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TRANSCRIPT
CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL
BEAUTY
Comment Teaming up Inside 2 Retail insights
3 Tech bytes Netwatch 4 Trending Companies to watch
5 Data Around the world
6 Interview L’Oréal global vice president, human resources – talent acquisition Eva Azoulay
7 Zoom in on Amazon
8 In case you missed it
INSIGHT
There has been a clear trend for retailers and brands to work closer together, especially to co-create products. This has started to become common among
online retailers in particular, as brands can tap into a wealth of data to come up with a product that consumers are looking for, and that can then be marketed and sold to these retailers’ large databases. China’s Alibaba, for example, has partnered with a string of companies, including L’Oréal and Shiseido, to co-develop products. In the offline world, Shiseido also recently announced that it had inked a deal with Hong-Kong-based retailer AS Watson to jointly develop products for consumers in Asia. As competition heats up, the market is also likely to see more retailers partner
with other retailers. German retail group Douglas said that it is working on turning its website into an online marketplace, which would see it team up with other retailers, as well as brands outside beauty. Similarly, discounter Aldi and department store Kohl’s recently piloted a concept where their two stores are adjoined in a bid to increase sales and footfall. Retailers teaming up is not exactly new—shop-in-shops have been around for some time. However, they may need to take the idea a little further and join forces to offer additional services, a more differentiated assortment and pool resources in the process, to be able to complete with online giants such as Amazon.
#190
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The leading publication on the international beauty industry
Oonagh PhillipsEditor in [email protected]
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INSIGHTINSIGHT
Comment Retail insights Tech bytes & Netwatch
Trending & Companies to watch
Interview Zoom in on In case you missed it
Data & Around the world
Retail insights• A new Augmented Reality (AR) e-commerce concept allows retailers to generate 3D models of products from existing images, then incorporate them into online stores. Called ARsenal, the tool from tech company CGTrader lets customers experience products in immersive and interactive ways before purchasing them online, much as they would in brick-and-mortar stores. The company claims it offers e-commerce players more affordable ways to implement AR features online.
• Amazon UK has launched a pop-up store concept called Clicks and Mortar, designed to help small brands grow offline and online and highlight the benefits of a combined retail model. After opening a pilot shop in Manchester, Amazon will roll out nine additional shops across the UK. The pop-ups feature products from over 100 niche brands.
• Watchmaker Swatch will open a drive-thru in Biel, Switzerland, in a bid to add novelty to the retail experience. Modeled on fast-food chains, the drive-thru lets customers order Swatch products through an intercom system, then pick them up from a nearby window, packed in burger boxes and brown paper bags. Could beauty drive-thrus be next?
• To combat sluggish footfall, compete with e-commerce and inspire return visits, brick-and-mortar retailers are offering loyalty programs with more perks. Swedish chain H&M launched a loyalty scheme that rewards customers with points for in-store purchases that can be swapped for cash rewards. Members also get discounts on select apparel, free shipping for orders worth $40 or more and entry to exclusive events.
Comment Retail insights Tech bytes & Netwatch
Trending & Companies to watch
Interview Zoom in on In case you missed it
Data & Around the world
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San Francisco-based Tribe Dynamics shares exclusive data about beauty trends and brands making waves on social media
Sun Stalk’r launch, London party power growth for Fenty BeautyFenty Beauty led the Top 10 beauty brands in Earned Media Value (EMV) growth in April in France, with its $2.3m EMV total for the month marking a 36% increase from March. The brand enjoyed enthusiasm around the new Sun Stalk’r Instant Warmth Bronzer, which powered $304.8k EMV from 16 content creators as Fenty Beauty’s top-
earning product. The brand invited beauty blogger Maroua Bekkouche (@thedollbeauty on Instagram) and international influencers to London for a party with Rihanna. Maroua powered $382.4k EMV across five posts as the brand’s No. 1 ambassador.
Tribe Dynamics is a San Francisco-based software company that helps beauty, fashion and lifestyle brands drive and measure digital earned media at scale. For more stories and rankings of top brands and products in international beauty, check out Tribe Dynamics’ April Tribe Top 10 report for France here.
