L’Oréal has joined the global D2C trend with a brilliant new concept. Their corporate venture, color&co, enables you to video chat with a professional hair colourist and get a personalised hair colouring kit delivered to your door.
With an increasing number of companies accelerating their digital transformations and more customers than ever shopping online, D2C has hit the mainstream, enabling businesses to:
- Take control of their branding and messaging.
- Build loyal communities through social media.
- Increase their profit margins by cutting out the middleman.
The D2C model has proven to be quite resilient, even during the 2020 pandemic. According to Statista, D2C sales in the U.S. alone are expected to reach $21,25B by the end of 2021. With numbers like that, it’s no wonder that even established enterprises like Nike, Disney and Verizon have all put forth their own D2C ventures – with outstanding results.
Let’s take a closer look at how L’Oréal is changing the world of home hair colour using the D2C approach.
About L’Oréal and Tech Incubator Lab.
L’Oréal is one of the world’s leading beauty and cosmetics companies, with numerous subsidiary brands like Lancôme, Yves Saint Laurent, Maybelline, Urban Decay and Biotherm, just to name a few. As described on the website, a big part of their company mission is to:
“..shape the future of beauty by leveraging the best of science and technology, increasingly inspired by nature.”
To help meet these goals, the company invested over €985M in research and innovation (R&I) to test new concepts in markets like the US, Japan, Brazil, China, India and South Africa. As part of that same strategy, they launched the L’Oréal Tech Incubator in 2012.
With a team of about 30 employees, the Tech Incubator’s goal is to help L’Oreal leverage different technologies to create personalised products and experiences for consumers. Some of their most notable ventures include:
- Seed Phytonutrients, a sustainable beauty and skin-care brand.
- Perso, an AI-powered skincare and cosmetics device.
- La Teint Particulier a customised foundation shade finder.
Using some of the key insights gained from past ventures, the Tech Incubator launched color&co in 2019, making professional, customised hair colour available outside a salon.
Meet L’Oréal's color&co.
color&co essentially packages the salon hair colour experience and delivers it to your door in a personalised kit. The service enables customers to consult a professional hair colourist via video chat and discuss things like their desired hair colour, hair health, and any special care needs.
The process is meant to reduce undesired results, provide guidance and give each customer a salon-quality result in the comfort of their own home. Customers are even encouraged to hold up images of the exact tone they’re looking for or show the stylist any process damage so they can provide accurate advice – just like at the salon.
Within the hair colouring space, customers usually have two options, to pay a premium salon price, or to purchase an at-home colour kit. color&co offers clients a middle ground, so they can enjoy professional guidance even if they can’t afford a salon. It’s also a great alternative to have during a pandemic like Covid-19 or if you simply don’t have the time to make it to the salon.
The concept is also quite beneficial for hair colourists, acting as a kind of “beauty Uber” through the color&co Collective. Professional stylists who join can supplement their income by offering video consultations on a flexible schedule. As described by co-founder Deb Rosenburg:
"If colourists don't have someone sitting in their chair, they might not be getting paid. Or, after 20 years of standing, maybe a hairdresser is tired and wants to sit down on Tuesdays. Maybe their kid is going to college, and they need to generate extra income," Deb Rosenburg
All color&co stylists are vetted, licensed and qualified professionals with seven to thirty years of experience, so you know you’ll be in good hands.
How it all started.
Many of the products and services created at the L’Oréal Tech Incubator are based on actual customer pain points. As described by Global VP, Guive Balooch:
"Beauty consumers are asking us for increasingly personalised experiences, and we saw a real opportunity to innovate in this cornerstone of our business." Guive Balooch
With up to 70% of at-home colour users worrying about unpredictable results or which colour to choose, the team seized the chance to transform the experience. Corporate assets like L’Oréal’s salon connections, its expertise in hair colouring, past D2C venture insights and its existing customer base, provided the basis for the creation of color&co.
How it works.
Customers can get their customised color&co Hair kit in three easy steps:
Step 1: Choose between a live consultation or an online questionnaire.
The color&co website enables customers to either arrange their live chat with a professional stylist or choose to answer a few quick questions online. Both options gather information about your hair health, length, texture, goals and of course, your desired hair colour.
Step 2: Sign-up for an account.
Once you’ve signed up for an account (with your name, e-mail and private password), you’ll get your personalised results.
Step 3: Choose between a one time purchase or a subscription.
You can order your colour kit as a one time purchase for $29.90 or a subscription service for $21.90. The frequency of delivery for subscriptions can be adjusted based on your preferences. Each colour kit is delivered with personalised application tools and instructions.
Each colour kit comes with a 100% satisfaction guarantee or your money back.
The benefits.
Like most corporate ventures, a large part of color&co’s success comes from its parent company’s considerable know-how and assets. Some of the vital corporate assets used to get color&co off the ground include:
- The trust and confidence that comes with the backing or L’Oréal.
- Connections and partnerships with hair salons all over the country.
- Expertise in the creation and distribution of home hair colour.
- Feedback and customer data from L’Oréal’s existing customer base.
- Existing production and distribution lines.
- Technology and the talent to apply it in new and creative ways (e.g. video chats).
- Funding and infrastructure.
- Insights gathered from previous D2C ventures.
According to an article by Cosmetics Design-Europe, the launch of color&co took years to achieve. It probably would have taken even longer without the vital corporate assets mentioned above.
L’Oréal, for its part, also stands to gain a lot from building a venture like color&co. Not only is it delivering a virtual treasure trove of new customer insights, and leveraging existing corporate assets in new ways, it might also become a significant revenue stream in the future. Additional benefits include:
- Enabling L’Oréal to pioneer a service with disruptive potential.
- Evolving and expanding on its current offering.
- Building its reputation as an innovative industry leader.
- Increasing its market share by tapping into a new customer base.
What’s next for L’Oréal's color&co?
Although color&co is still a young venture, it’s showing great promise in terms of customer interest and growth potential. Rosenburg plans to keep growing the color&co Collective with talented and experienced stylists so that customers can book consultations 24/7 (at the moment they’re only available Monday through Friday, 8 am to 12 pm EST).
Other plans include efforts to expand the brand and build more customer engagement in the next few months.
As for the L’Oréal Tech Incubator, they’re getting ready for the official launch of their latest venture, Perso (mentioned above). With all the interest in customised cosmetics and skincare, this AI-powered, no-fuss device is sure to appeal to many customers.
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