Beauty and Cosmetics Industry Analysis

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Beauty Creation: Trends

Key Takeaways

  • The global waterless cosmetics market is expected to reach $31 billion by 2031.
  • There is a current increase in research into marine-derived beauty ingredients. According to a study by the University of Porto in 2020, "marine-derived substances will continue to be increasingly relevant [in the beauty industry] in the coming years."


Historic beauty trends impacting current and future beauty product creation include fermentation, waterless beauty, and marine-derived ingredients. Current social movements impacting beauty product formation include the shift to AI technology and the diversity and inclusion movement.

Historic Beauty Trends Impacting Current and Future Beauty Product Creation


  • Fermented beauty products are impacting the future of cosmetics creation. Brands are incorporating fermented ingredients like soy, barley, fig, millet, and rose into their beauty and skincare products.
  • The utilization of fermented ingredients is nothing new — it has been around since the Neolithic age in foods such as yogurt, cheese, wine, sauerkraut, and more.
  • In Korea, the use of fermented ingredients in skincare dates back to the Joseon Dynasty (1392–1910).
  • Brands suggest that the fermentation process breaks down the ingredients, making it easier for the products' molecules to penetrate the skin. Additionally, "the fermentation process encourages the growth of beneficial bacteria like acetic, organic, and lactic acid, which behave as natural preservatives. These bacteria also prolong the shelf life of the products."
  • Fermented beauty products are also said to be anti-aging and gentler for sensitive skin.
  • According to board-certified dermatologist Lindsey Zubritsky, MD, FAAD, "The process of fermentation transforms sugars into bacteria, yeasts or other microorganisms, and produce different type of ingredients, and is most commonly seen in foods and beverages like wine. The process allows us to produce a more precise and purer ingredient, without the presence of undesirable byproducts that are common in standard extractions. Now, brands are able to bring the benefits of fermentation to consumers in a safe and effective way with scalable technology."
  • The fermentation trend in the creation of beauty products began in 2018/2019, when 28% of all skincare products launched contained fermented ingredients.
  • The fermentation trend also coincides with many other skincare trends, including natural/organic, microbiome, and K-beauty.
  • Sophie Thompson, founder of Sister & Co. Skin Food, states: "Fermented and probiotic ingredients are now a big thing over here [in the EU], after first getting a name for themselves in Korea."
  • Fermented ingredients are replacing traditional skincare ingredients. For example, a "new marine exopolysaccharide (EPS) produced by the fermentation of a novel Antarctic bacterium," is replacing traditional emulsifiers in skincare products.
  • Overall, the demand for fermented ingredients in all industries "is expected to top $74.5 billion by 2031; that’s a CAGR of 6.6%."
  • There has been significant investment in the fermented beauty products space, with startups like Circulove (2020) and Symbiome (2017) focusing on fermented ingredients as a differentiator.

Waterless Cosmetics

  • Waterless cosmetics, also called anhydrous beauty, are cosmetics that are created without the addition of water as an ingredient.
  • Instead, other ingredients, such as "butter, oils, waxes, and oil-soluble active ingredients" are utilized as emulsifiers.
  • Waterless beauty is not new; many historic beauty and skincare products were made with animal fats as emulsifying agents.
  • The first waterless shampoo bar was offered in 1987. According to a cosmetic chemist and research scientist at NakedPoppy, Marisa Plescia: "There have always been anhydrous products, or those ‘without water,’ such as face and body oils, balms, sticks, and powders. But over the past few years, we have seen this category expand with fresh ideas and concepts."
  • Waterless cosmetics and beauty products are currently trending as companies attempt to become more sustainable. Waterless cosmetics are generally lighter, thus easier to transport, and can decrease the companies' water footprints, while also providing the following advantages:
  • The global waterless cosmetics market is expected to reach $31 billion by 2031.
  • New entrants into the beauty market are specializing in waterless cosmetics, including Lifelong (2019) and Green+Bare (2020).
  • There has been significant patent activity in the waterless cosmetics market, notably from the market-leader L'Oreal. This is likely due to their pledge to cut water consumption by 60% by 2022.

