Sampo Parkkinen is the CEO and Founder of Revieve®, a personalized digital brand experience company in beauty, skin, health and wellness.
A few years ago, many considered new technologies such as artificial intelligence (AI) and augmented reality (AR) in beauty as nice to have. Early experiences were centered around entertainment and felt almost gimmicky. That is no longer the case. AI, in particular, has proven essential to delivering on personalization and tailored communications to meet the needs of consumers today and tomorrow.
Cosmetics and beauty technology leader L’Oreal took a bold first step by acquiring ModiFace in 2018. Since then, several beauty brands and retailers have followed suit, tapping into the digital space with the mission to reinvent their brand experience.
Moreover, health and beauty have undergone a monumental “makeover” in the past few years. The notion of beauty has expanded from pure color cosmetics to encompass a more holistic view of the consumer through the lens of skin, health, individual beauty and overall wellness. While these categories seem distinct from the outside, in the minds of the consumers, skin, health, beauty and wellness are not independent of one another. This interconnectivity of categories is evident in today’s landscape as ever-increasing desires influence consumers to purchase more consciously and sustainably.
Most recently, beauty brands have whetted consumer appetites for greater customization. Today, AI, AR and analytics power omnichannel diagnostic experiences and platforms to deliver service and product personalization. However, digitalization in beauty is not about deploying tech-powered experiences just because—it’s about understanding how tech can solve your customer’s problems and help you achieve your goals. This is how I see that technology is powering beauty innovation.
• By Delivering Zero- And First-Party Data That Drives Long-Term Strategy
For a long time, third-party data was a top asset. Brands would monitor visitors and gather data to enhance targeted ads through the usage of cookies. However, third-party cookies are no longer valued. Thanks to advances in personalization, brands have access to zero- and first-party data.
Generally, first-party data is requested when ordering a product or service. For instance, first-party data commonly can be a customer’s name, address or even information sourced from standard customer engagement, such as a purchase or details from web browsing.
In contrast, zero-party data is the data that a customer decides to share with a brand. This can happen via product or service recommenders, where users are asked in-depth questions about their preferences in return for more personalized service from the brand.
With this input, brands and retailers can predict trends and make assumptions by getting into the consumer mindset and adjusting offerings based on consumer behavior. Forrester’s latest research shows that customer experience is the top priority for 49% of global B2C marketers. This priority makes the collection of zero-party and first-party data paramount to CMO success.
But customers are worried and have distrust about giving their data. That means that transparent communications toward customers detailing the value of what you’re offering in return for customer data are critical for fair value exchange.
• By Helping Build A Cohesive And Seamless Brand Experience
Collecting and analyzing data allows for the level of consumer understanding required to serve the individual shopper’s needs and wants effectively. Utilizing a blend of novel technologies allows beauty brands and retailers to leverage personalization and provide opportunities to understand and engage with shoppers more intimately.
AI can support brands in crafting a personalized brand experience that aligns with customers’ expectations and can live anywhere the brand is. Companies understand the vital role of personalization in retaining loyal customers and brand advocates, which enables brands to create long-standing relationships with their customer base. For that reason, brands and retailers are now moving away from standalone solutions and starting to provide customers with an ecosystem of knowledge, expertise and customization powered by a suite of technologies.
However, these technological advancements can look slightly different depending on the brand’s resources. Larger organizations typically have an edge, as they can implement new technologies quickly and even build them in-house. More advanced personalization technologies can be expensive for a small beauty brand that is juggling the implementation of other tools. They risk getting left behind as more prominent companies are better resourced. What it means for a small beauty brand is that they must keep in mind the areas of the customer experience that are a must to enhance with technology.
• By Supporting Brands In Building More Loyal Customer Relationships
As the methods through which you engage your audience multiply from the current channels in which you operate to the metaverse in the future, for example, the value of technology as a critical component in achieving innovation across the consumer journey will continue to increase.
When exploring the customer’s perspective, it is essential to recognize their concerns surrounding AI- and AR-powered technologies. Due to a general lack of information and insights on new advancements, many misconceptions show a clear need to educate consumers on the functionalities and benefits of these technologies, such as the widespread mistrust of AI for replicating human, systemic and institutional biases. This begets a brand’s onus to engage in a transparent dialogue with its customers about why it does what it does.
However, technologies like AI and AR are often overlooked as tools to strengthen company values. For conscious consumers who prioritize sustainability, diversity and inclusion, AI and AR can provide companies with tools and experiences to reduce biases, provide carbon-emissions-free methods for product sampling and curate a more inclusive brand experience for every shopper.
Not to mention that as a standalone solution, customers might test out one technology merely for fun, but it doesn’t guarantee a purchase—and it’s important to remember that. The experiences you provide ideally have the output of increased purchases, but today, you’re essentially fighting for attention and engagement in a world where customers have endless options.
Keeping a brand salient to new consumer groups and consumer behaviors is the secret to thriving. As more brands and retailers seek to reimagine how they reach their customers, novel tech-powered experiences will continue to drive the beauty industry forward for years to come.