For Nicolas Hieronimus, chief executive officer of L’Oréal, scale and speed aren’t mutually exclusive.
“We have this incredible agility that has allowed us to adapt and to transform,” he said at the Economic Club of New York on Wednesday. “We are a company that is constantly transforming, and becoming a digital champion now.”
Hieronimus, who helms the world’s biggest beauty manufacturer, credited L’Oréal’s decentralized model for its success. “We are a very decentralized operation, which allows any part of the world to adapt to the conditions of the market, to make their own investments, and to choose the battles they want to fight,” he said.
He sees consumers trading up for more expensive product, despite economic headwinds. “It’s true that the world is very troubled, and it’s also true that beauty as a category is very unique,” he said.
“People are spending more on better products, because beauty is this category that is both a need and also an indulgence. For as little as $25 for a beautiful lipstick, it’s not such a big cost,” he continued. “Prices are going up around the world, and it’s driven by the development of middle classes everywhere around the world, particularly in emerging markets or in China.”
As reported, L’Oréal saw digital sales in China grow double-digits, a result of COVID-19-related lockdowns hampering brick-and-mortar traffic. Per the same report, other key zones, such as North America and Europe, grew sales by double- and single-digits, respectively.
It’s not just in various geographies Hieronimus sees opportunity — it’s also in different channels. Post-pandemic, beauty shoppers are shopping more digitally than ever, and Hieronimus plans to be among the first in the metaverse.
“Last year was a bit of a brick-and-mortar bounce-back, but overall, people’s habits changed… it is now much more online plus offline, ‘o-plus-o’.” The next step, he said, is “on-chain — that will be the metaverse version of shopping, which is probably still further away.”
The metaverse presents opportunities given how quickly avatars can transform, he contended. “They want to change often. If I wanted to go platinum blond tomorrow, we won’t be able to go back to what we had today. That’s something you can do in the metaverse, and so many of these players are changing their outfits every day,” he said. “It’s a great way to engage with our brands, and it’s a great way also to foster creativity.
“Hopefully one day, we’ll also be selling lipsticks in the metaverse. We just have to make sure that they can identify the difference between the L’Oréal quality and the average quality, which is what we do in real life. It’s harder to develop, but we’re working on it,” he continued.
Hieronimus acknowledged the company’s science-forward approach to development, and while he credits that innovation for L’Oréal’s success, he still has his finger on the competition’s pulse.
“Whenever I travel, I ask the local team to put in my bedroom the most competitive competitors’ products,” he said. “You discover it. Obviously, we are huge, but we only have 14 percent to 15 percent of the world’s share. So, we still have room to grow, and to see what the other guys are doing is very, very important.”