L’Oréal looks to drive up ecommerce sales in AR partnership with Facebook

L’Oréal is partnering with Facebook to develop augmented reality experiences for its brands as it looks to improve the customer experience and drive up ecommerce sales.

The collaboration will see L’Oréal’s recently acquired AR entity Modiface create augmented reality-powered services such as make-up try-on for its brands that work with Facebook camera products. The collaboration will initially be tested on L’Oréal’s NYX Professional Makeup brand at the end of August, before being rolled out across other brands in the coming months.

The move is part of L’Oréal’s digital transformation, as it looks to use digital to improve the customer experience and get its products in the hands of more consumers. The AR services will allow consumers to, for example, see how beauty trends look on them and choose the right shade of make-up for them. They will then be able to click through to buy the product on L’Oréal’s website.

Speaking to Marketing Week, L’Oréal’s chief digital officer Lubomira Rochet says the collaboration offers the opportunity to get its brands in front of the more than 2 billion people who use Facebook and offer them new ways to try out its brands before buying.

“For some consumer areas, including beauty, augmented reality is really key in elevating and improving the experience for consumers. This will enable them to try on before they buy, and is core to our mission to democratise beauty,” she explains.

Ecommerce is an increasingly important growth area for L’Oréal. According to its 2017 annual report, it now generates more than €2bn annually from online sales – equal to 8% of its total revenues and making it the beauty company’s third biggest market for revenue. It has seen particular success in China, where ecommerce accounts for more than a quarter (26.4%) of sales.

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L’Oréal is now keen to find new ways to generate ecommerce sales growth beyond its own channels, and sees social commerce as a key source of new revenue. While the main objective for its AR plans is to reach new consumers in a “fun, educational and entertaining way”, conversion will also be an important KPI.

“We clearly see an increase in conversion coming from social networks on ecommerce. Facebook and Instagram are becoming ecommerce platforms and we want people to be able to experience our brands and also be able to buy seamlessly,” says Lubomira.

While Facebook is the first major AR collaboration for L’Oréal, there are plans to launch others, although Lubomira won’t be drawn on who the company is in talks with. However, Modiface has previously worked with Samsung and Pinterest on AR services.

Lubomira describes the acquisition of Modiface as being a “great journey so far”, but admits challenges remain. One is keeping the company’s startup culture, something she says L’Oréal is very careful about whenever it makes an acquisition. To do that, Modiface’s 70-strong team is still based in its office in Toronto and founder Parham Aarabi is left to manage it “as he used to”.

However, to ensure its brands benefit from the tech, L’Oréal has created an in-house tech arm, called the Digital Service Factory, that acts as an interface between the team in Toronto and the brands in-country. That means all roadmaps and requests to use the Modface team are managed through this team of around 10-15 people.

The issue of data sharing on Facebook has been brought to the fore since the Cambridge Analytica scandal, but L’Oréal says it won’t be receiving any consumer data through the services. However, it will be able to use engagement data to see how many people have engaged with the AR services, what products and shades they may have tried on and conversion rates.