– Image via http://www.timoelliott.com

I am currently taking a course on Predictive Analytics and Data Mining in my MBA program that has opened my eyes to a WORLD of new business knowledge. I ran across a post from Timo Elliott on how L’Oréal is turning data into a customer experience and just wanted to share my thoughts, as a consumer and seller of beauty.

Abstract: L’Oreal wants to give consumers the ultimate customer expereince and plans to do so with data analytics (store trends, sales trends, buying habits, etc.), social media, the cloud, and most importantly, smart phones. Georges-Edouard Dias, SVP of Digital Business at L’Oreal, describes this digital journey as “rethinking the way we communicate: a change, transformation of advertising, rethinking the way we sell to people” and wants to branch out from the notion that digital pertains only to e-commerce, into utilizing it in retail and create new forms of business never thought about before.

My thoughts: L’Oreal has always been a leader in consumer brands within the beauty industry. The company stays on top because they are trailblazers in innovation. Before, with the lack of technology, predicting buyer habits were not as precise but now with data companies like SAP, L’Oreal, can bring customers a way to help their decision making much easier.

The company is hoping that with all the data already being collected, they can create “marketing in the now versus” marketing in advance. The traditional method of marketing a beauty product is to advertise to consumers ahead of time so they, in turn, head to the store to buy the product. Once the consumer gets to the store, there is a possibility that other products on the shelf are enticing enough to want to purchase (which is also why product placement has always been so important in stores). The difference between the traditional approach and the “in the now” approach, is the ability to really convince customers to “add on” products while at the store. L’Oreal hopes to do this via smart phones, potentially reaching one billion new customers.

Personally, I think this is a fairly low hanging fruit for L’Oreal, given the loads of data that is available to them. Women are already doing the research on their own through social media and beauty blogs, but L’Oreal has the resources to create a well-planned system to make it easier for consumers to find this data and choose L’Oreal products over its competitors.

Here is how I see this “new customer experience” coming into fruition: If a customer is at CVS looking for a lip color that was seen on Beyoncé at this year’s Grammy Awards, he or she can easily pull up the L’Oreal Knows: Because You’re Worth It ** app on their smartphone and search “Beyoncé 2014 Grammys lip color,” which will direct them to some beauty blog that has that information. Once there, the customer sees that Beyoncé was wearing a non-L’Oreal brand product, and the app can then show you similar products that are apart of the L’Oreal portfolio. In addition, the app can give the option to go into more detail and narrow the results: “Please select where you are shopping: Drugstore, Prestige Beauty Store, Department Store, or Online.” This specific customer would select “Drugstore” since they are currently at CVS, which will bring up a selection of L’Oreal and Maybelline lip color choices.

This can eliminate other drugstore competitors such as Revlon and Almay, mainly because the app has done the work of finding the color for you. Now L’Oreal as an additional marketing space on the selected product page to recommend “Products to compliment this color” and include cheek colors and maybe even skincare.

And just like most consumers do online, this person who is currently at the drugstore, standing in front of the L’Oreal section of the isle, will click on those complimenting products to get more info. That alone gives L’Oreal a 50/50 chance of a customer adding another product to their basket, all because the company has figured out a way to compile tons of data into your smart phone.

With all the blogs and social media available to give recommendations for beauty products, and all the information L’Oreal already has, I think this new customer experience will be a great marketing asset to the company and all its brands.

** Disclaimer: this is not a real app, just a name I created for the sake of the scenario.