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When Jean-Paul Agon became chief executive officer of L’Oréal, he set himself and the company a bold goal: to attract one billion new consumers over the next decade. Here, Agon describes how he created his signature strategy of universalization to appeal to women the world over—and help fuel sales to ever more historic highs.
This story first appeared in the February 8, 2013 issue of WWD. Subscribe Today.
A week ago I was in Mumbai and a young Indian woman explained to me how she was applying coconut oil by massaging her head. She also showed me how she was making her own fairness cream in her kitchen, mixing together honey, egg yolk, cream and cumin, as her mother used to do. Home visits are inspiring, because in India, like in many other countries, beauty routines are deeply rooted in centuries of traditions.
These consumer insights are part of what inspired the new strategy that we set up four years ago at L’Oréal called “universalization.”
At that time, markets were opening everywhere, redrawing the boundaries of the cosmetics world. Emerging countries were becoming vast reservoirs of new consumers. These fantastic opportunities led us to adopt a new ambition for the group: captivating one billion additional consumers in the next decade. This symbolic goal was designed to clearly share L’Oréal’s new ambition with our internal team as well as our external partners.
Targeting two billion consumers and rapidly expanding our playground to new markets was a considerable change of scale and ambition. Universalization was not only a new vision, but also a complete rethinking of our own organization and mind-set.
For us, universalization means globalization without uniformization. With universalization, we strive to achieve local relevance in a global world. We glo- balize our brands, but customize the formulas to create tailor-made products in each country. These products are adapted to different cultures, beauty traditions, lifestyles and purchasing power in every part of the world.
For years, we have been developing geo-cosmetics, the science of local observation. This allows us to take both the consumer’s physical qualities (skin, hair) and their cultural specificities into account.
Our new ambition required us to go one step fur- ther. We began with our Research & Innovation department, which we totally transformed over the last few years. Our R&I network is now comprised of worldwide research centers as well as regional hubs in all major markets worldwide. In India, for example, we just opened a hub that works closely with worldwide research centers but whose specific mission is to accelerate innovations and new product developments, so as to create customized, unique and accessible products like the Colossal Kajal eyeliner from Maybelline New York, which is inspired by traditional kajal but also offers the best in technology.
Meanwhile, we have reorganized and reinforced our marketing structures in key markets, in order to capture all our consumers’ desires throughout the world. We have thus created marketing hubs in major strategic markets such as the United States, Japan, Brazil, China and India. Our group is now able to meet the vast diversity of needs of the new generation of consumers. Overall, universalization has strongly developed our ability to innovate as well as our intimacy with consumers all over the world.
Our organization model now combines a strong central nervous system with a strategic vision and several local hubs, both in research and in marketing. Thanks to universalization, innovation now comes from everywhere. Learning from expert consumers and centuries of traditions is also a source of breakthrough concepts for the rest of the world since certain beauty concerns and expectations are shared by very differ- ent populations. Our markets have become sources of creativity.
This process has created incredible success stories. One of the best examples is the Garnier BB Cream. Inspired by the success of this product in South Korea, we developed a new-generation BB Cream for China. It was then rolled out all over Europe and the United States. Since then, the Garnier BB Cream has further been adapted to the hot and humid climate, and above all, to the wide spectrum of Indian skin-color shades.
L’Oréal collaborators immediately embraced this new vision and strategy of universalization because they themselves were at the core of it. L’Oréal is comprised of about 115 nationalities, working together in a multicultural environment, where every day they can bring their own convictions of beauty to the table and be heard. That’s probably why we have been referred to as the United Nations of Beauty.