Marine-Derived Beauty

  • There is a current increase in research into marine-derived beauty ingredients. According to a study by the University of Porto in 2020, "marine-derived substances will continue to be increasingly relevant [in the beauty industry] in the coming years."
  • Marine-derived ingredients tend to be used for their anti-aging properties as well as due to their sustainability.
  • This has been dubbed the "blue-beauty" wave. While this trend in the creation of beauty products with marine-derived ingredients is a global movement, the trend is being led by the APAC region.
  • Historically, the use of marine-based ingredients in beauty products is tied to Asian cultures. For example, pearl powder has likely been used as a skincare ingredient in China since 320 AD.
  • Major beauty brands, such as L'Oreal, have adopted the Blue Beauty trend, as is evidenced by L'Oreal Group's brand Biotherm.
  • According to MarketsandMarkets, the global marine collagen market will grow by a CAGR of 7.9% between 2021 and 2026, driven in part by the "growing demand for marine collagen in the cosmetics industry."
  • According to Data Bridge, the "marine ingredients market is expected to witness market growth at a rate of 5.71% in the forecast period of 2021 to 2028," driven in part by increased demand from the cosmetics industry.
  • Patsnap states: "marine-derived solutions may completely disrupt the materials used in beauty products, and the packaging as well. "

Social Movements Impacting Beauty Product Creation

AI Technology

  • AI technology is increasingly becoming commonplace and part of our everyday lives. An AI-summary from the AI100 report indicates that "in the coming decade, I expect that AI will play an increasingly prominent role in the lives of people everywhere. AI-infused services will become more common, and AI will become increasingly embedded in the daily lives of people across the world."
  • This is impacting the beauty industry as well. According to InsightAce Analytic, "the global Artificial Intelligence (A.I.) in Beauty and Cosmetics market size was valued at US$ 2.70 Billion in 2021, and it is expected to reach US$ 13.34 Billion in 2030, record a promising CAGR of 19.7% from 2021 to 2030."
  • AI is helping brands offer hyper-personalized beauty products as well as helping brands remain competitive as retail shifts to digital, notably hastened by the COVID-19 pandemic, a major challenge for beauty products.
  • Beauty brands are using AI in multiple ways, even to create personalized products. The major beauty brand, PROVEN utilized user-provided data to create "unique and customized products using A.I. mechanisms." In October 2021, PROVEN announced a $60 billion Regulation A+ Offering, some of which will be used to increase investment in their AI offerings.
  • L'Oreal, in 2020, released Perso, a "6.5-inch beauty tech device, developed by [their] Technology Incubator, [which] delivers personalized on-the-spot skincare and cosmetic formulas. By harnessing the power of Artificial Intelligence, the level of personalization will be optimized over time as the system gathers more data about [the] customer’s skin and personal preferences." Perso is also able to create customized foundation and lipstick.

Inclusive Beauty

  • Beauty brands are piggybacking off the broader social movement toward diversity and inclusion.
  • According to Yieldify, global "sales of multicultural beauty products [are] surging at a pace double the conventional market."
  • Brands focused on makeup products for all skin types, such as Fenty Beauty, have surged in popularity. These surges have correlated with the rise of social inclusivity movements such as Black Lives Matter.
  • Increasing representation in the beauty industry would mean offering makeup in more shades and formulations to meet the needs of Black and other People of Color.
  • The inclusive beauty trend is also expanding to other minority groups, such as men's skincare and makeup. According to IPSOS, "roughly one-third of all men are open to using cosmetics," with younger men being much more interested. Popular products include mascara, BB/CC creams, foundation, bronzer, and concealer.

