Digital transformation

The pandemic has shown a different route altogether to the masses. Sales in the bricks-and-mortar shops went down due to restrictions and companies came up with digital ideas for sales to keep happening. Artificial intelligence, augmented reality, machine learning, and whatnot have taken up a better position at the pedestal. So, which sub-category is seeing the highest roundabout of activities? Well, digital technology has spread its neural network to fragrance, skincare, hair care, and cosmetics, among others.

Current situation

Post-2020, customers have been relying on the experienced staff for their menial or major skin and hair concerns. However, the industry dramatically shifted to surveys and questionnaires, which replaced the need for experts found in stores, when shopping virtually. People started feeling comfortable shopping online from the confines of their homes when lockdowns initiated throughout the world.

Yet, the category is still in the developing stage but seems to be one of the fastest growing segments, with a compound annual growth rate (CAGR) expected to move over and about 20% by 2030. At the same time, the expected valuation of the AI-powered personal care and cosmetics market can be predicted to reach ~20 billion US dollars. This opens enough avenues of demand and supply in the market.

Technical possibilities

Artificial Intelligence (AI)-powered shopping allows customers to acquire customised products with the help proprietary databases built by formulators and brand owners. They contain algorithms which suggest the right products based on what answers the customer fills in the provided questionnaire.

AI-technologies can be helpful in a broader sense as well. They can be used to interpret large sets of data that consumers easily provide via surveys and feedbacks. Using big data and data analysis, formulators get to sense and further forecast the market situation and they can then experiment with an entire new product line or product type.

Augmented Reality (AR) helps in detecting a user’s face via face mapping. Further in the process, a virtual face containing filters is imposed on the real face when brought in front of a camera. This paves the way for virtual try-outs to choose products such as lipsticks, foundation or concealers¹, helping consumers to check the right colour and coverage.

Prima facie the personal care and cosmetic industry is seeing a boom in developing nations. Amongst all, APAC will be witnessing the fastest growth with countries India, China and Japan contributing majorly. North America will partake in the growing cadre along with Europe and Latin America.

Fields of application

Brands are collaborating across the value chain to understand what exactly the consumer is looking for. Every person has a different concern which raises the need for a variety of permutations and combinations that can be built around personal care products.

The fragrance industry is a leading space where customisation has a huge scope and demand. Ingredient manufacturers are taking the help of big data and machine learning to customise the ingredients of the product. Every person has a different taste and keeping that in mind, many brands have found amazing technological hacks that ease or revolutionise the process of choosing the right fragrance. Consumers are being offered neuroscience-based fragrance advice² to enhance their overall shopping experience.

There is one interesting invention³ in the market that offers the power to create perfumes on the go. This mobile app-powered fragrance model suggests a variety of options to the consumers, helping them to make perfumes according to their moods and needs. It is a one-bottle solution for all your perfume needs, no matter what the occasion is.

The hair industry is offering virtual try-on as well. Now consumers do not need to get their hair coloured to know if it looks good on them or not. All they need to do is use the virtual trial room which works on the AI-based model⁴. A user can see different hues on their hair and find what fits best for them in seconds.

The virtual try-ons5 are open for the nail industry too, presenting hundreds of products to the consumer. This is not just helpful in providing a chance to access the broad portfolio of a brands’ products, but it also promotes hygiene as well as no product wastage that happens while trying nail colour the usual way.

A few fascinating nuances of technology can be seen in the cosmetic industry too. The technology is helpful in virtual try-on of the product, getting online skin diagnosis done and further getting recommendations of customised products for a particular customer. These virtual try-ons are available for foundations, concealers, and lipsticks among others, which helps the user in understanding the right coverage and tint, offering a correct and satisfied purchase.

Skin diagnosis is a prevalent use of technology in the cosmetic industry, as it is quite a revolutionary step. Many big and small brands across the globe offer this service virtually, accessing skin concerns such as wrinkles, pigmentation, etc. This diagnosis is based on an algorithm which is built on huge heaps of data and reference images. The algorithm is programmed in such a manner that every mark is analysed and matched with the database to find the right problem. People having different demographics, ages, skin concerns or gender are helped every day, be it for product recommendations, skincare routines, or signs of ageing.

Virtual shopping

One more interesting facet of technology-driven shopping is virtual live shopping6. Companies are offering customers the chance to see the application of products via live streaming. This also comes with an option for getting exclusive offers as a promotional activity, boosting sales the e-commerce way. Brands are stepping up their game by offering personal shopping sessions7

Conclusion

The future will use these and the upcoming technological advancements. Will the personal care and cosmetics industry go digital entirely? No! Customers are blending the channels for their shopping experience. Even if the online sales are thriving, the retail is going to stay across the funnel as well. Proposing technology in both online shopping and in-person store experience is going to lead the digital movement quite adequately.

References:

1 Avon Goes Greener and more digital 

2 YSL Beauty, Neuroscience Fragrance Finder.

3 Ninu Perfumes

4 Hair colour virtual try on, Garnier

5 Sally Hansen introduces the next gen virtual nail colour try on

6 Avon Live Shopping 

7 Perfumarie Virtual Concierge Shopping Session