Heaptalk, Jakarta — The Future Readiness Indicator (FRI) 2024 survey by the International Institute of Management and Development (IMD) has named L’Oréal the most innovative company for its use of AI and AR, surpassing Coca-Cola and Procter and Gamble (P&G).
Through the FRI CPG 2024, IMD surveyed and ranked 24 global consumer package goods (CPG) companies. In the list, L’Oréal scored 100, securing the top position, up two places from last year. Coca-Cola (score 90.68), which was at the top last year, dropped to second place. Meanwhile, P&G (80.4), previously in second place, fell to third. Nestle (78.1) remained in fourth place. Unilever (77.28) climbed two places from the previous year to fifth place.
Howard Yu, Director of the IMD Center for Future Readiness, stated, “L’Oréal’s ability to leverage AI, omnichannel strategies, partnerships, and social listening is at a scale we have never seen before in the CPG world. Thus, in essence, L’Oréal is now a technology company selling lipstick.”
According to IMD, L’Oréal’s achievement is due to its breakthrough in combining Augmented Reality (AR) and artificial intelligence (AI) to provide product recommendations, skin diagnostics, and virtual product trials. This innovation aligns with the growing consumer demand for experiences tailored to their specific needs.
Utilizing social listening data
In more detail, the company utilizes data-driven decision-making, such as using social listening to analyze buyer habits, determine the next product line, marketing campaigns, and supply chain optimization. This approach helps the company gain deeper insights into consumer behavior, a process largely driven by subconscious processes and often missed by traditional market research.
Additionally, L’Oréal employs an omnichannel marketing strategy, strengthens partnerships, and facilitates easy shopping both online and offline. “L’Oréal’s success demonstrates that reducing production and distribution costs in the traditional way is not enough. Today’s consumers have many demands,” Yu emphasized.
The company’s innovation in utilizing technology makes it superior to competitors like Estée Lauder, Shiseido, and Revlon. Currently, Estée Lauder and Shiseido are trying to catch up by exploring the use of AI. However, their efforts have yet to match the level of personalization services offered by L’Oréal. Meanwhile, Revlon lags significantly due to limited digitalization capabilities.
Reflecting on L’Oréal’s success, Yu saw a clear correlation between a company’s success and innovation. Another example is Nestle and Diageo (a British alcoholic beverage producer), which also prioritize technology. They are ahead of companies that lag in innovation, such as Dr. Pepper (an American soft drink producer) and General Mills (an American packaged food producer).
