L'Oréal Luxe drives sales growth for D2C website by optimizing Marketing Mix

About the client

L’Oréal Luxe delivers a unique product and brand experience to its consumers. With a diverse portfolio of 26 brands, they cater to the needs of all consumer tribes, across various price levels.

The company’s portfolio consists of 26 exceptional brands, including 17 global ones such as Lancôme, Yves Saint Laurent, and Giorgio Armani. 

L’Oréal Luxe is known for its commitment to research and innovation and has been at the forefront of developments in the beauty industry for over a century. 

L’Oreal Luxe Partners SegmentStream

The partnership with SegmentStream started with one brand, Lancôme Mexico, and after the successful pilot, it is now being rolled out to other L’Oréal brands and markets.

The challenges: 

The primary focus for Lancôme Mexico was to increase sales on their Direct-to-Consumer (D2C) website. To achieve this goal, the team was looking to solve three core challenges.

• Maximise D2C website media efficiency through optimal Marketing Mix 

People who are looking to buy luxury cosmetic products, such as Lancôme, often visit the website multiple times before making a purchase, often using multiple devices and browsers in their customer journeys.

Due to the long and complex path to a conversion, it becomes challenging to accurately measure how different marketing channels and campaigns actually contribute to the total number of sales and revenue. 

This is especially an issue when measuring the performance of prospecting campaigns that are designed to drive initial awareness and not immediate sales. 

While upper-funnel marketing activities have a serious contribution to future sales, they often do not receive any sales credit. Due to multiple modern-day cookie tracking restrictions and complex, multi-device customer journeys, in most cases, the actual conversion will not be attributed to the initial traffic source. 

Without clear visibility into the real sales impact of each media traffic source, it is impossible to understand the true Return on Ad Spend of each channel and campaign and make timely and efficient budget allocation decisions to achieve the optimal Marketing Mix.

To maximise media efficiency on the D2C website, the Lancôme Mexico team had to gain insights into which paid traffic sources drive value to the business, even when they do not result in immediate conversions. 

• Gain more agility in day-to-day media team operations

To ensure optimal results from digital marketing efforts, it is crucial to prioritise high-value marketing activities while automating routine tasks. Unfortunately, marketers often spend too much time generating reports and analysing data to determine the effectiveness of their paid media campaigns, especially when managing multiple advertising platforms and numerous product promotions.

The team at Lancôme experienced a similar challenge, as their weekly marketing reporting and media performance analysis were time-consuming. To overcome these obstacles, they had to automate their reporting processes to quickly obtain insights into media performance, with the goal of freeing up resources for their e-commerce and media team.

By redirecting the saved time towards more productive activities, my ecommerce and digital team could focus on strategic marketing projects, such as developing a better targeting strategy and value proposition for customers. Therefore, it was crucial to achieve agility in day-to-day operations and gain real-time visibility into media mix performance.

— Erendira Garibay, Digital Director L’Oreal Luxe Mexico 

To overcome these challenges and generate more qualified prospects, the team at Lancôme Mexico decided to test an innovative solution called SegmentStream.

SegmentStream — solution overview:

SegmentStream is a Marketing Mix Optimization platformthat uses the power of AI and first-party data to achieve accurate marketing measurement and efficient budget allocation.

Why is the SegmentStream approach unique?

Traditionally, marketing measurement solutions relied on tracking the actual conversion and then attributed the value from this conversion to one or more traffic sources within a customer journey. 

However, this retrospective approach to marketing attribution is essentially broken. Due to modern-day cookie restrictions, cross-device/browser interactions, and short attribution windows, it is no longer able to track a complete user’s path to a conversion. As a result, both analytics and ad platforms are no longer able to attribute conversions and value properly.

The aim of SegmentStream is to discover which traffic sources drive the most incremental value to the business, even when they do not result in directly attributed sales.  

Unlike such solutions, SegmentStream’s approach relies on proprietary Machine Learning algorithms to evaluate each marketing activity and measure its incremental contribution to total sales.

By using SegmentStream, marketers can gain better visibility into the true value of all paid media traffic sources, marketers can make correct, timely, and confident budget allocation decisions to ensure the optimal Marketing Mix and achieve the highest total ROI from the overall advertising spend.

Accurate evaluation of all paid media traffic sources with SegmentStream

Benefits and advantages for Lancôme Mexico

SegmentStream platform provided Lancôme Mexico with a comprehensive overview of their campaigns’ performance, which included information about the actual incremental value of each marketing channel and campaign. 

The platform insights enabled Lancôme Mexico with a better understanding of how different marketing sources contribute to the total number of purchases, even if the actual conversion will not be attributed directly. 

With this powerful knowledge, the Lancôme Mexico team could make informed budget allocation decisions to optimise their marketing mix and achieve the best return on investment (ROI).

It is also worth noting that the entire reporting was fully automated which means that the e-commerce & media team could now allocate more time to strategic projects, rather than manual data crunching & reporting. 

Business results:

1. Improved agility and overall visibility into Media Mix performance 

The Lancôme’s Mexico team utilised SegmentStream’s capabilities to enhance the agility of their agency and media teams’ operations through automation and real-time access to the most important marketing data. 

By implementing SegmentStream’s platform, Lancôme’s e-commerce and media teams were able to concentrate on business strategy and direction. With it, Lancôme’s team gained more comprehensive and detailed insights into their marketing activities’ performance, enabling them to refocus their efforts more effectively. 

As a result, the team identified the optimal marketing mix and improved their value proposition to customers, driving business growth for their D2C website.

2. Data-driven budget reallocation resulted in 41% ROAS improvement across the whole Marketing Mix

By gaining visibility into the true incremental impact of each paid media channel and campaign, the Lancôme Mexico team was finally able to uncover the actual Return of Ad Spend across their entire digital marketing mix.

Before using SegmentStream, Prospecting campaigns on Facebook were heavily undervalued — they generated a small number of attributed conversions compared to Google Search, which has similar ad spend but resulted in much more direct sales. 

However, SegmentStream revealed that Facebook actually had a similar contribution to total sales as Google Search, which justified its investment and even opened an opportunity to scale.

— Jose Avila, Media Manager L’Oreal Luxe Mexico

Thanks to SegmentStream insights, the Lancôme Mexico team reallocated more budget towards Facebook and was able to get +8% more Purchases along with -28% CPA and +41% ROAS improvement across the whole Marketing Mix.

Customer testimonial:

For a while, we have been searching for the right solution to gain insights into our media mix performance, as we understood that marketing attribution in a traditional way became challenging due to modern limitations in customer journey tracking.

We found SegmentStream’s approach to marketing measurement to be innovative and unique. It was designed to work in a cookieless world. We liked the concept of evaluating marketing traffic source using Machine Learning. It meant that we could finally gain visibility into the actual sales impact of our paid media traffic sources, and understand their incremental contribution to our bottom line.

We decided to launch a pilot in Lancôme Mexico, and we’re glad that we did it. SegmentStream proved to be an effective tool in fueling the e-commerce success of the Lancôme Mexico D2C website.

We were able to improve the performance of our digital ads, make informed budget allocation decisions, and achieve a positive uplift in sales by finding new revenue opportunities. Moreover, SegmentStream helped us give back precious time to our media and e-commerce team, and made our day-to-day operations much more agile.

We would like to thank the team for helping us during our journey. This project’s success unlocked new opportunities for the brand in the market, and now we are scaling it to other luxury brands in our market and region. We are certain this project will positively impact our business activation.

— Perla Patricia Aragon, Chief Digital Officer, L’Oréal Luxe Latin America