A few years ago, Perfect Corp, the world’s leading AR company partnered with the Chinese e-commerce giant, Jack Ma’s Alibaba group, and integrated its YouCam Makeup AR virtual try-on technology into Taobao and Tmall Alibaba online shopping experiences. This brought new virtual try-outs to consumers in China. Just six months into using Perfect Corp’s AR technology, Alibaba revealed they had increased their conversion rate by 4x. 

Since then, new technology in the beauty industry is coming on leaps and bounds, immersing AI, AR, and VR into brands like MAC, NARS, and L’Oreal. 

Facebook’s Spark AR studio also adopted the rise of the interactive experience. Popular social media platforms Facebook, Instagram, and YouTube incorporate its technology into banner advertisements that allow consumers to click and virtually try on makeup products without ever leaving their app. Brands like Chanel, YSL, and Charlotte Tilbury now too offer VR try on services across their website and mobile apps.

Personalization is becoming increasingly important to consumers for a number of reasons. In a world where we are bombarded with marketing messages, personalization allows consumers to feel like they are receiving messages that are tailored specifically for them.

In addition, personalization can create a sense of loyalty and connection between a consumer and a brand. As of 2020, 56% of online shoppers attested to returning to an online store that offers personalized recommendations, and in a separate SmarterHQ survey, 80% of shoppers admitted to only shopping with brands offering personalized experiences.

When a consumer feels like a brand knows them and their preferences, they are more likely to continue doing business with that company.

As personalization technology continues to evolve, cosmetics brands offering personalized experiences will be more likely to create meaningful relationships with their customers throughout 2022.

Two significant ones to watch include the period-tracking app Clue which recently partnered with skincare giant L’Oreal to offer personalised hormone-related skincare advice for women and newfound dental tech app Toothfairy which aims to now provide its users with a bespoke remote treatment method.

Influencer marketing has been part of beauty e-commerce strategies for the past few years, and it’s not going anywhere soon. The British Beauty Council’s 2020 Value of Beauty report found influencer marketing had once more given the industry a notable boost in economic capacity, which found for every $1 spent on influencer marketing, brands secured a return of investment of around $11.45.

Harvard Business School reported that global spending on influencer marketing rose from an estimated $2 billion in 2017 to about $8 billion in 2019, and that spending is expected to jump to $15 billion by 2022. 

A significant initiative from L’Oréal has been its ‘Beauty Squad’ campaign, where a number of influencers created YouTube videos and articles for both L’Oréal’s website, social channels, and their own channels, tapping into a combined influencer reach of 5.5m. 

However, data suggests that there could be a new trend in the influencer industry: Authenticity.

Looking to the future, Mintel suggested that “beauty brands and influencers that showcase authenticity will stand out in this crowded landscape.” In addition, taking a more honest approach will help bolster trust among skeptical followers. 

Their claims are supported by the Harvard Business School study conducted by MBA Graduate Alessia Vettese. In her study, Vettese surveyed 250 self-confessed “beauty enthusiast” women, of which 43% said they’d only purchase from influencers who openly disclosed their endorsement deals. 

Vettese places the importance surrounding this on “consumers actively seeking out influencers who share the same skin tones and even skin sensitivities, and then those consumers want to trust that influencers actually believe in and use the products they talk about.”

These new values of transparency and relatability pave the perfect path for the up-trend of the just as influential micro-influencer, who consumers often feel they can build a personal connection with through regular, more personalized interaction.

Market analysis by AdNews revealed that collaborations in any industry were up to “30 times cheaper than digital advertising” due to the ability to tap into already existing audiences. 

In the beauty industry, this rings especially true: whenever a unique makeup collaboration is released, a slew of social media posts and reviews convert excitement to product sales. Often, these products are seen as collectibles to their audience (Andy Warhol x NARS is a standout example) and generate a large demand for similar releases within the beauty industry. 

So, when interests such as a favorite childhood snack or television show are combined with makeup and beauty, joining the existing audiences of both brands together in a marketing move called co-branding, more customers are attained with a potential reach – even appealing to those who wouldn’t typically be interested in makeup. 

Likewise, this past January, the Hershey Corporation coordinated with the Korean beauty brand Etude House to create chocolate bar-themed products. The line featured two eyeshadow palettes, one with Hershey’s Creamy Milk Chocolate bar packaging and the other mimicking the packaging of a Cookies ‘N’ Creme bar. As a result of the line’s unique product and packaging design, it was met with stellar reviews for its “collector’s item” quality and quickly became a bestseller.

It’s not just large brands taking advantage either: With digital advertising becoming an ever more convoluted space, co-branding with partners that operate in different industries  is a new, effective way of combining two sets of audiences and generating excitement as well as sales and brand following.

An Epsilon online survey of 1,000 consumers between the ages of 18-64 found the appeal for personalization within retail is high, with 80% of respondents indicating they are more likely to do business with a company if it offers personalized experiences and 90% indicating that they find personalization appealing. 

This continuing desire for personalization and connection with brands has allowed a new form of hyper-personalization to blossom in the beauty e-commerce industry thanks to AI technology and a two way, data-driven conversation.

There are already numerous examples that began to emerge back in quarter four of 2019: La Roche-Posay announced its stick-on My Skin Track pH patch, which tracks pH levels and prescribes targeted products via an app on your phone; SkinCeuticals displayed made-to-measure Custom Dose correction serums. 

At the same time, Mintel Research found that Google searches for ‘microbiome’ (the microorganisms on and inside your body) increased by +110% year-on-year in 2019. The rise in these searches suggests the facial skincare market is moving towards hyper-personalized skincare. Giants such as Unilever are already driving microbiome research. 

In the highly competitive beauty e-commerce industry, hyper-personalization is a way of ensuring brands can stand out by allowing consumers to make informed decisions based on their preferences, not flooding them with endless options. Using technology to help customers fulfill their needs allows for brand loyalty and repeated sales. 

One company utilizing data to make a personal connection is Prose, whose customers take a 25-question online quiz in order to determine their best custom formulations and product regimens. Questions range from hair type and scalp conditions to environment and lifestyle habits and lead to 135 data points that the company can use.

Now more than ever in a more data prevalent world, consumers are willing to have a conversation with their chosen brand if they feel as though their wants will genuinely be listened to and adapted.