L’Oréal proves its worth as it bounces back from pandemic

It’s been 50 years since L’Oréal Paris launched its “Because I’m Worth It” selling line. The past year proved the proposition better than ever for the global beauty behemoth behind the flagship brand. L’Oréal came roaring back from the pandemic stronger than anyone—certainly analysts and investors—expected. And the selling line got more relevant as it evolved into a broader feminist manifesto. See all of Ad Age's 2021 Marketers of the Year here. Certainly the pandemic gave L’Oréal a hard time, like almost everyone in the beauty business. Stores closed. People stayed home and wore masks when they went out, eliminating much of the need for makeup. Yet L’Oréal recovered this year faster than the rest of the market across all of its businesses in the U.S. and globally. Sales excluding currency, acquisition and divestiture effects rose 21% globally and 23% in North America in the first half of 2021. In the third quarter, sales rose a more modest 18% globally but still 23% in North America. “The comp in 2020 wasn’t exactly disastrous, so the two-year growth is still phenomenal,” wrote Bernstein Research analyst Bruno Monteyne in a November note. North America had been a nearly decade-long weak spot for L’Oréal, he said. But moving away from slower-growing department stores, improving digital and e-commerce strategy and focusing on fast-emerging Active Cosmetics Division brands like CeraVe and La Roche-Posay softened the blow from the pandemic and accelerated the turnaround. Nicolas Hieronimus, who succeeded Jean-Paul Agon as global L’Oréal CEO in May, now expects the U.S., with a quarter of L’Oréal sales, to equal China as a growth driver. L’Oréal’s e-commerce share of its total sales was already 25% in 2019 and is still growing exponentially as the company invests in a “near future” where 50% of sales will come online, according to Evercore ISI. The research company noted that strength on Amazon in the U.S. was a key comeback driver for L’Oréal Paris. ModiFace, the Canadian augmented reality and artificial intelligence company it acquired in 2018, helped L’Oréal thrive as in-store makeup tryouts disappeared during the pandemic. One of L’Oréal’s Active Cosmetics brands, CeraVe, acquired in 2017, became a surprise star of the pandemic, growing 89% last year. The momentum continued into 2021, with sales up 28% in the third quarter, according to IRI data from Evercore ISI. The 15-year-old CeraVe didn’t even have an Instagram account when L’Oréal bought it, said Penelope Giraud, global general manager of the brand. L’Oréal helped kick-start CeraVe’s digital and social media presence, she said, including endorsements by “skinfluencers,” a strong Twitter presence and TikTok videos that landed CeraVe a place in Amazon’s “Internet Famous” section. L’Oréal has increased digital share of its media spending globally to command more than 70% of its total budget, but success means more than just going digital, Shenan Reed, senior VP and head of media for L’Oréal USA, said at two recent Association of National Advertisers conferences. Indeed, Reed said the onset of “screen fatigue” during the pandemic has given new life to live events and print subscriptions. The company takes an “advertising as a service” approach, Reed said. That includes avoiding placements with too much ad clutter; shunning re-targeting, which she compares to chasing someone out of a store to keep pitching an item left on the shelf; and trying to limit exposure to any one ad to 10 times per person. Consumer attention is “the most amazing gift,” she said. “Let’s reward them with creative that’s impactful, relevant and engaging.” As a prime example, Reed pointed to the global “Stand Up” campaign launched by L’Oréal Paris last year in collaboration with U.S.-based nonprofit Hollaback, which has helped train hundreds of thousands of people globally on how to combat street harassment of women. That’s just one way L’Oréal Paris has given new life of late to its “Because I’m Worth It” selling line. Recent ads include a video in which brand spokeswoman Eva Longoria talks to her first-grade self about self-worth. A diverse lineup of spokespeople—which also includes Hellen Mirren, Viola Davis, Aja Naomi King, Camila Cabello, Elle Fanning and Soo Joo Park—has helped fuel a strong reception for the campaign, said Delphine Viguier-Hovasse, global brand president of L’Oréal Paris. That “Because I’m worth It” has lasted 50 years is remarkable enough. Even more so, the agency that created it, McCann, still has the account, creating ads broadening its meaning. Ilon Specht, then a 23-year-old New York copywriter, came up with the line in 1971, defying the convention of male-perspective hair coloring ads with such lines as Clairol’s “Does She Or Doesn’t She?” According to agency lore, Specht came up with the idea the night before the presentation of having a woman face the camera to advocate for a more expensive product as her proclamation of self-worth, said Nannette LaFond-Dufour, president of global clients and business leadership of McCann Worldgroup. “It took the courage of the client at that time to say, ‘We’re going to do something totally different,’” she said, “and have this woman say ‘I’m worth it’ because the product cost pennies more.” Businesswise, the line still works by positioning L’Oréal Paris as affordable luxury, Viguier-Hovasse said. Socially, it’s taking on even greater meaning. “This sentence is stronger than ever and extremely appropriate to what we are living currently,” said Viguier-Hovasse. “That’s why with the 50th anniversary, my team said, ‘Oh my God. We have to re-explain that.’ Everything we do is because you’re worth it.” See all of Ad Age's 2021 Marketers of the Year here.

L’Oréal proves its worth as it bounces back from pandemic

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