Augmented Reality (AR) Is Revolutionizing The Beauty Industry
Augmented reality (AR) and artificial intelligence (AI) are changing e-commerce in the makeup and skincare world as we know it.
From virtual try-ons to skin diagnostics, this technology is bridging the gap between online and in-person shopping, helping consumers make more informed purchasing decisions and boosting sales for cosmetics businesses as a consequence.
But these app and website integrations don’t always come cheap.
How can smaller beauty brands incorporate this valuable technology without breaking the bank?
In this guide, we provide an overview of the rise of AR and AI integrations for online shopping in the cosmetics industry. We discuss the brands that have utilized it in the most effective ways, and how this technology can work for your small business.
What Is Augmented Reality (AR)?
Faust and colleagues define augmented reality (AR) as “the superposition of virtual objects (computer-generated images, texts, sounds, etc.) on the real environment of the user.”
In the context of online shopping, it acts like a filter that allows consumers to ‘try on’ items of clothing and makeup, or digitally alter physical features in real time just using their smartphone camera.
In the beauty industry, virtual try-on and color-matching applications help consumers find the right shade for base products and color cosmetics.
Global Market Estimates claims that the application of virtual and augmented reality in the cosmetics market is projected to grow at a compound annual growth rate of 25.5% between 2022 and 2027.
Using Artificial Intelligence To Improve User Experience
Similar integrations using artificial intelligence (AI) act like personal shopping consultants by making personalized styling, skin treatment, and product recommendations.
For example, computer scientists Crane and colleagues developed an AI model to detect the severity of a person’s wrinkles with 85.3% accuracy just based on an image of their face.
This technology can also be utilized to analyze the efficacy of anti-aging products. Even et al used AI to analyze a month’s worth of selfies during an anti-aging treatment, and found the AI was accurate at assessing the performance of the product.
Large beauty organizations are already incorporating these AR and AI innovations into their websites and apps. Examples listed by data scientist Sefa Erbas include:
Estee Lauder: partnered with ModiFace to create an AI-driven chat box to search for lip products, virtually ‘try on’ the shades, and purchase straight from Facebook Messenger.
Sally Hansen: worked with ManiMatch to make an app with a special 3D hand-scanning feature to ‘try on’ different shades of Sally Hansen nail polish.
FaceCake: designed an app that scans the faces of celebrities wearing makeup and searches for products that can recreate the exact look.
AR Helps Replicate The In-Person Shopping Experience
A Switch From In-Person To Online Shopping Across Industries
The pandemic permanently altered consumer behavior across almost all industries. Store closures forced consumers to shop more online, and switching to digital became the new norm.
A worldwide 2022 Salsify survey revealed that 68% of consumers continue to shop more online since 2020.
This is good news for small up-and-coming brands that lack the financial capital and brand recognition to sell to brick-and-mortar retail stores.
Consumer Behavior In The Beauty Industry Is Different
Store closures during the pandemic had a considerable effect on the beauty industry, as according to McKinsey, 85% of cosmetics were bought in-store before 2020.
However, relative to other industries, more beauty consumers have returned to their old habits. Digital Commerce’s 2022 survey suggests that 46% of beauty consumers still prefer an in-person shopping experience.
Why is this the case?
This preference is partially driven by the struggle to shade match.
Consumers Struggle With Shade Matching Online
A 2023 survey by Space48 revealed that 60% of beauty consumers believe finding the ideal shade is the most difficult part of shopping for cosmetics.
This can also be the case for color cosmetics like blush or lipstick, however, the focus is typically on shade-matching base products.
Brands have (thankfully) expanded their shade ranges to become more inclusive in recent years, with some even offering each shade in three different undertones.
However, with more options, and promotions promising “a shade to match everyone," consumers are more driven to find the perfect match for their skin.
Shade matching is more difficult to do online, with mere images of swatches to work with. Instead, consumers head in-store to swatch the product on their skin and test it before buying.
Due to this shade-matching issue, it’s tougher for smaller online-only brands to compete in both the color cosmetics and base product markets.
Until now.
Augmented reality and artificial intelligence plugins are disrupting the industry and helping eCommerce brands to overcome the shade match problem.
How AR and AI Are Boosting Online Sales In The Cosmetics Industry
This new virtual skin analysis, shade-finder, and ‘try-on’ technology encourages consumers to switch from in-person buying to shopping online.
For example, the UK online retailer Boots launched its ‘No7 personalised foundation analysis’ app to combat shade-matching issues.
This integration helps customers find their best foundation shade by combining:
A questionnaire to find your skin type
AI skin-imaging technology (a lighting-controlled analysis of skin tone based on 10 million samples)
An AR virtual try-on feature to help customers find the perfect product and shade match.
These AR and AI integrations have proven to be effective for the beauty industry:
According to TechRepublic, Sephora’s revenue grew by 11% in the quarter immediately following the release of its ‘Sephora Visual Artist’ try-on AR integration.
Likewise, according to AIX, Avon’s partnership with Perfect Corp and o9 Solutions included the introduction of AI and AR technology, which resulted in a 320% increase in conversions and a 33% boost in average order value.
This new technology is also effective in other industries.
Take Goodr as an example. According to Marketing Dive, this sunglasses brand boosted its conversion rates by 32% on mobile thanks to an AR feature that allowed users to virtually try on its sunglasses.
The Downsides Of AR For Small Beauty Businesses
Creating An AR App Is Expensive
Building an AR app is not budget-friendly. According to Intelivita, the cost for a unique AR app ranges between $10,000 to $800,000 depending on the complexity of the project.
This is prohibitively expensive for most new small businesses who are unlikely to see a return on that investment.
However, there are more affordable options for smaller brands. Beauty AR apps can be integrated into your website for a much lower fee.
For example:
MIRRAR charges based on the number of try-ons
Modiface charges annually for virtual try-ons, and on a per-use basis for its analysis tech app
The Consequences Of Poor Performing AR With Technical Difficulties
One limitation of AR in its current form is that it’s highly susceptible to what Brack and Benkenstein (2014) call ‘perceived performance risk’ - the risk consumers feel when a service or product does not work as they anticipated.
If you choose to invest in an AR integration, it must provide a good user experience and accurate results, with the correct shades for color matching and true-to-life try-ons for all your cosmetic products.
Rana and colleagues found that customers are more likely to adopt AI-based beauty products if they are easy to use, effective, and reliable.
Know your audience before investing in an AR app. Advanced AR and AI integrations are best served to a younger audience with the know-how to use the technology.
If your brand is aimed at the 65+ market, this type of technological integration is likely not the best use of your resources.
Additionally, it’s important to choose an AR that will not slow down or glitch on your website.
According to Google, web speed is a ranking factor in the search engines, and a poorly performing AR integration can damage your position in the search results. Consult an SEO expert if in doubt.
In sum, AR and AI can be an effective tool to boost sales for beauty brands:
Virtual try-on, color-matching, and skin analysis apps help to improve consumer awareness
These integrations can help to recreate the in-person shopping experience and therefore increase sales for online businesses
Brands like Sephora, Avon, and Goodr experienced an increase in sales or revenue following the integration of an AR or AI technology
AR is expensive to develop from scratch, however, there are more affordable pre-made apps that charge on a per-user basis
If you like innovative technology, you’ll love our innovative beauty creations! Looking to develop a new range of skincare or color cosmetics? Genie Supply has you covered. Find out more by contacting: customerservice@geniesupply.com or calling: (812) 329-1105.