Research Strategy

The research team relied primarily on industry publications, such as those by the Day Spa Association and McKinsey, as well as market reports, for this research. We identified trends based on those that were mentioned across multiple sources and/or had data illustrating their current/future impact.
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Beauty Consumer Journey: Challenges

Key Takeaways

  • A survey found that about 56% of the respondents are more inclined to maintain a brand or product they have bought before rather than attempt a new one when shopping online. The availability of virtual try-on services (applying AI or VR) would increase the possibility of purchase for 45% of survey respondents.
  • Even after researching online, beauty shoppers still opt for in-store purchases, for a personalized experience of consulting a salesperson about their individual needs and trying on products for the best feel.
  • According to the ESW Global Voices Pre-Peak Pulse Survey, 20% of Millennials and Gen Z buy beauty products from outside their country. Beauty brands looking to diversify into new regions are faced with various intricacies, peculiar to the industry, and crossing borders.
  • In the UK, due to the crisis surrounding the cost of living, 1 in 5 people are concerned about the affordability of skincare products. 1 in 4 people has either reduced their expenditure or completely stopped buying skincare products since the beginning of the crisis.


This research provides some friction points or challenges faced by consumers within their beauty shopping journey that demand innovation or improvement. These challenges are the lack of hands-on trial, lack of in-real-life interface, cross-border restrictions, product cost and availability, inconsistent buying experience, and in-store layout. Our findings are presented below and in the 'Research Strategy' section.

Lack of Hands-on Trial

  • A survey of 2,000 beauty and skincare consumers between the ages of 16 and 35, in the US and UK, found that about 56% of the respondents are more inclined to maintain a brand or product they have bought before, rather than attempt a new one when shopping online. One of the downsides of the eCommerce sales journey of cosmetics is the inability of the customers to experience the product.
  • Among Millennial and Generation Z shoppers, customer reviews and offers of free samples were identified by at least 74% and 72% of those surveyed, respectively, as factors that would increase the possibility of buying a new product. Though relatively new, the availability of virtual try-on services (applying AI or VR) would increase the possibility of purchase for 45% of those assessed. Chances are that 66% of buyers, from those surveyed, would patronize brands that leverage technology to suggest new or related products.
  • The “try-on gap” is more deeply felt by the beauty industry because of the many variants of textures, ingredients, and color shades, all of which must be consistent with the consumer’s complexion. For instance, interested buyers of BareMinerals’ foundation are required to decipher between the various descriptors for the 35 shades available, to identify the right match for their specific skin tone.
  • According to Jake Chatt (Head of Brand Marketing at Nosto), the challenge faced by beauty brands and cosmetics e-commerce retailers to encourage shoppers to experiment with new brands and products also presents a huge opportunity for the industry. "We are supporting our brands, including Dermalogica, Native, and Kate Somerville, to optimize their e-commerce sites, by imitating the experience of trying on products and getting guidance from consultants, to address changing consumer preferences as uncovered by our survey.”
  • Estée Lauder offers its customers an AI-driven, AR experience of virtual try-on makeup. The integration of its Lip Virtual Try-on solution made the company's conversion rate increase by 2.5 times. Likewise, the use of e.l.f Cosmetics' virtual try-on technology by e-commerce consumers yielded a 200% higher conversion rate.

Lack of In-Real-Life Interface

  • Beyond the absence of an in-real-life (“IRL”) interface to connect the shopper with the product, the consumers' "trust gap" is also driven by a lack of interaction with the salesperson. The fragmented and crowded nature of the beauty space makes the help of a salesperson essential to navigate the glut of choices and find a suitable product.
  • Hence, beauty shoppers still opt for in-store purchases, even after researching the products online. Before finally buying a product, shoppers choose the in-store, personalized one-on-one experience that allows them to consult a salesperson about their individual needs and to try on products that feel good.
  • Regardless of the omnipresence of e-commerce sites like Amazon, beauty purchases are higher in department stores, drug stores like Walgreens, and makeup retailers such as Ulta Beauty and Sephora. Largely because their personalized “human touch” is executed better in-store than by any online competitor.
  • The impersonal and static structure of digital beauty content — tutorials, videos, regimen guides, and product reviews — is insufficient to move beauty shoppers through the point of purchase. The in-store personalized “human touch” experience is an inimitable element of the sales process. The most attractive feature of the e-commerce experience, according to 52% of online beauty shoppers, is a chat tool with a live salesperson.
  • Data from Perfect Corp reveals that Estée Lauder’s iMatch Virtual Shade Expert enhanced its customer loyalty. Skin Match tools are suggested to increase checkout basket contents by 10%, with an 82% satisfaction rate resultant effect for brand partner customers. 64% of It Cosmetics customers have used an AI-driven foundation shade finder developed by Skin Match, a beauty-tech startup. A study has shown that 93% of beauty brands are ready to invest in AI skin technology.