Tech bytes
• Could Augmented Reality (AR) beauty experiences be taken to the next level by virtual haptics—technology that allows users to simulate real actions using hand gestures? US tech company UltraHaptics is acquiring Leap Motion, which has released hand-tracking systems for VR and AR headsets. UltraHaptics, meanwhile, uses ultrasounds to create mid-air, simulated shapes and textures that users can interact with using touch. Combining the two technologies could lead to new AR applications.
• Refund app Returnly is looking to make product returns more sustainable. The company has launched Green Returns, which allows brands to offer a service whereby the customer is refunded without having to send the product back. Returnly says this is well suited to beauty retailers, which are often required to dispose of used and unopened products that pose a potential health risk, adding to the five billion pounds of waste that retail returns create each year. The app makes real-time decisions using shopping behavior data to determine the type of return. Allowing consumers to keep rather than return the product is said to result in satisfied customers and boost loyalty.
• Chinese tech company Meitu launched an AI-powered beauty device called MeituKey Skin Analyzer. The tool uses different light modes to evaluate skin conditions including acne, follicle issues and dark eye circles, then offers personalized recommendations. Used with the MeituSkin app, it can compare the skin prior to and after applying a skincare routine, rate products’ effectiveness and remind users to apply sunscreen or remove make-up.
Netwatch
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Comment Retail insights Tech bytes & Netwatch
Trending & Companies to watch
Interview Zoom in on In case you missed it
Data & Around the world
Trending
Companies to watch
Beauty Bakerie. This viral US-based cosmetics brand is a sweets-themed make-up line founded by entrepreneur and breast-cancer survivor Cashmere Nicole in 2011. After gaining over 950,000 Instagram followers, achieving wide distribution at Ulta and an endorsement from singer Beyoncé, the brand recently launched in the UK at Cult Beauty.
Graffiti Collective. This street-art inspired skincare brand urges customers to be “fearless with [their] face care”, selling a line of brightly pigmented purifying masks made with raw and vegan ingredients. Launched by beauty industry veteran Sheila Patel, the brand stresses a playful approach, encouraging users to apply masks like face paint. It also supports artists and their projects.
CTZN Cosmetics. This brand claims to have upped the ante on the nude make-up trend with a 25-shade lipstick line. Founded by three sisters with Pakistani origins, the UK-based brand also sells sheer facial balms meant to create a natural, dewy look. CTZN stresses both ethnic diversity and gender inclusivity, marketing products as unisex. The website features a simple shade-matching tool.
#Nobuy is trending on social media, with influencers posting tips on using up existing beauty products, reducing budgets or
even embarking on a ‘skin fast’—discontinuing all products for a time.
Environmental concerns and the decluttering movement championed
by professional organizer Marie Kondo are driving the trend.
Pineapple-based skincare is gaining traction in both natural
and prestige categories. Fueled by enthusiasm for vitamin C-based
formulas and exfoliating fruit enzymes, pineapple is a key ingredient
in products such as Marc Jacobs’ forthcoming Youthquake line and a
face scrub from Kiehl’s.
Skincare based on ‘plant water’ is being marketed as being as purer
and healthier than water-based formulations. Brands such as Poland-based d’Alchémy and US company Sans Skincare use plant hydrosols in serums, moisturizers and masks. The claim is that this renders active
ingredients more effective.
Ice-cube serums are hot. Said to firm, brighten and refresh the skin, frozen serums are touted by some as next-level skincare. In addition to products such as Anne Semonin’s Express
Radiance Ice Cubes, DIY serums concocted with dissolved aspirin or green tea are popular in the
beauty blogosphere.
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Comment Retail insights Tech bytes & Netwatch
Trending & Companies to watch
Interview Zoom in on In case you missed it
Data & Around the world
Comment Retail insights Tech bytes & Netwatch
Trending & Companies to watch
Data & Around the world
Interview Zoom in on In case you missed it
Data
French beauty• French companies collectively have a 23% share of the global beauty market, making France the leading country worldwide in terms of representation in the sector, according to a report from Asterès commissioned by French association Febea.
• French beauty companies, across the cosmetics sector, generated sales of €45bn in 2017. For 2017, manufacturers generated €24bn, raw materials producers netted €2.9bn and selective distribution generated €5bn. Exports added an additional €14bn.
