ECONOMY

Alex Davison: Our role in the new era of the industry is critical

alex-davison-our-role-in-the-new-era-of-the-industry-is-critical

L’OREAL HELLAS

The pandemic’s immediate business impact on Beauty was severe given the closure of all hair salons, department stores and boutiques. Supermarkets and Pharmacies stayed open yet faced operational challenges from the necessary social distancing and from the demand surge for ‘lockdown supplies’ and hygiene products. On top, while Beauty products are available on-line, websites often struggled to meet the increase in consumer demand.

L’Oreal’s immediate focus was how we could help. First, how could we help all our employees to stay safe? To stay physically safe, we immediately started teleworking and introduced protective measures for our sales and distribution centre teams who were still in the field servicing Supermarkets and Pharmacies. However, we also took action to support the mental welfare of all employees and keep us all connected whilst being physically apart. Second, how do we support our retail partners, especially the hair salons and small suppliers who were most vulnerable? To help we put in place a package of financial and support measures as well as helping nearly 70% of Salons use the shutdown as an opportunity to learn through educational. Third, how can we help more broadly in society? It was for this reason that L’Oreal did not take any Government funding even though hundreds of our employees could not work. We also made significant donations of hydrocolic gels to doctors, hospitals and pharmacies – the people on the front line against the pandemic.

We are now post lock down, and business activity has mostly restarted well. Hair Salons are back strongly thanks to comprehensive safety measures, high consumer demand and a renewed love affair with our hair stylists whom we all hugely missed! Department stores and boutiques are also coming back and we are helping our all-important in-store Beauty Advisors overcome the removal of product testers with new tools such as virtual try-ons for make-up and hair coloring and new digital skin diagnostic tools that make personalized, algorithm-based, recommendations. For the rest of the year we are optimistic as Beauty is quite resilient in times of crisis. However, given the forecasted economic shock, consumers will be looking for new value in Beauty. This will not necessarily mean low prices, but it will mean products that deliver, products that have multiple benefits or mileage benefits, and products from brands that are trusted.

Beyond this year’s performance, Covid has massively accelerated existing trends that will transform Beauty and, as industry leader, L’Oreal will take a leading role in this transformation. Firstly, from now E-commerce will be a critical engine of the growth for many national retailers. Lockdown triggered a huge first-time trial of E-commerce and it will continue to explode with 42% of consumers now claiming to want to shop Beauty on-line post Covid. There is an urgent race to dramatically improve the online shopping experience from where we are today, whilst continuing to upgrade the off-line. Secondly, this pandemic has reset consumers expectations that companies should be a force for good when it comes to environmental, social and governance matters. L’Oreal has long been active in this area but there is much more to be done, as we have just announced with our new 2030 ‘L’Oreal of the Future’ commitments. If we all act to improve, then indeed there will be a silver-lining from the tragedy of this pandemic. 

THE COMPANY AT A GLANCE

For more than 100 years, L’Oréal has been dedicated to beauty. Being the leading beauty company in the world and with its unique international portfolio of 34 different and complementary brands, recorded sales in 2019 amounting to 29.87 billion euros, while employing 82,600 people worldwide.