THE CHALLENGE: To develop a comprehensive innovation portfolio for L’Oreal based on future forecasting for the industry, by developing incremental and radical innovation solutions.

L’Oreal is one of the leading beauty and personal care companies, growing at 2x the rate of the global beauty market with €32 billion in sales in 2021.

Finding Opportunities for Growth

By analyzing L’Oreal’s financial statements and reports, we identified the following opportunities:

• Haircare and skincare are the leading categories
• Ecommerce has been the main driver of growth for 2 consecutive years, accounting for 29% of their total sales as of 2021
• USA, Latin America and North Asia are the regions driving the most growth
• Most of this growth came from Professional Products, those designed to be used by beauty professionals and salons, and Active Cosmetics, those with chemical components that improve the skin or hair
• Scientific innovation and research is a key competitive advantage, with 4,000 scientists worldwide, €1.029 million invested in research and innovation

Industry Trends were completely aligned with L’Oreal’s growth opportunities

• Skincare is one of the biggest and most dynamic categories in beauty, followed by haircare
• In line with L’Oreal’s growth, ecommerce has become one of the main channels in the industry
• Personalized services and products powered by tech and data are becoming a must
• Health is becoming a priority when addressing beauty
• Providing sustainable products, without exceeding the planet’s limits is a concern for consumers (L’Oreal for the Future)
• More men are starting to use cosmetics, specially in Asia

The Challenge Map

Taking into account current trends and growth opportunities, challenges to tackle were organized based on priority and impact. These include challenges for culture change and corporate innovation:

Innovation Portfolio

Taking into account the previous challenges and an ideation process, 16 innovation projects were evaluated and selected to be part of L’Oreal’s Innovation Portfolio. These were selected based on the challenges they tackle, impact and their degree of technical and market uncertainty:

Each of the projects was prioritized based on their urgency, environmental and innovation or tech impact and expected investment. Take a look at a detailed description and evaluation of each here:

Timeline & Budget

The implementation plan and budget for each project was assigned based on the factors evaluated above (impact – in the environment, tech and innovation of the company and urgency).

Project Highlight: GENE4U

One of the most relevant projects included in the portfolio is GENE4U, an online platform designed to use genetic analysis to create personalized beauty product recommendations. By partnering up with DNA Genetic Testing companies, Customers will send their DNA sample and get a specialized report about their beauty genetics and product recommendations.

The Future: Gene Therapy

Taking into account a longer time horizon, investment in research for Gene Therapy is one of the priorities. The aim is to develop gene therapy sessions that will enable customers to permanently change aspects they don’t like about themselves, such as skin and hair characteristics.