Expert Speak: The impact of AI on the beauty industry

 Expert Speak: The impact of AI on the beauty industry

Image courtesy: Omy Lab.

Rachelle Seguin, the Co-founder and President of Omy Lab., writes about the impact of AI on the beauty industry in this edition of the ‘Expert Speak’ column.

The beauty industry has undergone a remarkable transformation in recent years, with e-commerce playing a pivotal role. As of 2023, the e-commerce market in the beauty industry has soared to an astounding value of US$99 billion. The COVID-19 pandemic further fuelled this exponential growth. Without in-store beauty advisors, beauty companies had to find innovative ways to provide personalized advice and recommendations to customers.

The beauty industry has witnessed a revolutionary emergence of Direct-to-Consumer (D2C) AI technologies in response to the pandemic’s challenges. This adoption of artificial intelligence is completely reshaping the online shopping experience for beauty products. Beauty companies are increasingly utilizing AI-powered photo analysis, questionnaires, and chatbots. These tools empower companies to offer customized products and routines tailored for each individual. AI adoption will further rise in the global beauty industry over the next few years, with nearly 20% annual growth.

Here are the key AI-driven, upcoming trends in the beauty industry.

1. Virtual try-on and personalized shopping experiences

Leading skincare, makeup, and haircare companies now host quizzes and questionnaires on their websites, enabling customers to receive personalized recommendations. Some companies, like Sephora, have embraced augmented reality (AR) technology to enable customers to try on makeup in real-time, virtually. Increasing demand for personalized shopping experiences may drive the virtual try-on cosmetics market to a projected US$1.5 billion by 2025. As per Shopify, try-on AR technologies have demonstrated incredible results with a 94% higher conversion rate. At MAC Cosmetics, virtual fitting has become essential to create a seamless shopping experience.

2. Startups pioneering unprecedented product personalization

Startups specializing in specific needs have taken product personalization to unprecedented heights. For example, our team at Omy Lab. has collaborated with dermatologists to develop SkinIA. It’s an advanced AI that creates unique custom formulations based on individuals’ skin types, allergies, preferences, and even a photo. Leveraging AI technology, Omy Lab. delivers superior results compared to human handling. Clients who utilize SkinIA experience an average uplift in cart value of 18% and an impressive 54% increase in conversion. This level of personalization not only predates the pandemic but also ensures the utmost confidentiality and privacy when addressing sensitive skin concerns from the comfort of one’s home. According to research, around 80% of clients would buy from brands offering personalized experiences.

Also read: Innovative beauty startup, Omy Lab., raises new funds for expansion

3. AI tools bridging the gap

Additionally, AI-powered tools have effectively bridged the gap with traditionally harder-to-reach segments. This especially includes men who may be hesitant to openly discuss their skincare routines or concerns. By harnessing the potential of AI, companies can discreetly offer personalized recommendations and advice, encouraging greater engagement from these segments.

4. Impact of AI on marketing and product innovation

AI tools have also significantly impacted marketing and other aspects of the beauty business. Algorithms powered by AI are now helping identify social media influencers in the beauty industry. These algorithms analyze follower count, engagement rates, and content quality data. This further helps brands find influencers who align with their target audience and brand values. Moreover, AI algorithms can analyze vast amounts of data and generate beauty-related content, such as makeup tutorials, product reviews, and articles, that match the style and preferences of a specific target audience. AI is also a source of product innovation in several companies, with data gathered by AI systems influencing new product development based on consumer skin concerns.

Also read: FemTherapeutics bags CA$2.5M for better women’s health tech by AI

The promising future of AI in the beauty industry

In summary, the beauty industry’s shift towards e-commerce has been accelerated by the pandemic, leading to the emergence of D2C AI technologies that provide personalized shopping experiences and virtual try-on capabilities. Startups and established companies are leveraging AI to deliver unprecedented levels of personalization and bridge the gap with traditionally harder-to-reach segments. Additionally, AI tools have revolutionized marketing strategies and product innovation, enabling companies to identify influencers, generate tailored content, and develop products based on consumer data.

Looking ahead, the future of AI in the beauty industry is brimming with promise. With the advent of next-generation generative artificial intelligence, such as ChatGPT, AI technology will continue to evolve and progress. This will enable highly personalized messaging, follow-up interactions, and even more precise product suggestions over the next decade. By cultivating deeper relationships with consumers through the power of AI, beauty companies can enhance customer retention and provide invaluable guidance and support.

The future of AI in the beauty industry holds immense promise, and we expect it to foster deeper relationships between brands and consumers.

About the author:

Rachelle Seguin is the Co-founder and President of Omy Laboratory, launched in 2018. At Omy Lab., she leverages her expertise as a chemist with a master’s degree in pharmaceutical science. While working as a part-time cosmetician during her studies, she recognized the challenges faced by individuals in finding suitable skincare, especially for sensitive skin and multiple concerns. This insight, along with her experience in the active ingredient industry, inspired her to prioritize freshly formulated and personalized skincare routines for optimal effectiveness and minimalism.

Driven by a passion for technology, Rachelle built her first website at 16. She created SkinIA with Omy and, in collaboration with dermatologists, the first artificial intelligence system for personalized skincare. SkinIA utilizes a selfie and a few questions to provide tailored skincare recommendations from millions of formula combinations. This innovative tool forms the foundation of Omy Laboratory’s operations.

In addition to her role as president, Rachelle oversees product development, emphasizing ingredient quality and sustainable packaging. Omy Laboratory introduced the world’s first refillable customized skincare line in 2023, reflecting Rachelle’s commitment to environmentally friendly, dermatologist-tested, hypoallergenic, and vegan products.

Rachelle also actively promotes entrepreneurship among young scientists and serves as a board member of the Young Philanthropists of Quebec, aiming to create a positive impact on the world.

Also read: Three Ships Beauty reels in CA$3.5M for better skincare


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