Revlon rises with SAP - the digital transformation of the cosmetics sector accelerates

Stuart Lauchlan Profile picture for user slauchlan August 10, 2021
A digital makeover with RISE with SAP for Revlon, just part of a wider transformation wave in the cosmetics industry,


Cosmetics giant Revlon is signing up to use RISE with SAP to accelerate its digital infrastructure transformation and support its e-commerce operations. Or as Revlon CIO Jose Urquijo puts it:

RISE with SAP provides Revlon with numerous opportunities to support our continued digital acceleration through modernizing our core back-office infrastructure and applications while reducing our total cost of ownership. Additionally, RISE with SAP will enable increased flexibility and agility in support of our Revlon Global Growth Accelerator program.

Back in February Debra Perelman, Revlon’s President and Chief Executive Officer, talked up the importance of the firm’s e-commerce efforts:

Our net sales from e-commerce represent approximately 13% of our total net sales and grew 5% versus prior year quarter…Both North America and EMEA regions had double-digit e-commerce growth as did our business, which grew 25% over prior year quarter…We continue to focus on driving growth in this channel including across our own platforms, peer players and retailer dot com partners.

Revlon’s focus on digital platforms and expansion is not unique to the cosmetics and beauty markets, as diginomica has noted across the years. The pandemic’s offline shop closures and enforced ‘house arrest’ for consumers gave a useful boost to digital take-up as buyers used virtual testing and makeovers in the absence of being able to sit in a beautician’s chair in-store.

As physical outlets have re-opened in the Vaccine Economy - albeit at varying paces around the world - it might be expected that some of this online activity might slow down. After all, trying on make-up is a shopping activity where the physical element is a key part of the overall customer experience, regardless of how sophisticated virtual alternatives might be.

Back to business

Is that the case? Perhaps there are some signs of an easing off of the pace of digital expansion. Take e.l.f Cosmetics as a case in point, where digital channels drove 13% of overall business in its recent Q1, down from 19% a year ago, but crucially still up on the pre-pandemic 8% of two years past.

Digital remains a critical part of the mix, as CEO Tarang Amin noted when he observed:

On, over 50% of our shoppers in Q1 renew consumers. Our new consumers continue to over index and skincare and signups for our Beauty Squad loyalty program. Beauty Squad now has nearly 2.6 million members, up over 30% year-over-year. Our loyalty members are a highly valuable part of our digital ecosystem. They have higher order values, purchase more frequently, have stronger retention rates, and drive almost 70% of our sales on

He added:

e.l.f. Cosmetics has nearly 12 million followers across our digital ecosystem, growing double-digits year-over-year…Our model is based on the data that we get off of our ecommerce site. Most of our innovation goes online first. We get really great data not only in sales, but also customer reviews level of engagement behind those.

So, we have a good model, really stemming back, all the way back to 17 years ago, starting as a digital business where we were able to take those insights, work with our customers, and really proactively decide which items we're going to delete and replace them with, and that productivity model has served us well over the years.

Over at L’Oréal, the company website declares:

We’re a digital first company. That enables us to reshape our relationships with you through dynamic, Beauty Tech innovations. Whether it’s online consultations, speed in bringing new products to market, or a purchase through voice technology, our aim is to create a fully integrated physical and digital experience, based on your expectations.

Leaving aside the hyperbole, the firm has some impressive stats to back up its claims:

  • +1.2 billion visits to  L’Oréal websites.
  • +285 million followers on its social channels.
  • 33k L'Oréal employees up-skilled in digital.
  • 20 digital services in 71 countries and across 21 brands.

The company continues to strike innovative tech-centric new partnerships, such as its tie-up with Clue, the period tracking app with 12 million users in 190 countries, to deepen knowledge on the relationship between skin health and the menstrual cycle, or the integration between L’Oreal’s Augmented Reality (AR) arm, ModiFace and Facebook’s own Spark AR platform to  bring AR-powered makeup try-ons to shopping on Instagram. 

With e-commerce sales up 24% for the first half of the current year, L’Oréal CEO  Nicolas Hieronimus, points to what he calls “the Digital Dynamic” that continues to underpin the firm’s recovery from the pandemic’s impact on the market:

[L’Oréal] can count on digital excellence to engage recruit and loyalize consumers and partners alike. Our digital activation strategies will be more and more data optimized. E-commerce is about 20% of our sales, and we are investing to be ready for when it represents 50%…We plan to bet on technology, on data, and on AI to become the leading beauty tech company.

Meanwhile at Sally Beauty Holdings, CEO Chris Brickman is focusing on building out the firm’s omni-channel experience as a growth driver. For its most recent fiscal quarter, e-commerce accounted for $71 million or 7% of total revenues. This is just the start, he declared:

As we continue to scale and optimize a full suite of omni-channel services for our customers, we see e-commerce growing to 15% of sales in the coming years…Sally US and Canada had 43% of e-commerce sales fulfilled by our stores. And BOPIS continues to gain traction and comprised 22% of Sally US and Canada e-commerce sales in the quarter. That's up from 20% in Q2 and 11% in Q1.

There has been a levelling off of digital growth as the Vaccine Economy opens up, but this isn’t seen as significant, insists Brickman:

[Growth] didn't track back to a pre-pandemic level. We're still well above pre-pandemic levels. We just didn't grow sequentially….The reality is…when we launched a lot of the new digital service models during the pandemic, we launched a minimum viable products to rush them in the market and we've been really focused on both improving the customer experience and improving the margin delivery and profitability of e-com. We feel like we've made a lot of headwinds on that and more work to go obviously.

So we do think we'll get back to growth. And that's why we believe that over the next three years, we can kind of double the penetration of e-com. But over the last few quarters, we've spent a lot of time really improving the customer experience and getting profitability right and that's part of the reason why we're not seeing the sequential growth right now.

My take

An interesting tranche of the retail sector to keep an eye on as the digital makeover continues over the coming years. As noted above, that ‘physical experience’ aspect of beauty and cosmetics shopping is a critical part of the omni-channel experience, so achieving the right foundation and blending online and offline is going to be vital to ongoing transformation success.

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