L’Oréal’s chief retail officer Marc-Alexandre Risch has identified a key culprit driving shifts in the industry — and, not surprisingly, it’s technology.
“Man was made of flesh and bone for a long time, now people are empowered — they’re flesh, bones and they have a phone,” Risch said. “For a hundred years we’ve been doing retail and retail has existed…what has changed the game is technology.”
It’s driving lots of change for a company like L’Oréal that was essentially built as a wholesaler, Risch said, and the rise of direct-to-customer and e-commerce has caused the beauty giant to rethink things. Several of its brands have stand-alone retail stores now, including Kiehl’s and NYX.
“The creation of my role as chief retail officer is to tackle these topics and help our brands to grow in a time where it’s all about the customer and the right touchpoint…and the consistency of the message.”
Advances in technology (and Amazon) have raised expectations from customers, Risch said. He called Amazon a “key disruptor” and the “number-one driver of customer expectations in the way people shop online.”
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“You cannot skip Amazon,” Risch said. “People shop on Amazon, and they expect to find our products. [It is] up to each brand after that — and this is where I will draw a line and [not] get into detail — of each brand to define…what is your right strategy of distribution? How do you meet the customer expectation?”
Expectations are likely to shift even more once Gen Z grows up, Risch noted, as they are an even more community-oriented and experiential group. “Their shopping pattern behavior is different, but they have a huge sense of community,” he said. “There’s a disrupting, but it’s about reinvention…the question is, what is the experience we can bring?”
To get it right, brands and retailers need to keep customers at the center of the equation. It requires continuously keeping tabs on customer shifts — and they are shifting constantly and quickly, according to Risch. The goal should be to understand who a customer is, the expectation when they visit a store, how to contact that customer and how to make sure the message sent drives the customer to the channel they are most likely to shop in, he said.
“The purchase is not the end game anymore,” he added. “It’s about engagement with the brands…it’s about the lifetime value of your customers.”