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Inside L’Oréal’s Revamped Customer Service Model

A CCW Digital Analysis

Matt Wujciak


Facial recognition, Influencer Marketing, (creepily) personalized machine learning, and a number of other standard business practices (unprecedented in the previous decade) now regularly impact our lives, notably determining which brands we choose to throw our money at, and how exactly we’re doing it. 

That being said, there has never been a more exciting time for customer-centric brands to capitalize on technological advancements throughout the consumer journey.

Read More: The Problem With Digital Transformation (Featuring Insights From Adidas Golf)

While the vast majority of service-oriented brands are using automation incorrectly, others are reaping benefits and enjoying a healthy ROI. Here’s one short case study on a brand that nailed it.

Improving consumer engagement

While the L’Oréal business infrastructure has arguably the most established brand image in the health and beauty industry, with a dominant market share (traditionally leading a number of different product categories), the company’s individual websites lacked standard back-end infrastructure and services, impacting the overall consumer experience.

You won’t hear about such topics in the news as often as an enterprise’s ad campaigns or financial reports, but that doesn’t mean customer service strategies don’t heavily impact the topics you will hear about.

For example, until recently L’Oréal Australia had no live chat function, a slow shipping policy and an  outdated website appearance. That hindered the customer service experience, said Matthijs van der Putten, L’Oréal Australia CMO. 

So what’d they do? Instead of doubling down on digital marketing investments or hiring more employees, they took their CX struggles to the contact center.

In hope of improving consumer engagement and addressing product concerns (such as delivery times), they adopted a back-end platform for customer service agents to communicate with consumers through an untraditional approach to live chat. 

L’Oréal Australia

L’Oréal Australia, (who has been struggling in the customer experience aspect) is much smaller than the company’s U.S., Europe and China divisions - in terms of both e-commerce sales and overall sales. As of 2018, 11% of L’Oréal Australia sales were online. The company is aiming to boost that to 20% by 2028, according to the Financial Review.

Read More: Increasing ROI With Omnichannel Chatbots (Sponsored By Salesforce)

“My challenge is that the e-commerce market in Australia is growing rapidly, and my objective is to increase the number of live chats and make our team more proactive in creating them,” said van der Putten.“ I do see the conversion results when [customers] are using it.”

Because it’s hard not to.

According to Glossy, here’s what it looks like:

“The back-end customer service program, called Inside, uses a digital rendering of a store where online customers are represented as digital avatars to customer service representatives. That way, a representative can better view where a customer is in their shopping journey and how they are feeling, before even trying to engage in a conversation. For example, if the avatar has a suitcase, it means the customer is visiting the Australian website from another country. If the avatar is blue, it’s their first visit. Yellow is for a return visit, and green means the customer is logged into an account. Avatars also have faces, which can quickly show representatives whether a customer appears angry or happy, based on their activity on the website.”

For example, if a customer is logged in on the website and appears to have ordered a product a week ago, the customer service agent can begin a conversation (via a pop-up on a customer’s screen) asking how they can help.

According to Glossy, since Lancôme and Kiehl’s first implemented virtual customer service in 2018, both L’Oréal owned brands have seen a 430% increase in purchase rate when a customer chats with a representative. And 21% of customers using the tool make a purchase.

Behind the numbers

The numbers are not surprising, because the brand is incorporating elements of personality so rarely seen in the stereotypically robotic digital world. This elevated experience proves that technology, when done right, can actually foster human connections.

E-commerce may be cutting into brick-and-mortar sales, but it doesn't have to eliminate traditional retail's emphasis on connections.

According to our surveys, the vast majority of customer experience experts admit to struggling with properly using AI (primarily chatbot implementation), which includes achieving a 360-degree of their customers, measuring customer intent through different mediums, and mapping customer journeys, all examples of how automation, when done right, can help foster human connections between brands and customers to enhance the consumer experience.

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As Forbes Councils memeber and CEO of the CX Journey, Annette Franz recently told me, "When journey mapping is viewed (and used) not only as the process that is but also, especially, as the backbone of customer experience management, it becomes an ongoing practice and process in your organization." Incorporating this concept into your automation intitiatives and real-time consumer journey mapping is the first place to start.

In L’Oréal’s case, it helps that avatars are prioritized based on urgency of needed assistance: Through consumer behavioral data and AI journey mapping, they show agents which customers need assistance most (in real time with an unhappy face) and those more likely to convert, such as an avatar lingering near a virtual checkout counter. The representative can begin a conversation with more tailored phrases, such as, “Hi, I’m a skin-care specialist,” rather than a generic, “Do you need help?”

As seen in a recent CCW Digital report, sponsored by Salesforce, more than 71% of consumers are open to using chat technology to combat the struggles mentioned earlier. Yet only 9% currently trust chatbots to solve meaningful issues in the customer journey. 

Read More: Instilling Social Customer Experience In Your Marketing Strategy

Additionally, a 136% growth rate in chat is expected throughout 2020. 

In other words, service oriented brands are investing in chat technology (hence the 136% growth rate). Consumers are willing to use them (hence the 71%). But the traditional approach to the technology’s implementation isn’t providing brands an ROI (as only 9% of consumers are trusting them). 

L’Oréal is changing this reality by using chat automation for what chat automation is meant for, handling mundane tasks in the customer journey (i.e. routing customers to the right employees) so humans can focus on human skills (i.e. skincare recommendations).