Cross Border Restrictions

  • Beauty and other eCommerce brands are confronted with multiple restrictions as they try to expand cross-border. Beauty brands looking to expand to new regions are faced with various intricacies, peculiar to the industry, and changes across regions. ESW Global Voices Pre-Peak Pulse Survey found that 20% of Millennials and Gen Z do not buy beauty products from their own country.
  • According to the Whistl study, one of the most common cross-border retail goods are beauty and personal care items, which account for 18% of global retail purchases. Due to the compact and high-value nature of cosmetic products, great logistics are required to create an effective warehousing and distribution structure.
  • According to Giovanni Gallo (Vice President of sales and product development at the Canadian beauty brand Framar), “when foreign customers are charged with extra fees, they don’t understand that the charge is initiated by their credit card provider, so they expect a refund from the retailer.”
  • The purchase process is also complicated when multiple currencies are involved in the transaction. Conversion fees, exchange rates, and some additional steps make the process slower and less seamless.
  • Rather than opting out of cross-border transactions which could greatly reduce revenue streams, Framar chose to deal with cross-border payment barriers by trusting the professionals. The beauty retailer, Framar partners with Shopify to traverse its cross-border payments problems.

Product Cost and Availability

  • Spending habits are being impacted by the cost of living crisis, shoppers are being more prudent and taking stock of their expenses. According to research by Avon UK, 25% of women are giving up perfume, 22% of women are choosing to go without makeup, and 19% are doing without skincare products.
  • Similarly, UpCircle research conducted in the UK found that due to the cost of living crisis, 1 in 5 people are concerned about the affordability of skincare products. In customers aged 18-25, the number increases to 1 in 3 people. Of those surveyed, 1 in 4 have either reduced their expenditure or completely stopped buying skincare products since the beginning of the crisis.
  • In response to the increasing cost of living crisis in the UK, the beauty company Boots launched a new budget brand that comprises toiletries costing less than £1. According to Jenna Whittingham-Ward (Head of beauty for Boots brands and exclusives), "by making some little daily adjustments, the budget brand would enable customers to save while keeping clean and feeling good."
  • Beyond service, retail customers demand instant gratification, they want their desired products to be available. The fact that it takes no less than one month for a store to restock its inventory causes an unsatisfactory experience for in-store consumers. For consumers of color, and consumers with skin tones or concerns not suited to a conventional, more obvious, Westernized eurocentric beauty lens, the availability of products has been a challenge. Society’s notion of beauty is too strictly defined, according to 72% of Americans, as indicated in a report by Mintel.
  • Regarded as the best model of inclusivity in the cosmetic industry, Fenty, Rihanna’s makeup brand, launched with 40 shades of foundation, made for women of all colors. Brands like Maybelline and Mac have also followed promptly in working to customize to target and compensate for the shortage of suitable beauty products for people of color. Urban Skin Rx, Mented Cosmetics, and Live Tinted are some inclusion-focused brands that are now in partnership with retailers such as Target, Ulta Beauty, and CVS to launch their products nationwide.

