How artificial intelligence has revolutionized the cosmetics market

How artificial intelligence has revolutionized the cosmetics market

What does this mean? It means that consumers’ way of purchasing is changing: now it is mainly via the Internet. And although there has been an upward trend for years, the coronavirus outbreak has given it a boost like never before. According to the Spanish newspaper El Confidencial, Internet sales in Spain rose by 36% during the pandemic. Although this is a temporary peak, it is true that brands that were already prepared for this digital boom have found it easier to stand out from the rest.

And by “prepared” we don’t just mean having their online shops ready, but turning the Internet purchasing experience into a unique, special procedure. And how have the main beauty brands achieved such a thing?  By means of artificial intelligence. 

If a consumer prefers to buy via the Internet, it is obvious there will be some obstacles. For example, they won’t get the personalized service and will not be able to try on make-up products. However, with AI this could change: there are filters to put the customer’s preferred lipstick colour onto their lips, and virtual assistants that can recommend a routine of products by analyzing the consumer’s skin.

Would you like to discover the five types of technology that have revolutionized the cosmetics market and had an impact on brands? Then keep reading.

1. The app that enables you to try out all of Sephora’s products at home

In 2016, Sephora launched a mobile application called Sephora Virtual Artist so their customers could try out all of the shop’s products without leaving home. The app uses augmented reality to capture a person’s face, detect their eyes, cheeks and mouth, and thereby put “make-up” on the user with the product of their choice.

According to the make-up brand, over 200 million shades have been tried using Virtual Artist since it was launched.

As we can see in the video, thanks to Sephora Virtual Artist we can upload an image of ourselves and experiment with different make-up shades, brands and products.

Given that there are 23.6% of consumers that do not purchase online because they can’t touch and experiment with the product, these types of AI may break down that barrier and encourage online sales (Ontsi studio).

While it is true that trying on lipstick or make-up products using this app is not entirely accurate, consumers don’t mind too much. In fact, Maghan McDowell, the innovation editor at Vogue Business, agrees that the apps are not “100% accurate”, but she says that the customers “find them useful”. She also adds that consumers end up purchasing via these apps.

2. Sephora’s machine learning to recommend the best products for users

And there’s more: Sephora has not stopped at just virtual make-up. The company has also made a commitment to machine learning, a form of artificial intelligence that detects users’ patterns and behaviour and acts on them. By using this technology, they multiplied their return on investment by six, as shown in the summary of the event.

The report carried out by the company explains how this machine learning works, which was tested in 82 live experiments. It’s simple: depending on how the user behaves in the website, they are shown articles recently visited or a sample of the most popular products. Why? Well, because users normally leave a website without buying anything when they reach a “dead end”; in other words, when they have browsed the site and still not been shown what they are looking for.

The strategy led to an increase in click-through-rate of more than 4%, which ended up giving direct income of over 6.50 USD for each dollar spent on investment in this AI. In other words, the ROI was multiplied by 6.

“Personalization is at the core of our eCommerce strategy,” explained Alexis Horowtiz-Burdick, director general of the company at the time. “[This technology] allows us to craft truly customized shopping experiences across all touch points.” Today, Sephora uses this technology in all of its online stores—and it is no surprise given the increase in turnover and results.

3. Try different hair dyes and styles with STYLE MY HAIR 3D by L’Oréal

L’Oréal said in 2018 that it no longer wanted to be the number one beauty firm in the world, but “the number one beauty tech company”. They weren’t kidding. The company has developed various AIs that enable everything from recognition of the exact shade of skin to dying one’s hair different colours thanks to augmented reality.

“Investing in innovation has enabled us to develop advanced cosmetics technologies in 3D and colour diagnosis services, using exclusive knowledge to track facial and colour characteristics,” explained Guillaume Sonolet, Chief Marketing Officer for L’Oréal Spain, to the BBC.

Style My Hair 3D uses facial recognition AI to “dye” hair different colours and shows you different hairstyles. The consumer can thus “try” the hair they most like. They have even partnered with beauty salons in different countries so the consumer can go with the results of their experiments to cut and dye their hair just as the IA has shown them.

