L’Oréal sees uptick in professional products sales, driven by new omnichannel strategies for hair products
01 Aug 2022 --- L’Oréal is seeing growth in its professional products range, which includes the hair care brands Kérastase, Matrix and Redken. The beauty giant netted €18.36 billion (US$18.8 billion) in generated sales, up 13.5% on a like-for-like basis, as reported in its recently released 2022 half-year results.
The growth was mainly fueled by new omnichannel approaches, hair care and skincare NPD, the L’Oréal Luxe Division and active cosmetics.
“After two years of the pandemic, consumers confirm their desire to socialize and indulge themselves with innovative beauty products, which in turn is fueling the growth of the beauty market. L’Oréal grew twice as fast as the market and has strengthened its position,” remarks Nicolas Hieronimus, CEO of L’Oréal.
“We remain optimistic about the outlook for the global beauty market and confident in our ability to outperform in 2022 and achieve another year of growth in sales and profits,” he adds.
Omnichannel approach
The Professional Products Division experienced a significant increase at the end of June, with like-for-like growth of 14.3% and reported growth of 21.7%.
The company’s selective divisions experienced double-digit growth and its consumer products saw a strong acceleration.The company adds that all geographical zones saw significant growth for this division, with India, mainland China, North America and Germany exhibiting particularly robust growth.
With a notable increase in sales in e-commerce, salons, and the SalonCentric distribution network in the US, the company sees this growth as demonstrative of the strength of the division’s omnichannel approach.
“Our performance is increasingly balanced between volume and value growth. It is balanced between offline growth, with the reopening of retail outlets in most countries and e-commerce growth which continues at a double-digit pace,” adds Hieronimus.
“The company’s performance is also balanced between geographic zones, all of which posted double-digit growth, with a strong performance in emerging markets – such as Latin America – and outstanding performance in mainland China in a very challenging context, due to our expertise in e-commerce.”
Hair care innovations
L’Oréal’s Professional Products Division particularly spotlights the strong performances of the brands Kérastase and Serie Expert by L’Oréal Professionnel amid a competitive haircare industry.
The Division also experienced significant growth in the hair color market through the popularity of its lines Shades EQ by Redken and Inoa by L’Oréal Professionnel.
The company continued to innovate around its Redken Color Gels Lacquers 10 Min solution, which enables hairstylists to “completely cover white hair in 10 minutes.”
L’Oréal Luxe outperformed the global luxury beauty industry in the year’s first half, recording very high growth of 16.4 % like-for-like and 25.6% reported.“Our divisions achieved double-digit growth and the Consumer Products division recorded a significant acceleration in the second quarter. Lastly, every major category achieved double-digit growth,” says Hieronimus.
The Professional Products Division expanded in the US through the SalonCentric distribution network in the US, touted as L’Oréal’s “first marketplace for beauty professionals.”
Skincare and consumer products
The Consumer Products Division had a solid first half, growing by 8.0% like-for-like and 13.9% reported, with the second quarter of 9.1%. Its key brands’ achievements and product innovations were the foundation for this performance.
The Division attributes its progress to the success of NYX Professional Makeup and other products like the True Match serum by L’Oréal Paris and Vinyl Ink lipstick by Maybelline New York.
Additionally, the Division also saw double-digit growth in haircare, with the successful focus on premium ranges and the global introduction of Elvive Hyaluron Plump.
With the popularity of the company’s Vitamin C Brightening Serum and micellar waters, the Garnier brand notably maintained its growth in the various zones of the skincare market. It was noted that early in the second quarter, the Shanghai lockdown slowed product deliveries in mainland China.
L'Oréal Luxe Division
L’Oréal Luxe outperformed the global luxury beauty industry in the year’s first half, recording very high growth of 16.4 % like-for-like and 25.6% reported.
The Division excelled in each of its three categories. Along with the recently acquired brands Takami and Youth, the super-premium brands Lancôme Absolue and Helena Rubinstein led the increase in skin care.
The company adds that all geographical zones saw significant growth for this division, with India, mainland China, North America and Germany exhibiting particularly robust growth.The Division of Fragrances expanded by 5%; international leaders like Libre by Yves Saint Laurent and Valentino’s Born in Roma served as effective growth catalysts.
In other highlights, L’Oréal’s Collections market – within the Luxe Division – is “thriving and has great potential,” notably boosted by Armani Privé. In cosmetics, global brands like Shu Uemura and Urban Decay, as well as the category experts Lancôme and Yves Saint Laurent, expanded “substantially quicker than the market, which kept changing,” according to L’Oréal.
Performance across geographical zones remained balanced for the Luxe Division, while L’Oréal Luxe notably picked up speed in Latin America.
Active cosmetics in focus
The company’s Active Cosmetics Division saw growth at the end of June, with like-for-like growth of 20.9% and a reported increase of 28%.
The Division expanded significantly more quickly than the dermo-cosmetics market due to a strengthened partnership with healthcare professionals, which supports the Division’s recommendation-based business strategy.
All areas saw double-digit growth for the Division, with North America and Europe showing solid results.
Additionally, this Division’s e-commerce and brick-and-mortar businesses both experienced growth during the year’s first half, with the drugstore and pharmacy channels making a significant contribution. La Roche-Posay, the main driver of the Division’s expansion, picked up speed.
Inflation impact
Regarding the current inflation environment and supply chain issues weighing down the beauty market, Hieronimus comments: “Our capacity to valorize our portfolio through innovation and control our costs allowed us to absorb the impact of higher raw material prices, mitigate supply chain pressures and continue to invest efficiently in our brands while improving profitability and creating sustainable value.”
“Our L’Oréal for the Future program reached a significant milestone: after the US in 2021, we achieved carbon neutrality across all our sites in the North Asia Zone,” he highlights. ‘In addition, the success of our third employee share ownership plan rolled out in more than 60 countries.”
By Nicole Kerr