Inconsistent Buying Experience

  • Beauty shoppers want a uniform experience, irrespective of the channel used. In many cases, the channel determines pricing, product details, and return policy, so customers have an uneven experience across channels, even within the same brand. Beauty brands are enabled to reach a wider audience and deliver a better customer experience, with an omnichannel strategy.
  • The omnichannel strategy — digital and traditional — creates a seamless experience for the shopper by delivering the same message throughout. So, regardless of whether a customer is shopping in-store, online, or through an app, the experience is the same. Research reveals that by incorporating three or more channels into marketing campaigns, marketers can raise their buying rates by about 287%.
  • According to BigCommerce’s health and beauty report, delivering a consistent customer experience across touchpoints is critical to omnichannel selling. This can be achieved by synchronizing inventory to prevent cross-selling, providing a consistent brand message throughout channels, and combining online and offline sales.
  • M.A.C Cosmetics' customers enjoy exceptional experiences when shopping online or in any of the physical stores across the globe. Exclusive online-only products and exclusive discounts/offers are featured on the website, while the physical stores offer services, such as product demos, makeup consultations, free samples, and in-store personalization with MAC’s WeChat mini-program.
  • With an informative website, SUGAR Cosmetics’ has a solid online presence. And through its physical stores, customers can test products before buying. The beauty brand’s omnichannel strategy makes it attractive to a wider variety of customers. SUGAR Cosmetics’ community of loyal customers and beauty fanatics connect with the brand on several levels.

In-Store Layout

  • According to Kantar, a leading data, insights, and consulting company, driving in-store conversion requires standing out and making the buyer’s journey easier — this means understanding how consumers look for products, make decisions, and how their choices are influenced. Retailers can earn the right to influence a shopper’s choice by making the purchasing experience easier.
  • Services beyond the sale are leveraged by cosmetic retailers to give added value to the points of sale — enhancing the collections, the presence of in-store technology, the ambiance, and improving digital innovation. A design tailored to the consumer’s demands and lifestyles is the beginning of the shopper’s buying experience.
  • Shoppers’ wish to test products before buying, is a major reason why physical stores continue to do well in the beauty & cosmetics space. So, the store layout and displays should make room for this. Customers may leave empty-handed, feeling discouraged if they do not have space to try out the bundles of available products.
  • Cosmetics merchandising is key to how beauty products are seen by customers during their shopping experience. Retail sales are influenced by how products are visually displayed, especially newly launched products.
  • A brand’s identity can be seen in its store layout, fittings, and product arrangement. Retailers can maximize their store layout to enable shoppers to test products before buying. The arrangement of beauty products should consider a display by micro universes or themes, a premium location or an assigned corner for testing products, or having a mini makeup session.
  • Lush’s unique approach to the in-store experience distinguishes it from its competitors. The cosmetics brand displays its products package-free, encouraging customers to touch, smell, and engage as they browse.

Research Strategy

We leveraged the most credible sources of information from Beauty Matter, Realwire, Rockwater, Vogue Business, and BigCommerce, to provide some challenges faced by consumers within their beauty shopping journey. We included among our challenges examples of friction points from brick-and-mortar stores and e-commerce stores' customers.

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Beauty Brands: Power of Sound

Key Takeaways

  • Ulta used podcast channels, then launched its own podcast, in order to reach new audiences and move the beauty industry forward.
  • Ulta used long-form audio content to deeply engage with listeners. Each channel already had an existing, highly engaged audience. The messaging and storytelling was tailored to the community of each channel.
  • First Aid Beauty launched a TikTok campaign that embraced the emergence of sonic identities. The company released a song called TikTok Made Me Buy It, which other TikTok users then used with their product videos.


This research provides two case studies of beauty brands utilizing sound to reach and connect with their audience. The first, First Aid Beauty, used a song and the social platform TikTok; while the second, Ulta, is using thought leadership and connecting through podcasts.

