By Bruce E. Teitelbaum and Julie R. Bartholomew, M.D.
For more than a year now, L’Oréal has publically been focused on the power of personalization. In this blog post, we’ll explore just how far L’Oréal can go in the area of personalization before crossing over into RPG x IMX’s patent portfolio.
We believe this is a great way to illustrate the value of the patent portfolio.
BACKGROUND ON L’ORÉAL’S THREE PILLARS OF BEAUTY TECHNOLOGY
In November 2016, Audrey Latimer wrote in a Cosmetics and Toiletries article, L’Oréal Focuses on Custom Cosmetics, Wearables and Try-on Technologies:
“Guive Balooch, Ph.D., gave a presentation on the effects that technology will have not only on the chemists working in the lab, but the entire beauty industry … He touched on three ‘pillars of beauty technology’ that he and his team are focused on at L’Oréal: personalization, coaching and virtual try-ons.
- Personalization: Brands need to create custom products for consumers’ needs.
- Coaching: Brands need to explore the use of smart tools, sensors and data to adapt to consumer needs.
- Virtual try-ons: Brands need to utilize consumers’ smartphones and devices for quick, easy, try-on in the palm of their hands.”
The article goes on to discuss L’Oréal’s shade-matching personalization. Specifically, it says:
“This new system diagnoses the skin, creates the correct formula for it, puts the product into the formula blender and packages the final product in a customizable and personal way. The system performs shade-matching using a spectrometer and only takes a few minutes to find the correct foundation shade for any skin tone.”
These three pillars of beauty technology were further reinforced on October 12th, 2017 during the CEW Connected Consumer Conference keynote speech by Frédéric Rozé, President and CEO of L’Oréal USA.
INSIGHTS ON L’ORÉAL’S QUEST FOR PERSONALIZATION
For context, L’Oréal had a total 2016 revenue of roughly $32 billion (25.84 billion euros). The article reports that L’Oréal spent 12 months of experiments in order to create a technology that allows women to find their ideal shade of foundation. This follows a NY Times report that L’Oréal spent $100 million to build the world’s largest hair-color factory, in Mexico, and reportedly spent another $150 million acquiring early-stage personalization patents.
What is clear is that L’Oréal sees tremendous growth opportunities in customization and personalization. L’Oréal has even piloted an early-stage product-level personalization with Le Teint Particular (currently available in 19 Nordstrom locations). While directionally, L’Oréal is headed in the right direction, we believe that where this technology falls short is that it takes the process out of the hands of the customer and is completely driven by a lengthy consultation.
Specifically, a technician is required in order to create a customized and personalized product for a customer. Even the mixing process requires an additional step for a technician to complete the task. We applaud this early entry into the world of product personalization, as it gives us an opportunity to contrast what can be accomplished by having access to our broad patent portfolio.
The RPG x IMX portfolio invites the customer into the NEXT generation of the retail experience; one that is driven entirely by the customer empowered by her own data. Assistance may be present if desired, but it is not a requirement, and therefore the platform will be substantially more scalable for both the retailer and the manufacturer.
Leveraging our patent portfolio, customers may privately explore customization in all categories, and hyper-personalize skincare, color cosmetics, shampoo and every other health and beauty product that she desires. The ultimate power remains at the consumer’s fingertips where it belongs.
So, we feel that the miss here for L’Oréal and its retail partners is not delivering the entire end-to-end in-store customer experience driven by the customer’s needs. With the launch of Amazon Go, customers appear to be open to reimagining the in-store experience – certainly without checkout lines and cashiers.
In 2018, immediacy reigns supreme. Consumers will initially tolerate a “do it for me” hands-on approach in order to receive the perfect color make-up or hair color product. That is, until this customer comes across a retailer who empowers them to formulate a totally customized product while they wait.
Given two options – self-serve immediacy or reliance on the availability of a trained retail employee, which approach do you think will ultimately win the day?
THE PATENT PORTFOLIO MAKES THE DIFFERENCE
Yes, of course we’re biased. RPG and IMX have joined forces because we believe that together, RPG x IMX’s patent portfolio and decades of in-store retail excellence will disrupt the $438 billion global beauty industry.
This is why we set the minimum bid for this patent portfolio at $500 million. We hired an independent third party consultancy who took an extremely conservative view and ended up well north of this minimum bid. We’d be happy to share this research with you should you be interested in receiving our due diligence package.
If you would like an opportunity to participate in this process, please email email@example.com or call (212) 246-3780.