L’Oreal used to love big hair – now it loves big data
Select language to see a machine translation of this article. The original language of the Article is English and the translation is provided for your convenience.

L’Oreal used to love big hair – now it loves big data

Cosmetics giant L’Oreal is pursuing data over who buys what, why, and how much, in an effort to close the gap with big online retailers. The company’s data acquisitions and partnerships team, headed up by Aruna Paramasivan, uses its own (fairly limited) data from Ecommerce sales alongside “more scaled” data sets from Sephora and partners like Amazon, to build “internal audience segments” whose future behavior it then models. This complex strategy has a definite aim: to close the gap in data quality when it comes to media activation (what ad space to buy for various marketing campaigns), and the measurement of those campaigns’ performance.

L’Oreal’s share price has appreciated by 22% so far this year

loreal

SOURCE: Yahoo Finance

Talking about the requirements – and frustrations – of her role, Paramasivan told listeners at the IAB Data Symposium earlier this month that “you want at least a million consumers per segment”, highlighting the difficulty in building reliable models. This is a hurdle that third parties – like big online retail sites that stock L’Oreal’s products – can help the company jump with relative ease. But analyzing how campaigns are performing is a more daunting prospect – partly because of data quality, but also because analysis and innovation tend to pull in different directions. Paramasivan said:

“It’s frustrating for us because the attribution and measurement decisions right now don’t have the granularity and data quality we’d like. What’s the fidelity of the data signal? How close to the direct consumer and to real time is the data? There's always something new in this space, so supporting existing campaigns while also staying current in an innovative environment is critical.”

Ultimately, she has no doubts about the importance of the work. Big data is a crucial part of the information economy, that lets forward thinking brands get an advantage over their slower moving counterparts (just look at the online retail world for proof of this factor). That’s why Paramasivan is clear about nurturing the environment that will lead to better data: “At the brand level, you’re very dependent on your ecosystem and the technology system holding it up.”

Disclosure

Dominion holds L’Oreal in its Global Trends Luxury Fund.


If you would you like to receive the Newsfeeds daily, please click here to sign up now!

Help us make this Newsfeed better by rating this article. 1 star = Poor and 5 stars = Excellent
0.0/5 rating (0 votes)

Disclaimer
The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.