Case Study 1: First Aid Beauty

  • What they did: At the end of last year, First Aid Beauty launched a TikTok campaign that embraced the emergence of sonic identities. The company released a song called TikTok Made Me Buy It, and it is about people buying products after watching TikTok videos. The song's chorus goes, “TikTok made me buy it, and I’m obsessed. I’ve got that fab feeling; cause TikTok, yeah TikTok, made me buy it. Got my DM’s popping off.” Fab refers to First Aid Beauty, a clever use of the brand's initials F.A.B.
  • Kerry Eagan, First Aid Beauty CMO, said, "The song is not about [saying], ‘TikTok made me buy it,’ [as though] you checked a box. It’s more like saying, ‘I discovered this, and I’m feeling amazing. I’m feeling that fab.’ That’s what [content creators] will show in their videos … and how we married our brand with this song." The goal is that the song will be First Aid's signature calling card.
  • How they did it: The campaign was a paid TikTok post and scheduled to last four weeks. FAB partnered with Song Candy for the creation of this 38-second song. The song credits First Aid Beauty with the name and image. People have used the song to make their own TikTok videos, some feature products that aren't related to the beauty industry, while others use beauty products, but from a different brand. First Aid kicked off the "TikTok challenge" by paying 13 TikTok influencers to post videos using the song.
  • The campaign followed a First Aid product going viral organically on TikTok after a user with 407,000 followers (now) posted an unpaid video about it. The video got 35 million views. It also recognized TikTok's dominance in the beauty market and the importance of recognizable sounds or sonic identities (such as the sound of an Apple Mac starting up).
  • Last year, TikTok represented 45% of First Aid's influencer budget, compared to 15% the year prior.
  • Results: Some 2,584 videos have been made using First Aid's song. The brand's goal was to reach between 25 million and 100 million impressions on TikTok using both paid and unpaid efforts, and to obtain a lift in sales. While only the company can see how many impressions it has garnered, its TikTok account now has 83,600 followers and 313,000 likes.
  • After the unpaid viral video for the KP Bump Eraser Body Scrub product pictured below, First Aid's sales broke records and were the highest ever that week.

Case Study 2: Ulta Beauty

  • What they did: Ulta Beauty worked with Acast to create a collection of beauty podcasts. The goal was to reach new audiences and shift some important brand metrics by bringing respect and trust to the brand through the use of respected voices in the space.
  • Acast created one episode for each of the five different channels: Gloss Angeles, Forever35, Natch Beaut, Fat Mascara, and Naked Beauty. Each episode focused on one of the five pillars of Ulta's consumer platform: skin protection, regimen, nourishment, conscious beauty, and skin services, and these were matched with the appropriate channel.
  • How they did it: Ulta used long-form audio content to deeply engage with listeners. Each channel already had an existing, highly engaged audience. The messaging and storytelling were tailored to the community of each channel.
  • Right after this (in August this year), Ulta launched its own bi-weekly podcast, called "The Beauty of...", as part of a broader campaign, "Beauty&". The podcast and campaign want to move the beauty industry forward, using cultural leaders and beauty enthusiasts to send a message that "widens the lens" of beauty and allows people to reclaim beauty on their own terms. The Ulta marketing vice president said the brand wants to move away from promoting insecurity, and instead promote inclusivity.
  • The podcast aims to move beyond traditional beauty topics. It is hosted by an Ulta team member and make-up celebrity artist (with 15 million followers), David Lopez, and will give voice to different perspectives about what beauty is. The podcast trailer can be viewed here.
  • Results: According to Acast, the campaign resulted in a 45% increase in the likelihood that shoppers would choose Ulta shops over competitor brands. They also claim that there was a 90% — 95% lift in brand awareness, reaching a significant unaware target audience. The creative product also exceeded podcast benchmarks, especially in the categories of Relevant to Me, and Energetic.
  • The Ulta podcast, however, has a low Apple rating of 1.6, out of 246 total ratings. Comments indicate that listeners are angry about "men" (a gender-fluid person and a trans woman) talking about what it is like to be a woman. However, the controversy has also served as a platform for people criticizing transphobia and for the organic promotion of the brand.
  • Furthermore, despite the pushback, visits to Ulta's website remained constant — rising just slightly in August. Ulta has 33.8 million visits per month. The video posted on Twitter got 2.3 million views.