According to L’Oréal’s 2020 annual report, “L’Oréal’s digital transformation has enabled the group to build new relationships based on innovation, relevance, transparency and trust with both consumers and employees”. Furthermore, this commitment enabled them to comfortably overcome the health crisis: “When brick-and-mortar stores had to close because of public health lockdowns, L’Oréal had all the tools necessary to maintain contact with its consumers and continue selling its products.  [The company was able to] capitalize on innovation and eCommerce, which grew over 60% to account for nearly 27% of sales in 2020”. 

This data demonstrates that investment in AI and new technologies can prepare cosmetics companies to prevail even in the worst scenarios.

4. The AI to find your perfect combination of make-up foundation shades by L’Oréal.

Continuing with L’Oréal’s example and their commitment to artificial intelligence, after acquiring the tech company ModiFace, in 2018 they launched “Mirror, mirror, on the Wall”. This artificial intelligence tool uses an image or a photo to detect the user’s precise shade of skin. Thus, it can recommend the exact shade of foundation make-up for them. And it works! According to L’Oréal, the tool achieved 98.3% accuracy on its launch.

The company’s gamble on ModiFace, a purely technological company that had worked with other brands in the cosmetics sector, shows that L’Oréal is serious about its aim to be at the vanguard of innovation in beauty. In fact, the brand’s director general, Lubomira Rochet, said on acquiring ModiFace, “It’s the first time L’Oréal has acquired a tech company, a non-beauty brand. So it’s really important from a strategic point of view. And what we have in mind with ModiFace is to create the core of our digital research and development.”

Specifically, the aim with Mirror, Mirror, on the Wall was also to customize the products for the clients as much as possible. L’Oréal is aware that finding the ideal shade of make-up is difficult, so in this way they nipped the problem in the bud. According to the market research company Mintel, nearly half of consumers like the idea of a beauty product that is personalized especially for them, and a third believe that such products give better results. Giuve Balooch, global vice president of the L’Oréal Technology Incubator, explained in an interview with Xataka that “the future is for everybody to have the perfect product; that should be and is the path of no-return.”

5. The website that creates your personalized foundation make-up

Going a step further, the company Dcypher has created an AI that not only enables the user’s skin shade to be analyzed, but which creates a unique make-up code.  The code thus becomes an entirely personalized formula that is sent to the customer’s home.

Dcypher does not stop at the foundation; artificial intelligence technology can create personalized products for a person’s exact colour of lips, skin or hair care. The company is entirely online and all of the transactions are carried out via the Internet.

The most curious aspect is that it is a young company, founded in 2020 by Adam and Claire Triantis. Nevertheless, they have achieved enviable financing. In September 2020 they reached 280,000 pounds sterling of investment thanks to a crowdfunding campaign. Moreover, the newspapers talking about the brand describe it as the future of beauty.

Another aspect worth noting is that by using technology to create a make-up foundation for each and every woman, Dcypher is supporting diversity in the beauty industry. Taking into account that inclusiveness today is one of the fundamental pillars in any marketing strategy in the fashion world, that is a great advantage.

6. A personal assistant for skin care by Olay

One of the benefits of going to a shop is to get advice from the salespeople to choose one product or another. This is especially true if we don’t know our shade of skin or how we should care for it. With this in mind, Olay created a recommendation system based on augmented reality that detects the age of the user’s skin, their most problematic zones, and with this information it creates a list of “perfect” products for the user.

This advisor is the perfect solution for people who are looking for ideas about what types of products to buy. They human eye can be fooled, but not a machine’s. Who wouldn’t like precise technology to know exactly what kind of routine to follow to get the perfect skin?

Thanks to this AI, Olay doubled its sales conversion in July 2019, as it announced in an article in Venture Beat: “Olay, the popular skin care brand, started using AI to make recommendations to its millions of users almost two years ago,  and says it has doubled the company’s sales conversion rate overall [thanks to this].” Furthermore, in the article they point out that “Skin Advisor also increased the average basket size, for example increasing it by 40% in China alone, and cut the bounce rate of visitors to a third of what it had been previously.”

Conclusions

Beauty brands are making a strong commitment to innovation and artificial intelligence. New consumer trends, the growth in eCommerce and an increase in demand for more personalized products are all obstacles that can be overcome if beauty companies learn to adapt the AIs to their modus operandi.

Thanks to artificial intelligence, brands can set themselves apart from the competition and make the most of opportunities that remain practically unexplored in the sector. Being able to put on make-up in a virtual environment, to try different haircuts or to have an AI tell us the age of our skin and how to care for it are all just the tip of the iceberg.