Skincare Advisory Competitive Landscape 1
L’Óréal Paris United States encourages its customers to contact its beauty and cosmetics team experts through direct text messaging. L’Óréal has also launched the Effaclar Spotscan app that helps customers analyze their skin and recommends products that best suit them. Estée Lauder has developed a voice application called Liv that provides customers with a plethora of beauty content. Shiseido, Christian Dior, Puig, Kao Corporation, and Revlon, Inc. have trained in-store beauty specialists who tend to customers and offer advice.
- L’Óréal is a global leader in the cosmetics manufacturing industry. The company specializes in a wide range of products from mascara to skin and hair products. L’Óréal is found to operate under two broad segments — the cosmetics division and the body shop division. The cosmetics division is further classified into professional products, active cosmetics, consumer products, and L’Óréal Luxe while the body shop division engages in manufacturing toiletry and body care products.
- The professional products segment consists of nine brands with products that are distributed in salons across the globe. Examples of this segment’s brands include Redken, Matrix, and Mizani.
- The active cosmetics segment has six brands with products that are distributed in various healthcare outlets such as medi-spas, drugstores, and pharmacies. Examples of this segment’s brands include Sanoflore, SkinCeuticals, and La Roche-Posay.
- The company’s consumer products segment has eight brands that manufacture mass skincare products to be distributed across various retail channels. Examples of this segment’s brands include Garnier, Niely, and African Beauty Brands.
- Across its brands, L’Óréal offers expert advice to its customers through dedicated web pages that feature tips, tricks, video tutorials, and product-specific articles. It is also found that L’Óréal’s brands have different beauty advise content formats for different locations. For example, the United Kingdom’s L’Óréal Paris website features a separate web page for Trends and Tutorials by UK-based industry experts while the United States’ L’Óréal Paris website contains a dedicated beauty magazine with makeup/skincare tips, tricks, and tutorials.
- L’Óréal Paris USA has also enabled customers to contact the company’s expert team directly via text messages with queries on L’Óréal’s products, tips, and advice.
- L’Óréal has recently launched a face-scanning app, Effaclar Spotscan, that utilizes artificial intelligence to analyze and provide immediate dermatological advice. In 2018, L’Óréal launched its FaceTime-style beauty assistant that allows customers to try the product before buying it. The app also allows customers to chat with L’Oreal’s customer service agents.
- According to the company’s 2018 Annual Report, L’Óréal recorded €26.9 billion ($29.76 billion) in sales with 7.1% of like-for-like sales growth and 5.3% in operating profit growth. The company’s consumer products division accounted for 44.7% of the total sales while L’Óréal Luxe accounted for 34.8% of the total sales in 2018. In terms of business segments, L’Óréal’s skincare products amounted to 31.8% of the total sales, followed by makeup (27.4%), haircare (16.2%), hair coloring (10.9%), and fragrances (9.3%).
- Since its inception, L’Óréal has acquired 29 different companies, the most recent of which was the acquisition of Société Thermale de la Roche Posay in 2018. The company has made four investments in total, the most recent investment was made in 2018 when Poplar, an Augmented Reality platform, raised £150K ($197,228).
- Estée Lauder is a world leader in manufacturing and selling skincare and hair care products, makeup, and fragrances. Estée Lauder has a global presence in over 150 countries with more than 25 prestige brands such as Tommy Hilfiger, Lab Series, and La Mer.
- The company operates under four broad segments — skincare, makeup, fragrance, and hair care — and functions using a typical Fast-Moving Consumer Goods (FMCG) model. It was found that while Estée Lauder utilizes e-commerce distribution channels, most of its business is obtained through traditional retail platforms.
- To help customers with their skincare research, Estée Lauder provides customers with a live chat online option on its website. This tool is accompanied by integrated tech that enables customers to try on Estée Lauder’s products virtually. The company is also working towards improving customer interaction in stores by allowing customers to interact with Estée Lauder’s trained beauty advisors and consultants.
- The company utilizes Instagram and influencers to build relationships with its audience and provide advice to its customers. Estée Lauder has also launched a voice app called Liv that engages consumers with beauty content such as self-care routines. The app can be accessed through smartphones or Google Home.
- According to the company’s 2019 report, Estée Lauder recorded $14.86 billion in net sales which was an 8.62% increase from the previous year (2018). The report also showed that the company made $2.31 billion in operating income this year. Estée Lauder has acquired eight companies in total, the most recent of which was the acquisition of Have & Be Co. Ltd. for $1.7 billion in 2019. In 2017, Estée Lauder Companies made an undisclosed investment in Deciem.
- Shiseido is a Japan-based cosmetics company with a wide selection of fragrances, makeup, and skincare products. For over 140 years, the company has been providing customers with products of the highest quality. Shiseido’s portfolio of brands can be categorized into six broad segments — prestige, fragrance, cosmetics, personal care, professional, and healthcare.
- Across its brands, Shiseido has adopted four primary distribution channels — department stores, Shiseido chain stores, drug stores, and e-commerce platforms. Shiseido provides personal counseling to its customers at its locations in department stores and its licensed stores. The company also has dedicated web pages featuring beauty content by industry experts that range from tips and tricks to video tutorials on skincare routines for its customers.