Research Strategy

For this research on case studies surrounding how beauty brands have used sound to connect with their audience or personalize storytelling, we leveraged the most reputable sources of information that were available in the public domain, particularly company press releases, the companies' websites, the original sources of the Tik Tok and podcast content, news, and advertising case studies, such as Acast.
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Beauty Consumer Needs in Immersive Worlds

Key Takeaways

  • One of the most popular adoptions of augmented reality (AR) in the beauty industry is the virtual makeup application. This innovation allows consumers to try-on makeup items such as lipstick, eye shadows, and others without the need to visit a physical store.
  • In an augmented immersive world, consumers can virtually tour the shops of their favorite beauty products, as well as make purchases on the go.
  • In the wake of recent sanitary emergencies that have resulted in an alteration to the personal routines of most people around the globe, an augmented immersive world ensures that beauty consumers don't have to put their lips on the same lipstick surface as others when testing out a lipstick brand or color.
  • For all the possibilities offered by augmented immersive worlds, one single limitation of this technology is the ability for beauty customers to have a physical feel of the product before making a decision.


This report identifies five needs from beauty consumers that can be addressed by augmented immersive worlds, including the possibilities of virtual try-on, shops, mirrors, and more. The report also identifies the need to touch a product before purchase as the only need that these technologies are not likely to address. Details of our findings have been analyzed below.

Beauty Consumer Needs That are Met by Augmented Immersive Worlds

1. Virtual Try-On and Efficiency

  • Many beauty consumers are likely to test a cosmetic product such as lipstick or foundation to determine if it is suitable for their face or their skin color before purchasing the product.
  • One of the most popular adoptions of augmented reality (AR) in the beauty industry is the virtual makeup application. This innovation allows consumers to try-on makeup items such as lipstick, eye shadows, and others without the need to visit a physical store.
  • 'Slidescreen' and 'Interactive' are two types of AR features that have been developed by brands for this purpose. Slidescreen allows Instagram users to try-on lipsticks of different colors on a split screen. In Interactive mode, the user is shown a virtual mirror with different colors of lipsticks around them.
  • An example of the adoption of this feature is the tool designed by L’Oréal Paris. "It presents a photorealistic chromatic simulation that allows you to try online, and in real-time, the products on the site — made possible thanks to ModiFace's patented facial recognition and augmented reality product simulation technology."
  • Another example is Estée Lauder's lips virtual try-on called the '30 Lipsticks Shades in 30 Seconds'. The application allows customers to test different lipstick shades effortlessly using AR-supported technology and makes the entire shopping process more efficient.

2. Virtual Mirror and Accessibility

  • The adoption of AR in the beauty industry has made it possible for consumers to access virtual mirrors to facilitate quicker color testing.
  • This feature tackles the need created by more basic AI tools that require users to upload an image when testing makeup filters. Rather, innovative brands, like Beauty Mirror, present the user with different makeup colors that they can try on in an instant by clicking on a color palette on the virtual mirror screen, allowing beauty brands to make it more accessible for consumers to test a wide range of products.
  • The virtual mirror also allows the user to view a different angle of the virtual makeup before making a decision by simply tilting their head to any angle of choice.
  • An example of this feature is Sephora's mirror, which was launched in partnership with AR mirror creator ModiFace. "The mirror has the ability to show the user the effects of their makeup in a photorealistic manner as they apply it."
  • This technology allows users to instantly and visually sample different makeup colors before making a purchase.

3. Virtual Shops and Flexibility

  • The penetration of e-commerce and virtual shops were largely boosted by the pandemic. During and shortly after the lockdown, customers were not able to browse or buy beauty products from physical shops.
  • This led beauty brands to focus on devising a means that can "provide consumers with an easy way to have a personalized shopping experience online"
  • AR allows customers to virtually tour the shops of their favorite beauty products, as well as make purchases if they choose, and makes the shopping process more flexible.
  • An Accenture publication remarks that 48% of beauty consumers are interested in shopping for 'virtual looks' within the next 12 months.
  • This AR feature was pioneered by Lizzie Para (BLP) Beauty, an Indonesian beauty company, to publicize the launch of a new location. The brand partnered with Assemblr to launch its virtual store by designing a virtual sample bar using AR.
  • The virtual shop is designed to be a replica of the physical store, where customers can take a guided tour of the items in the shop. A coupon is generated for the customer when a purchase is made.

