internet at least once a week

■ xx is the main access point to online for all age groups although younger consumers are spending more time on xx

■ Mobile-centric internet users tend to be…

■ Japan’s xx consumption remains high. There are, however, xx% of consumers who are shifting their…

■ Online xx and xx sites have the widest reach in Japan – weekly usage is at xx% and xx% respectively for these activities

■ Japanese internet users prefer to use xx to communicate online (xx%), ignoring the global trend towards xx

■ xx dominates as the top social platform in Japan followed by xx, xx and xx

■ Consumers are online throughout the day, but usage drops off during xx, when xx dominates

Online content & channel preference

Attitudes towards ecommerce & connected objects

■ Japanese consumers have a high incidence of purchasing online (across segments)

■ xx will drive eCommerce sales across categories

■ To recruit, ensure xx and xx and offer xx

■ Compared to other markets, there is not a big opportunity to introduce xx

■ In the Personal Care category, consumers engage with brands they 'like', enabling those with strong equity to deepen this bond by engaging brand fans online

■ Personal Care has a xx level of research and any research conducted is xx

■ xx and xx play an important role

Path to Purchase in the Personal Care category


Example_1: Optimise your media plan

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Example_2: Prioritise the right digital channels


Example_3: Increase media spent ROI

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Example_4: Tailor brand content to each touch-point


Example_5: Seize your target (and who they are!)

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… for globally connected future

Including:

1. Example of cross-market data

2. Case study


Example of how Connected Life data can support real-life decision making and drive digital initiatives

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Case study: L’Oreal Ombre

Case of leveraging multi-platform incrementalism and mobile centrism to boost brand/product relevance in the eyes of the target

Source: Mobile Marketer 2014 – L’Oreal personalises mobile ads by hair colour to drive relevancy (Link)

Business issue

� Users access more content across multiple devices, but online clutter and differing screen sizes create a challenge for marketers

Action

� Beauty brand L’Oreal incorporated GumGum’s photo recognition technology to pick up on the hair colors of models or actors in content users were viewing. Hair colour was then reflected in ads for their Ombre colour line

� An in-ad slider tool was incorporated so users could easily view multiple, personalised options

� The campaign was delivered seamlessly with the same user experience across PC or mobile platforms

Result

� By linking content users were interested in to a distinct style and colour, L’Oreal created a more personalised ad, in sync with user preferences

The approach

� L’Oreal utilised photo recognition technology to drive greater engagement with online advertising, regardless of how content was accessed

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Thank you

TNS Sofres | 138, Avenue Marx Dormoy, 92129, Montrouge Cedex | +33 (0)1 40 92 66 66 | Fax | www.tns-sofres.com | www.tnsglobal.com

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Contact our TNS Team to set up a digital meeting and learn more!

Cecile Hayat - Consumer Department Director, B&C Digital Lead

[email protected]

0140926651

Jacques Latreille – Global Account Director, L’Oréal

[email protected]

0140923318

Guénaëlle

Guenaelle Gault – International Digital Director, Southern Europe

[email protected]

0140924527

Constance Leroy – Head of Consumer Department, Brand&Communication

[email protected]

0140924627

Karolina Gniewowska – Research Director, Consumer Digital Lead

[email protected]

0140924707

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Bibliography

La révolution digitale chez l’Oréal (24/04/2014) http://magazine.loreal-finance.com/fr/la-revolution-digitale-chez-loreal.htm

L’Oréal prépare des objets connectés pour le parcours beauté (26 mars 2014) http://www.larevuedudigital.com/2014/03/actu/loreal-prepare-des-objets-connectes-pour-le-parcours-beaute/?relatedposts_hit=1&relatedposts_origin=5431&relatedposts_position=1

L’Oréal planche sur la convergence technologique de ses plateformes digitales (28 juin 2014) http://www.larevuedudigital.com/2014/06/digital/loreal-travaille-a-la-convergence-technologique-de-ses-marques-a-lheure-du-digital/

Pré-visualiser son maquillage en réalité virtuelle, avec la nouvelle App l’Oréal (16 mai 2014) http://www.larevuedudigital.com/2014/05/directionmarketing/pre-visualiser-son-maquillage-en-realite-virtuelle-avec-la-nouvelle-app-loreal/

"Le défi de notre incubateur, c'est d'insuffler l'esprit start-up à l'énorme organisation L'Oréal", selon Guive Balooch (02 juin 2014) http://www.usine-digitale.fr/article/le-defi-de-notre-incubateur-c-est-d-insuffler-l-esprit-start-up-a-l-enorme-organisation-l-oreal-selon-guive-balooch.N266210

Jean-Paul AGON, Chairman and CEO (September 18th 2014) http://www.loreal-finance.com/_docs/pdf/autres-evenements_PAI/2014/Cheuvreux.pdf

[E-Commerce One to One] L'Oréal révolutionné par le digital (19/03/2014) http://www.ecommercemag.fr/Thematique/strategies-omni-canal-1009/strategies-10040/Breves/Oreal-revolutionne-digital-234758.htm

Conférence L’Oréal " Flagship Digital : the ultimate customer experience » (19 mar 2014) http://blogecommerce1to1.com/2014/03/conference-loreal-flagship-digital-the-ultimate-customer-experience/

YSL Beauté dévoile les coulisses de son nouveau site (24 MARS 2014) http://michellephan.com/em-cosmetics-goes-international/

L'Oreal Retools Online Shopping Cart Thanks to Digital Mentorship Effort (September 16, 2014) http://adage.com/article/cmo-strategy/l-oreal-retooled-online-shopping-cart/294955/

L'Oreal goes back to the future with content marketing agenda (10 February, 2014) http://www.cmo.com.au/article/537719/l_oreal_goes_back_future_content_marketing_agenda/

Personalization is key for beauty omnichannel strategy: L’Oreal Luxe exec (January 17, 2014) http://www.luxurydaily.com/personalization-is-key-for-beauty-omnichannel-strategy-loreal-luxe-exec/

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Documents

Our DIGITAL intelligence at L'OREAL's service_Connected Life 2014