• French cosmetics firms saw their exports grow 5% per year between 2010 and 2018. Exports make up around 60% of annual revenues for French companies.
• Tourists consume €3bn in French beauty products every year, accounting for 20% of domestic beauty sales. The report claims that the “France” brand raises the market value of a product by around 30%.
US prestige fragrance
• US prestige fragrance sales were up 5% year-to-date in the first quarter of 2019, according to The NPD Group. The increase was partly driven by growth in men’s fragrance sales (+6%). Women’s fragrance sales rose by 4%.
• The men’s fragrance category is typically given a boost around Father’s Day (June 16) in the US, with higher concentrations and artisanal brands forecast to drive growth.
• In the two weeks leading up to Father’s Day in 2018, men’s fragrance sales were up 10%, representing a gain of nearly $8m. Sales of more concentrated juices grew by $6.6m during the period, and drove 85% of the category’s growth.
• In June 2018, the niche artisanal category increased 13%. With sales up 25% year-to-date, it continues to be the fastest-growing segment within men’s fragrance.
Around the world
• In retaliation to US tariffs, China implemented tariffs from June 1 on 5,410 American products, representing annual imports of $60bn. Some 2,493 products, including perfume and cosmetics, will be subject to 25% tariffs.
• Japan has adopted policies to cut plastic waste, and will lobby for an international agreement at June’s G20 summit in Osaka to reduce the amount of plastic entering the ocean to zero by 2050. About eight million of the 300 million tons of plastic waste produced each year end up in the ocean, according to the UN Environment Program.
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How is digital impacting recruitment at L’Oréal? First of all, [it is impacting] the profile that we are looking for. Our ambition is to quite quickly become the number-one beauty tech company, so we are targeting much more digital profiles. We need our recruiters to be more data-savvy, tech savvy and more data driven, so they need to upskill themselves to target the right profiles. We give our candidates the CM1 test, co-created by General Assembly and L’Oréal. I ask all my recruiters to do this test themselves, because they need to understand what we are asking from our candidates. This is an example of a consequence of digitalization on our business today. Also, we need recruiters who are much more comfortable with all that is related to employer branding, because the more you save time on administrative tasks in the recruitment process, the more you can reallocate this time to selling the jobs, launching attractiveness campaigns and talking to candidates. Second, it’s in terms of tools that we use in recruitment. The best example is Artificial Intelligence (AI). We have launched two AI tools at L’Oréal: Mya, a chatbot, and Seedlink, which is more of an algorithm that enables us to predict the recruitment fit with the candidate.
What advantages do such tools offer compared with traditional methods?These tools enable us to save time in the recruitment process, provide a better candidate experience and diversify the profiles we recruit. We receive more than one million applications per year—we have more than 250,000 internship applications per year—and we don’t have 30,000 recruiters at L’Oréal, so at some point, they need help to ensure they do not always focus on the same type of profile. These tools can select many things beyond the CV. Students right now don’t want to get put in a box. There are more hybrid profiles, so we have to help, with these technologies, to make sure we are more open. With these tools, we have been able to recruit tech guys to do marketing, to do sales, to do finance, and even finance profiles to do marketing.
Why do you currently only use AI to recruit interns and BAs?This is where we have the highest volume of candidates. AI by definition works when you have a lot of data. You need to have volume to ensure the machine is working correctly.
What are the limitations of using AI in recruitment?It can be dangerous if you are using the wrong tools. Today there are plenty of AI tools for recruitment, so you have to make sure you choose the tool that corresponds to your HR policy. Some companies are working with AI tools where the machine selects the candidate. This is not our approach; we always want to have a human decision. Mya will give the recruiter the list of candidates who correspond to the pre-requisites for the job, but will not automatically select the candidate. [No candidate is] eliminated by the machine. I don’t think those tools today are mature enough to give them the full responsibility of selection. Our purpose is to have augmented recruitment, making sure that these tools are helping our recruiters to be more efficient at what they do. n
”L’Oréal global vice president, human resources – talent acquisition Eva Azoulay
Some companies are working with AI tools where it is the machine selecting the candidate. This is not our approach; we always want to have a human decision
“
Interview L’Oréal global vice president, human resources – talent acquisition Eva Azoulay
L’Oréal global vice president, human resources – talent acquisition Eva Azoulay explains how digital is impacting recruitment at the world’s biggest beauty company, which takes on 14,000 new employees each year
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Comment Retail insights Tech bytes & Netwatch
Trending & Companies to watch
Interview Zoom in on In case you missed it
Data & Around the world
Zoom in on: Amazon
Virtual try-on. Product testing is still seen as one of the key barriers to online sales of cosmetics. Amazon has sought to overcome this through a partnership with L’Oréal, whereby the French group makes its virtual try-on tool for lipsticks developed by ModiFace (the AI and AR company L’Oréal acquired last year) to Amazon consumers.