4. Hygiene Concerns

  • The global pandemic of 2020 forced beauty brands to remove their makeup testers following concerns that in-store makeup testers were unhygienic and are applied close to the eye and mouth areas.
  • Beauty products such as cosmetics often require users to try out a particular color before making a purchase. By doing so, there is a safety and hygiene concern with regard to practices where many customers use the same tester.
  • AR addresses the need for hygiene and safety among beauty consumers, as remarked by Perfect Corp's CEO, Alice Chang. She said: "By leaning into innovative beauty tech solutions, brands can rethink experiential shopping for the post-pandemic world through contactless, virtual try-on that rival physical ones. Adopting AI-powered virtual try-on tools helped bring the in-store try-on experience online in an impactful, engaging, and safe way to meet evolving customer expectations."
  • Adopting a virtual approach ensures that consumers don't have to put their lips on the same lipstick surface as others, in the wake of recent sanitary emergencies that have resulted in an alteration to personal routines.

5. Curbing Wastage

  • In-store testers bring about lots of product and package wastage.
  • Around the globe, sustainability concerns have been a prime focus for both brands and consumers. This makes reducing waste an important part of our everyday life.
  • An augmented immersive world allows for personalization and recommendation. Through recommendations and try-on, waste from product testing can be eliminated, as consumers wouldn't want to buy products that they will have to throw away.
  • Speaking on this, Chang said: "AI beauty plays a significant role in supporting a brand and its sustainability initiatives. The traditionally wasteful consumer sampling practice can be replaced by a safe, convenient, and effective virtual try-on experience that limits waste and delivers a satisfying consumer shopping experience.
  • Therefore, adopting AI in the beauty industry delivers better customer satisfaction and helps brands reduce wastage through virtual try-on and recommendations.

Beauty Consumer Needs That Augmented Immersive Worlds Can’t Meet

1. Need for Touch

  • There has been an upsurge of online shopping around the world and across different industries including the beauty industry, with consumers pointing at different benefits of shopping online including convenience, lower prices, and others.
  • However, many reports and studies have also identified aspects of online shopping that some individuals dislike, such as risk perceptions, the need for personal interaction with a salesperson, the inability to touch the product, and others. Some of these points such as personal interactions with a salesperson can be addressed in an augmented immersive world, but the same can not be said for the need for touch.
  • For some consumers, touching a product is important in the evaluation of the product. The need for physical touch has been attributed as the reason such customers have not embraced online shopping.
  • AR allows consumers to explore products virtually. While this feature brings the product to an almost physical environment, what it doesn't do is allow the customer to have a physical feel of the product.
  • Some consumers have a high autotelic need for touch. "Autotelic need for touch describes people who experience pleasure if they can touch products, and it is hedonically driven."
  • Such customers tend to experience deprivation when they are not able to touch what they are shopping for online. As such, these customers are likely to be skeptical about the possibilities of the augmented immersive world because they crave even more real haptic input.
  • Research published by Wiley Online Library analyzed the possibilities of AR satisfying the consumers' need for touch. The study revealed that "consumers' autotelic need for touch is associated with benefits that positively impact various managerially-relevant outcomes such as store and product attitudes or purchase intentions. However, the results also point to differences between expected and experienced hedonic and utilitarian benefits along the customer journey." More details on the study can be found here.

Research Strategy

We leveraged articles, publications, and expert opinions published by reliable sources, beauty-related magazines, and credible blogs such as Accenture, Wiley Online Library, Adapty, Assemblr, LinkedIn, and others. From the host of sources, we were able to provide five beauty consumer needs that augmented immersive worlds have met, and just a solitary need this technology can't or hasn't met. While AR and AI are expected to meet several needs for consumers, finding specific examples of need that it has not met proved difficult. This is due to the limited availability of publications on the limitations of AR in the beauty industry. However, while the single analysis on the limitation of AR did not focus specifically on the beauty industry, it provides general oversight of the needs that AR can not meet.

Did this report spark your curiosity?


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