Case Study: Proximo Plugs a $930,000 Leak for L’Oreal

Client: L’Oréal USA, Luxury Products Division, the world's leading beauty company

Background:The company employs over 8,000 beauty consultants that work at more than 2,000 retail cosmetics counters across the country. L’Oréal and the individual retailer split the payment of wages to these beauty consultants.

Problem: Due to an inadequate record-keeping system, L’Oréal was paying vastly more than their share of the consultants’ wages.

Assessment: L’Oréal required a highly customized system to solve its unique business problem. Before building such a system, Proximo conducted an in-depth assessment of L’Oréal’s needs in order to understand:

  • The exact terms of L’Oréal’s complex wage-splitting relationship with its retailers

  • How the system would integrate with L’Oréal’s other databases

  • The ways in which the system would have to be flexible in order to accommodate future changes and growth

Solution: Upon completion of the assessment, Proximo designed and built a record-keeping system that allows L’Oréal to instantly see whether retailers are correctly billing them for the wages of beauty consultants. The system allows L’Oréal to check for billing discrepancies in a multitude of ways, including by store, region, manager and nationwide search.

Result: In the year prior to the system’s introduction, L’Oréal’s retailers overbilled them by $930,000. Thanks to the system that Proximo built, disproportionate wage expenditures have been reduced to nearly zero.

David Ricciardi