Product matching. To better respond to consumer wants, Amazon last week unveiled StyleSnap, a feature on its app that allows consumers to upload a picture of a look or style they like and get recommendations for similar items. The feature is currently for fashion, but it would not be too much of a stretch of the imagination for it to be applied to beauty.
Brick & mortar. Analysts have said Amazon will have a tough time dominating beauty until it can capture a share of the brick-and-mortar business. The company has made several moves in this area. Just last week it announced the launch of a pop-up store concept called Clicks and Mortar, designed to help small brands gain exposure in brick-and-mortar retail. Amazon plans to roll out 10 pop-up stores, which stock items including beauty, across the UK. It was also revealed earlier this year that Amazon was looking to open grocery stores in US cities, and that beauty would be a product category. Other endeavors include the 4-star store where everything on sale is rated 4 stars and above, is a top seller, or is new and trending on Amazon.com. But Amazon’s biggest move into physical retail was its $13.4bn acquisition of Whole Foods in 2017. Perhaps its biggest move into beauty will be the purchase of a brick-and-mortar cosmetics retailer.
Own brands. Amazon unveiled its private-label skincare brand Belei in March. Amazon no doubt benefited from its consumer data about what works and what doesn’t from skincare brands sold on the site to create the line. Amazon also launched the find. make-up line at the beginning of the year.
Sampling. Earlier this year Amazon began using its customer data for sampling. The company sends samples of new products to customers who its machine learning tools select as being likely to buy them. The move essentially sees brands pay Amazon to use its large pool of consumers in a highly targeted way. Amazon’s ability to get product into the hands of consumers may also enable it to get brands on board that it doesn’t already work with, especially in luxury.
Excitement. Amazon partnered with fashion trendsetters to release influencer-designed collections for only 30 hours at a time. Called The Drop, the concept is inspired by an urban streetwear trend of making limited-edition items available in small quantities at select retailers. Items will be made on demand to avoid waste. Could beauty be next?
Convenience. Last week Amazon unveiled a drone that can deliver packages to customers in less than 30 minutes. The service could launch in a matter of months. n
BW Confidential highlights Amazon’s recent initiatives that could see it deepen its presence in beauty
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Comment Retail insights Tech bytes & Netwatch
Trending & Companies to watch
Interview Zoom in on In case you missed it
Data & Around the world
CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL
In case you missed it
Dufry acquires RegStaer Vnukovo
Interparfums inks fragrance license with Kate Spade New York
Italy’s Nichebox acquires Clive Christian
Amazon offers virtual make-up try-ons with L’Oréal’s ModiFace
QVC and HSN launch Clean Beauty Seal
Ulta Beauty unveils international ambitions, to launch in Canada
Shiseido and AS Watson to co-develop products for Asia
L’Oréal launches its first internal tech incubator
Marionnaud looks to boost skincare with Active Beauty concept
Gucci to launch first “universal” scent
Lolita Lempicka launches men’s scent Green Lover
Ning Chang named first Asia ambassador for Elizabeth Arden skincare
Cosmetic Victories prizes awarded at Paris ceremony
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The leading publication on the international beauty industry
www.bwconfidential.com N°38 May-June 2019
InterviewL’Oréal chief digital officerLubomira Rochet
Market watch: ChinaTmall and beyond,KOLs & pricing
Travel retail: South KoreaData, daigou &operator strategies
PackagingThe latest trends inturnkey solutions
Insight: SkincareClean beauty, personalization & social media
The leading publication on the international beauty industry
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