L'Oréal buys ModiFace to boost digital strength; AmorePacific expands in Australia; online spending in Australia hits a record $21.3 billion; and Chanel Beauté to enter Ulta stores.
L'Oréal buys ModiFace to boost digital strength
L'Oréal was a pioneer in digital beauty innovation and remains in pole position. Major milestones for the French multinational include a strategic investment in Founders Factory, a digital accelerator, to invest in five world-class beauty start-ups and co-create two new companies each year. In addition to Makeup Genius, the app which has been downloaded more than 800,000 times in Australia alone, other innovations from L'Oréal's Tech Incubator division encompass My UV Patch from La Roche-Posay and Style My Hair from L'Oréal Professionnel which allows consumers to try out new styles and colours.
According to L'Oréal head of digital and media ANZ Christophe Eymery, innovative technology has become vitally important in today's beauty industry because of the evolution of the consumer. "Women like to make up their own minds these days and define their own beauty by discovering new products and trying before they buy". And that's the major reason why L'Oréal has bought ModiFace, whose app lets consumers see themselves wearing different makeup and hair colours under different lighting.
ModiFace was founded 11 years ago in Toronto by engineering professor Parham Aarabi. Until L'Oréal's acquisition for an undisclosed sum, the company worked with 100 of the world's top beauty brands and electronics giants such as Samsung. ModiFace will remain in Canada but will be part of L'Oréal's Digital Services Factory. The company employs 70 engineers, researchers and scientists and has registered more than 30 patents.
According to L'Oréal's chief digital officer Lubomira Rochet – "ModiFace will support the reinvention of the beauty experience around innovative services to help our customers discover, try and choose products and brands. We at L'Oréal and ModiFace want to pioneer this new page in the beauty industry".
AmorePacific expands in Australia
As we reported recently, AmorePacific has launched its major skincare brands in the US – Laneige, Sulwhasoo, Innisfree, Etude House and Mamonde. In preparation for its expansion in Australia, the South Korean giant opened an office in Melbourne earlier this year. Caroline Dunlop, formerly head of retail marketing at MECCA Brands and brand general manager at The Estée Lauder Companies, was appointed general manager to lead the charge. AmorePacific's premium mid-tier brand, Laneige, debuted in all Sephora stores and online nationwide last week.
The move is a no-brainer. Over 120,000 Australians claim Korean heritage and then there's the Chinese who love Korean cosmetics. In the 2016 Australian Census, more than 1.2 million people claimed Chinese heritage and Australia attracts more than 1.3 million tourists from Mainland China each year – a figure set to triple over the next eight years.
K-Beauty also has a more widespread appeal and AmorePacific is riding the current hydration wave in skincare to attract local fans with key launches such as Laneige Water Sleeping Mask, Water Bank Essence and Lip Sleeping Mask. The company has also been eyeing the Australian market for some years because of its expertise in UV protection and other environmental issues. AmorePacific plans to launch its eco-friendly skincare brand, Innisfree, later this year to cue in with the high preference in Australia for natural skincare.
Online spending in Australia hits a record $21.3 billion
Double digit growth of 19.2 per cent in 2017 saw Australia's online shopping "bill" rise to a record $21.3 billion, according to Australia Post's e-commerce market update. An even more impressive figure when you consider that it doesn't include the billions spent on air travel, accommodation and entertainment.
Sales events such as Black Friday, Cyber Monday, Singles Day and Click Frenzy played an important role in the buying spree for "physical goods", notes Australia Post. Fashion continues to be a winner, posting a growth of 27.2 per cent in 2017. The need for more "stuff" isn't the only motivation. More retailers have got their act together to make online shopping experiences more seamless and returns more convenient, adds the report.
Chanel Beauté to enter Ulta stores
Times are changing fast. Ulta, the largest specialist beauty chain in the US, has been selling prestige brands for some time, especially in fragrance and through partnerships with key players such as Lancôme, Clinique and Estée Lauder. The pressure is also on for more premium brands based in Australia to sell through more egalitarian outlets. Ulta already offers Chanel fragrances, notably its latest release Gabrielle, in select stores. But the imminent arrival of Chanel Beauté is a seriously big deal – not only for the US but for other markets as well.
Chanel Beauté makeup is normally available through standalone stores, the Chanel website and department stores. Ulta has announced it will carry a curated collection in selected doors only, with the rollout kicking off in a few weeks time in Westport, Connecticut. A Chanel-branded makeup station is planned for the chosen outlets.
Launching in Ulta worked for M.A.C in attracting younger customers to the Lauder-owned brand and Chanel is hoping to capture more Millennials as well. Why not Sephora for the historic move? The reason could be that Charles Heilbronn, a half-brother of Alain and Gerard Wertheimer, the billionaire owners of Chanel, has been a director of Ulta Beauty for 23 years and Chanel itself owns a large tranche of shares in the US beauty chain store. In addition, Ulta's net sales climbed 21.2 per cent in 2017 to $US5.88 billion.
Snippets from the wires
- According to Euromonitor International, Australia's average cosmetic spend per capita ranks in the global top five and 35 per cent of the total market is classified as prestige.
- The middle market bag market is going from strength-to-strength. Coach netted global sales of $US1 billion in 2017. Longchamp's revenues topped $US642.5 million in 2016 and Furla is poised to reach annual revenues of half a billion euros ($AUD796.7 million) by the end of the year.
- Miranda Kerr's KORA Organics brand launched on Tmall in China last week. The Aussie supermodel live-streamed from her home in the US, attracting 223,000 live viewers.
- Zara never rests on its laurels. The fast-fashion brand launched its Australian online platform last week. Owner Inditex also announced the roll-out of augmented reality displays in 120 stores around the world on April 18th. In a bid to reach out to Millennials and Gen Zers, customers can buy different looks with their smartphones – in-store or next to the designated windows.
