With stores and salons closed, Coty puts a new face on innovation

From playing with augmented reality (AR) to increasing investment in direct-to-consumer, Covid-19 has done more to accelerate Coty’s digital strategy than any chief marketing officer or chief digital officer ever could, says its senior vice-president of digital transformation. When Covid-19 struck, hundreds of thousands of brands – from Heinz to Ford – clamoured to create digital experiences. Many had to do so from scratch, inking fresh deals with vendors and tech partners to quickly deliver content, e-commerce and social media solutions that met the needs of their newly locked-down customers.Coty, however, was ahead of the curve. Months before governments sounded the alarm bell, the beauty giant’s Wella Professionals haircare brand joined electronic behemoths such as Samsung and Hyundai at CES in Las Vegas to unveil its latest technology.Among the reveals was a ‘smart mirror’ that works to enhance the hair colouring experience from consultation through to aftercare with live AR hair dye try on, facial recognition that enables the retrieval of past looks and 360-degree video capture to view the hair at every angle.Wella also launched Colour DJ, which it claims is the world’s first in-salon device for stylists to design and produce ultra-personalized Color Masks digitally. With over 60 billion colour combinations possible, in addition to personalised levels of conditioning properties and fragrance, the tool is designed to let salon clients walk away with a bespoke, take-home product completely tailored to their needs.“Initially we saw that as a flagship experience,” explains Coty’s senior vice-president of digital transformation Chris Chesebro, who is charged with advancing the brand’s technology efforts across B2C brands like Covergirl and Max Factor as well as its professional salon offerings.“They were meant to be kind of thing you’d only see in the nicest salon on the high street. But, because so many salons were closed during the first wave of lockdown – and are continuing to shutter amid the second wave in certain markets – we’ve pivoted that technology to be both a flagship experience and mobile-first experience.”The advertiser already had the tech in place and was quickly able to “pivot” to meet customers’ demands, making small tweaks that made a big difference.A ‘backstage’ approach to AR AR is undoubtedly driving results for Coty. Though the company continued to experience headwinds from the Covid-19 pandemic, its most recent financials, published last week, easily cleared expectations. The business posted a surprise quarterly profit as demand for its beauty products and fragrances recovered from lockdown lows and the cosmetics maker kept a tight lid on costs, sending its shares 17% higher in premarket trading.In the past few months, the cosmetics giant has partnered with Snapchat to develop in-store lenses that make it easier for customers in the Middle East and Africa to ‘try on’ products from brands such as Bourjois, Max Factor and Rimmel, which heavily rely on selling in physical stores where sampling is currently prohibited. The experience has seen conversion rates soar, with 62% of those who used the AR lenses ended up buying a product.Though Coty’s agile approach to innovation and experiments in AR are yielding fruit, for now at least Chesebro is firm that where other brands (like rival L’Oréal) have made big acquisitions in the space and opened up to third parties, Coty is taking a more “backstage” approach to ensure it’s delivering real value.“We want to enhance the experience,” he says, using the example that for a hairdresser and a client discerning the difference between “a little bit shorter” or “a little bit lighter” can be very difficult.“If we’re able to use AR or AI to help narrow the gap between a couple of inches shorter or a shade lighter, that’s going to add real value to the interaction between the hairdresser and the client. So, right now, that’s where we’re focusing.”The Kylie Cosmetics owner has also been toying with “photorealistic” avatars as a way of showing customers what their new hair style will look like.“Services like this are becoming the new table stakes. The ability to ask questions on a website and get an answer immediately the ability, or try before you buy or get personalised recommendations are the new baseline requirements for consumers. So it's important that we we accelerate them as much as possible,” Chesebro adds.Smoother, sleeker DTCAccording to data from Ascential’s research and data arm Edge, digital sales made in health and beauty worldwide are set to rise to 16.5% and will surge to 23.3% by 2025.To grab a share of the cosmetics e-commerce boom, Coty has been ramping up investments in its own digital platform, spend which has seen the company double its online penetration as a percentage of overall sales in the first quarter.“The amount of consumption and increase in our e-commerce division has been absolutely massive,” says Chesebro. “We’ve more than doubled our growth rates and quite frankly, we left some stuff on the table. We’re seeing consistent results month over month, even after lockdown eased off in Europe over the summer.”As a result, Coty is “doubling down” on digital selling to ensure e-commerce is one of its biggest channels.One brand reaping the benefit of this is hairstyling brand GHD, where Coty is taking a slow, “tactical” approach to building out its direct selling platforms.When demand for DIY beauty products increased significantly in May and early June, Coty launched The Home Beauty Edit in the UK – a DTC service which delivers at-home product sets directly to consumers’ doors within two working days from making their order. In recent weeks, Coty has added two additions to its leadership team, one of which includes Jean-Denis Mariani to the newly created role of chief digital officer.So, it seems even more transformation is afoot for the 116-year-old beauty giant.Chris Chesebro spoke to trends editor Rebecca Stewart as part of The Drum's Digital Summit. You can watch the full session here.