- According to the company’s 2018 Annual Report, Shiseido recorded 1,094.8 billion JPY ($10.05 billion) in net sales with 14% year-over-year growth. Of the six business segments, Shiseido’s prestige brands saw the most significant growth (45%) in 2018.
- The company has acquired four organizations in total, the most recent of which was the acquisition of Drunk Elephant for $845 million in 2019. Shiseido has invested in three companies, the most recent of which was for Airfree SAS in 2019.
- Christian Dior is one of the world’s leading players in the makeup, skincare, and perfume industry with a large portfolio of prestigious brands that are driven by creativity, excellence, and innovation. The key brands under the makeup and skincare segment are Benefit Cosmetics, Make Up For Ever, Acqua di Parma, and Kendo. The company operates under four broad business segments — wines and spirits, fashion and leather goods, perfumes and cosmetics, and watches and jewelry.
- The operating model of Christian Dior is based on six factors — decentralized organization, prioritizing internal growth, vertical integration, creating synergies, obtaining long-term expertise, and having a complementary mix of locations and activities.
- Christian Dior gives its customers advice on product use and routines by allowing them to contact the company’s expert advisors via its chat online option. Customers will also be able to make an appointment with advisors in-store for a more personalized review. The Dior advisor team also encourages customers to request a call back for a personal analysis.
- Christian Dior reported €46.82 billion ($51.8 billion) in revenue with a gross margin of 66.6% of the total revenue in 2018. The cosmetics and fragrances division acquired €6.092 billion ($6.74 billion) in revenue with a profit percentage of 13% from the previous year (2017). Christian Dior was acquired by LVMH Moet Hennessy Louis Vuitton for $13.1 billion in 2017.
- Puig is a Spain-based third-generation family-owned fashion with a portfolio of 16 well-known brands such as Nina Ricci, Carolina Herrera, and Paco Rabanne. The company operates under three primary segments — fashion, fragrances, and toiletries. The fragrances segment is further categorized under niche brands such as Penhaligon’s, prestige brands such as Paco Rabanne, and lifestyle brands such as Azur and Sportman.
- The company assigns beauty advisors to in-store locations where customers can consult with Puig’s beauty experts for advice on skin routines, products use, and recommendations.
- According to the company’s 2018 financial results, Puig recorded €1.93 billion in net revenue with 5% like-for-like growth in 2018. The net income was reported as €242 million accounting for 13% of the total revenue in 2018. The report also indicated that 14% of the total revenue was generated by the Spanish market while 86% was obtained from other countries.
- Puig acquired Dries Van Noten for an undisclosed sum in 2018.
- Kao Corporation is a Japan-based cosmetics company that specializes in developing beauty care, skincare, and hair care products. The Kao Group operates in four business divisions that target the general consumer — skincare and hair care segment, cosmetics segment, fabric and home care segment, and human health care segment. The company also develops a wide variety of chemical products for businesses in the industry.
- The cosmetics segment of the company engages in developing makeup and skincare products. Skincare brands under Kao Corporation include Sofina and Est while makeup brands include SUQQU and Kate. Kao Corporation also owns prestige cosmetics brands such as Molton Brown and Sensai.
- The skincare and hair care segment of the company contains brands such as Essential, John Frieda, and Merit. The segment also includes professional hair salon brands such as Oribe and Goldwell.
- Kao Corporation has adopted the concept of employing Beauty Advisors who will coach and guide customers in choosing the right product that best suits their needs. Kao’s beauty consultants will assist customers to plan a tailored skincare routine by conducting a skin analysis with AI-powered devices.
- Kao Corporation reported 1.508 billion JPY in net sales with the cosmetics business segment accounting for 18.5% of the total sales and the skincare business segment accounting for 22.6% of the total sales in 2018. The 2018 Annual Report of Kao Corporation also indicated that the company recorded 207.7 billion JPY in operating income and saw a 0.83% of year-over-year revenue growth. Kao Corporation has acquired four companies, the most recent of which was the acquisition of Washing Systems in 2018.
- Revlon, Inc. is one of the world’s leading beauty and cosmetics company with a portfolio of well-known brands that manufactures and sells cosmetics, hair care and hair color products, beauty tools, grooming products, skincare products, antiperspirant, and fragrances in over 150 countries. Revlon, Inc. operates around four business segments — Revlon, Fragrances, Elizabeth Arden, and portfolio brands that are designed to improve brand equity.
- With the help of Revlon’s in-store beauty advisors, customers have the ability to obtain a personalized analysis so that they might plan the right skincare routine, purchase the right products, and manage their skin better.
- According to the company’s 2018 annual report, Revlon recorded $2.56 billion in net sales with North America generating the largest share of revenue ($1.354 billion). It was also found that the year-over-year revenue growth for the final quarter of 2018 amounted to -8.85%.
- Revlon, Inc. has acquired five companies, the most recent of which was the acquisition of Elizabeth Arden for $870 million in 2016. The company has raised a total of $50 million in funding over a single round (Post-IPO Debt).