Digitalisation of the beauty industry is not new, but it is witnessing a remarkable transformation, thanks to the integration of artificial intelligence (AI). The convergence of beauty and technology has given rise to innovative solutions that are not only changing the way products are developed and marketed, but also enhancing the overall customer experience. In this briefing, we delve into the latest advances in AI and beauty and consider its impact on the industry and customer experience. We also investigate potential future trends for AI in beauty and highlight some essential data privacy considerations integral to using AI.
AI and Beauty in 2023
With a focus on customer experience, these developments are shaping the modern beauty industry:
One of the most significant impacts of AI in the beauty industry is its ability to provide highly personalised product recommendations. Companies like Sephora leverage AI algorithms to analyse customer data and previous purchases to suggest tailored products. Innovative startups like Skin Match and DCYPHER meanwhile create AI solutions which analyse customers' faces to recommend the right shade, and even create makeup bespoke to the customer's exact skin tone. This enhances the customer's shopping experience but also no doubt has a positive impact on customer satisfaction, loyalty, and ultimately revenues.
Virtual try-on tools, like L'Oreal's augmented reality (AR) powered app, "Modiface", improve the way consumers can experience beauty products. Customers can virtually experiment with different makeup looks, products, hairstyles, nail colours, and even try out various skincare products. This technology has clear advantages when it comes to engaging customers, and it could also contribute to reducing waste by diminishing the need for in-store sampling. In recent developments, Maybelline have released an AI-powered plug-in for use on video calls with Microsoft Teams.
AI-driven skincare analysis apps are gaining popularity, allowing users to assess their skin's condition and receive personalised skincare routines and product recommendations. Neutrogena's Skin360 web app, for example, uses image recognition and machine learning to analyse facial features, identify skin issues like acne and dehydration, and recommend suitable products or routines.
Sustainable Product Development
AI is helping beauty companies develop products that are more sustainable and to align with the growing market demand for responsibly created products. By analysing ingredient data and product lifecycles, AI can suggest eco-friendly alternatives and reduce the environmental footprint of cosmetics and skincare products. Some beauty companies are considering the ethical impacts of tech and AI itself – Lush recently published a Digital Ethics Policy on use of AI and ethical data.
Trends of the Future
AI-Enhanced Retail Experiences
The future of beauty retail is likely to involve AR and AI-driven in-store experiences. Augmented reality mirrors, equipped with facial recognition and AI algorithms, could provide customers with personalised beauty recommendations and virtual makeup try-ons at the physical store. Some beauty companies are trialling the use of AR headsets to help customers decide between fragrances.
Advanced Skin Analysis
AI's role in skincare analysis is expected to expand further. We can anticipate more sophisticated apps that can track changes in skin condition over time and adapt skincare routines accordingly, all through a smartphone camera.
AI-Generated Beauty Products
AI is also being used to create entirely new beauty products. Algorithms can analyse customer reviews and trends to identify gaps in the market, leading to the development of innovative products that cater to specific consumer needs. AI can also help address concerns related to inclusivity and ethics in the beauty industry. By analysing product formulations and customer preferences, AI can support the development of cruelty-free and inclusive beauty products.
Privacy Concerns and AI Principles
While AI offers numerous benefits to the beauty industry, it also raises privacy concerns. Many new offerings use facial images or scanning technology to create individualistic digital templates or profiles, which can mean engaging with legal requirements on collecting, storing and processing biometric data. Biometric data is classed as sensitive personal data (or 'special category data') under the UK GDPR. Collecting and processing this data raises concerns over whether adequate consent has been obtained from the customer or 'data subject' and, in the absence of explicit consent, what other lawful justification the beauty company is able to rely on.
As well as the collection, storage and processing of biometric data, use of AI and AR in beauty raises the possibility of data misuse and data breaches. Robust data protection should therefore be a key priority for those looking to adopt new technologies in this space.
Companies operating in this new wave should also consider whether any planned use of behavioural biometrics with algorithmic AI comes too close to predicting users' intentions and emotions, which the UK data regulator the Information Commissioner's Office (ICO) has warned against. Examples of behavioural biometrics include gaze-tracking, and analysis of facial movements or expressions.
As for AI, regulation in the EU is advancing with the progression of the EU AI Act, but the UK's approach to AI regulation is taking a different path. Further to the Government's White Paper published in March 2023, innovators in the beauty sector should be aware of the five principles which will underpin future regulation in this space:
- Safety, security, and robustness
- Transparency and 'explainability'
- Contestability and redress
Having these principles at the heart of AI product development will help innovators to adopt a 'compliance by design' approach to AI-enhanced consumer experiences. The development of AI-powered solutions should be carefully considered from the outset to avoid compliance roadblocks further down the line.
From personalised recommendations to virtual try-ons and sustainable product development, AI is changing the landscape of the beauty industry. Leaning in to responsible AI integration could promise a brighter, more innovative future for the beauty and retail sectors, where customer engagement is prioritised and bottom-lines benefit. Take a look at our AI resource hub for further information.