Why Has the Beauty Industry Remained So Resilient?


The MD of L’Oréal Australia shares his insights.

I started out my career in Portugal. L’Oréal is an extremely well-known company there, and it’s probably one of the top five companies you choose out of university. [When I came to Australia] I wasn’t expecting how much of the market’s taken up by the face – 50 per cent. More than 60 per cent of that is foundation. Those are numbers which are really not equal in other countries.

I started as a product manager for hair colour. It’s something that most men don’t do. I tried to use balayage in my hair when the product was launched, but my hair was too dark, so it just became orange. It stayed that way for three months. That was 20 years ago, when people weren’t as open-minded as today. But it was fantastic to train in hair colour and understand the technology behind it.

The beauty industry is resilient. You have to be in a crisis market in order to see that. I’ve been in countries [that have faced multiple recessions]. You ask, ‘Why is beauty still growing when all of the other markets are down?’ If you’re going through a crisis, if you’re fighting for a job, it’s more important than ever that your self-esteem is strong. It’s the last thing you want to lose. You understand that beauty is still important.

The selfie had a direct impact on beauty and make-up. More than ever, you want to do your make-up because you want to take a picture. L’Oréal Paris’s Makeup Genius app [a virtual reality make-up test] is a clear link between beauty, technology and how you perceive yourself. You have an app where you can change whatever colours you want, immediately – on your lips, on your eyes – and share it with the world. It allows you to go from a product to a look to an experience.

Some of our products are developed by consumers and influencers. We give new products to consumers, they try them and, if they like it and understand it, we launch them. It’s a very different model to some of the brands [in the L’Oréal Group], which use internal technology development, consumer studies and research. We have brands moving in different directions: some more traditional, some more social.

The L’Oréal group has a beauty incubator in New Jersey in the U.S. The guy leading it came to Australia and explained their trends and development. Augmented reality will be coming. We also have an app from Lancôme, which allows you to personalise your skin cream to your skin. This will be the future – personalisation.

We go beyond cosmetics into health. We’ve developed an app, called My UV Patch, which allows you to measure exposure to sun on your skin. I’ve sent my kids to school with the app and a patch on the back of their hand. The app reads the sun, the time of day, and tells you exactly when to reapply sunscreen. It’s an initiative we should be developing with schools and the government.

Be one team! This was one of the values we wanted to create in our culture after I joined L’Oréal Australia. Like most multinationals, we have a lot of business units and departments. Today, they need to work in a collaborative way and have a flatter structure. Ever since, we’ve made a lot of effort to create workshops and groups across all units.

I believe we have to take more risks. As I tell our teams, we have to run towards the edge! We have 900 employees in Australia now. If you add beauty advisors, it would be another 600. As a big organisation, we have a lot of commitments. How can you manage, at the same time, to take risks and push people out of their comfort zones?

You need to find ways to have fun in your organisation. I didn’t find this as easy in Australia versus other countries. In Latin countries, it’s a bit more loose in terms of time. You might work for longer, but you have a lot of moments of distraction along the way. In Australia, you tend to work shorter, but more intense, hours. You have to create fun moments, where people get out of the office and talk to others. We have a ‘Level 13’ party at the end of some days. Fun allows you to be creative and innovative.

I’m doing things on a weekly basis that we used to take months to do. Recently, we created a Centre of Excellence for ecommerce. In Australia, ecommerce is not quite as developed [as in other countries]. We’re behind the goals, so how can we fast-track it? We formed a group very quickly, who are dedicated to working on this. Our ambition is to double our sales in ecommerce next year, from 2.5 per cent to 5 per cent.

People often want to match equality to numbers. In 2016, L’Oréal Australia announced that, for the first time, our management committee is majority female. But I don’t think it needs to be a mathematical equation. Everything we do is about equality –between men, women, races, religions and origins. We’re looking to see if there’s gaps between how people are paid. If there are, we correct them. Some years, we may have more women, other years, we have more men.

Employees work with local not-for-profits During our annual ‘Citizen Day’ program. Last year, we supported White Ribbon [the domestic violence organisation]. Women often leave their homes during the night with nothing. Over one day, 200 people in our warehouse put together 35,000 bags of cosmetics to give them. Every year we measure it and go back to our employees and see how it was. They have to really feel like they’re making an impact.

We’re always looking for beauty brands to acquire. The number of small brands developing every year are accelerating, so naturally we’ve accelerated our acquisitions, too. They need to have uniqueness and to complement our business. A lot of these brands are local, so the question is, can we internationalise them? That’s what we do as a company.

We’ve been developing more dermo-cosmetic products – skincare or make-up for problematic or sensitive skin. More than 50 per cent of Australia’s population say they have problem skin. It’s external, environmental factors: climate change, air pollution and stress. [Another market] is the seniors. The world population will continue to get old. Seniors today have the resources and will invest in beauty products.

I can’t say how the industry will look in 10 years. Today, three- or five-year plans are irrelevant after 12 months. You do need a vision, but you have to act in a short space of time. I do believe we will continue to see the market growing. The future of make-up is here to stay.

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