By Priya W. - April 7th, 2015

Listening to their customers has become key to L'Oreal's innovation strategy.

Highly glamorous yet highly fickle, the beauty and fashion industry is one of the most difficult for forecasting trends and product demands. What’s “in” and what’s “out” can change in an instant. For managers deciding on which product lines to move forward with or put on hold, a decision like this could end up costing a company thousands—if not millions of dollars!
However, with high risk comes the potential for high reward. Rewards that global beauty brand L’Oreal have begun to tap into with their use of online search and social media tools to drive innovation within their company.

How it all started…

Back in 2011, the company was at a crossroads: how could they innovate within the hair color market? With the emergence of three upcoming hair colour trends—ombre, tie-dye, and splat—the company was faced with the hard task of deciphering which, if any, of these trends would grow into market staples.
Normally, companies looking to validate a trend or idea would turn to traditional research methods: conducting consumer surveys, piloting in-depth focus groups, or holding interviews. However, L’Oreal took a different route. The company broke tradition by turning to the internet to better understand consumer attitudes and beliefs about the three emerging trends.

The Search Process

Through a partnership with Google, the company was able to quantify the most popular market trends by looking at top search results over a specific period of time. After identifying the trend, the company moved to other platforms to gather richer, more detailed data on how consumers felt about the trend qualitatively. The company scoured YouTube to find consumer-generated content on the various hair color trends, and by doing so, was able to gain insight into activities they wouldn’t have previously seen. They identified the kinds of materials and tools consumers were using to create the desired hair colour effects, as well as the slew of problems they encountered in doing so. In this way, L’Oreal benefited from not only identifying the trends consumers were following most, but also gaining a better understanding of the issues potential customers faced—which they could solve with help from the company’s R&D department. In addition, the process of watching these videos was helpful in identifying major thought leaders in the market who could act as influencers and help sell and share new products with their followers.

From information to innovation

After a couple months of detailed qualitative and quantitative online research, the company decided to move forward with the ombre hair color trend, and developed L’Oreal Feria Wild Ombre. Since its launch within the market, the product has been highly successful and drew in new users (many of which who had never used hair colour before), helping the company widen their overall target segment.
Clearly, online search tools are both effective and necessary for gathering consumer insights and information that can lead to new product development and drive innovation within a company.

How you can use this information? 

Now for the all-important question, how can you take L’Oreal’s new product development and research strategy and implement it within your own company? 
For one, make online search your new best friend. 
Step one: start with a general quantitative information grab to identify top trends within your respective field. Try “” to find key terms that are being searched and the respective locations and times where they are most prevalent. 
Note: Remember to be specific when entering search terms as one word can have multiple meanings in different locations. For example, although “ombre” is recognized as a hair colour trend in many places, it also has alternate meanings, such as a popular card game in Europe. Therefore, when you begin searching for key terms, ensure you specify the relevant category or industry associated with the term. In this case, “ombre hair” or “ombre hair color” would have done the trick!
When beginning your search for new popular trends, start with a general search of multiple key terms relevant to your industry. Following this select the 2-3 trends that consistently appear at the top of search results in various locations for a fairly stable period of time (ex. 1-3 months depending on your industry). 
Step two: Once 2-3 trends have been identified, move from a quantitative analysis to a qualitative gathering of online data. This can be done by conducting research across different platforms to find different insights on the trend you’re looking at. Examples of platforms where you may find more detailed data include: blogs, online support forums, consumer review sites, video sites (ex. YouTube, Vimeo), etc.
Once this process is done, the next step is to put the insights you’ve discovered to use! This could be through current product improvements, better customer care or new innovation—the sky is the limit!  
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