The Cosmetic Industry Bets on Retail Tech

cosmetics-visual-search-retail-tech

The latest digital revolution has been defined by different technologies aiming to blend the physical and digital spheres. It has deeply affected all industries, especially retail.
The way we shop for products has radically changed. And cosmetics have also experienced such a transformation.

 

A rising market

In spite of the challenging landscape that retail is facing, high-end beauty sales went up by 6% in the US between 2016 and 2017, according to The NPD Group. 90% of these earnings came from makeup. Cosmetics are, in fact, a product used on a daily basis, with two out of five women aged 18 to 54 wearing five or more makeup products every day, according to estimates.

Online is clearly taking over the market. For instance, 45% of US consumers say they buy skincare and cosmetic products online, with the percentage rising to 60% in the case of consumers aged 18 to 34. In this country, the largest beauty retailer, Ulta Beauty, saw their eCommerce sales increase by a whopping 63% in the third quarter of last year. On the other hand, Sephora, one of the biggest players in the industry, has also been working on blurring the lines between the physical and the digital, investing in in-store experiences that have left most retailers lagging behind.

 

Consumer behavior

One of the trends that has highly influenced customer behavior is user-generated content. This has emerged alongside a wave of influencers and celebrities that have made their way into the fashion industry, either by advocating third-party brands or creating their own product lines.

Statistics from Google show that 66% of cosmetic purchases made by consumers are influenced by YouTube. This tool provides them with more information and enhances product visibility, allowing them to better see how products look when used.

This is why they usually take informed decisions and sometimes even know more than sales assistants at the stores. This has made brand loyalty decrease over the years. One single negative experience can make a customer never choose a specific brand again. In fact, what customers now value are new, innovative experiences, especially those that make their journey interactive and let them try products.

 

The age of visual shopping

Visual content has gained more and more relevance in the cosmetic industry, always highly influenced by looks and design. The emergence of new technologies has come in handy. Those range from tools to assist customers and educate them throughout their shopping journey to innovative gamified experiences that increase engagement. And let’s not forget systems that personalize content to better tailor the offering to every single customer and achieve better conversions. According to the latest study by A.T. Kearney’s which looked at online beauty and personal care shoppers, consumers no longer want to accept the beauty business as it has always been and tend to increasingly be attracted to digital alternatives.

 

Product discovery experiences

product-discovery-cosmetics-image-recognition

Many beauty retailers have bet on new technologies and personalization to make the lives of their potential customers easier. For instance, Covergirl (sister brand of Max Factor), decided to create their Custom Blend App that uses facial recognition and artificial intelligence solutions to mix different shades of foundations to specifically match the customer’s skin tone. Shiseido and L’Oréal came out with similar ideas. For example, the latter uses augmented reality in their app to let customers virtually try different makeup products.

Technology brings the customer experience beyond brick-and-mortar beauty stores and helps deliver a more personalized journey. And we can’t deny that, facing retail giants that invest more and more in digital experiences, smaller beauty companies willing to thrive will need to get in the retail tech game too.

 

Hottest beauty retail tech solutions: visual search for cosmetics

cosmetics-visual-search-scan-smartphone

Examples of interesting tech solutions that retailers can use are bluetooth beacons or visual search.
Beacons, that let brands and retailers send messages to customers located around or inside the stores, might be a good marketing tool and can help them reach more customers with targeted offers. But it may feel intrusive and it can only be used in-store. Visual search, on the other hand, can connect consumers to the products that retailers sell wherever they might be. And most importantly, it gives power to consumers, allowing them to scan cosmetic and beauty products with their phones to access different kinds of digital content.

This technology can help beauty companies enhance the process of product discovery, while enabling more informed and better purchase decisions. This can help both companies selling different beauty product brands, such as Sephora, and individual brands, such as Dior, as it helps them connect with their customers while building trust with their products.

 

Reordering made easy

Visual search can be useful when it comes to reordering products a customer regularly buys. Sometimes finding the right words to describe a product we want to find or reorder can be tricky. We do not always know its full name, shade or finish (in case of eye makeup, foundation or lipsticks, for instance). Using image recognition in native or web-based beauty brand apps, retailers can make it easier for customers to place an order from the comfort of their homes.

Catchoom’s product recognition solution can be integrated into your web or mobile app in order to let your customers scan products to either buy that lipstick they fell in love with again, or to help them learn more about your products. For example, they can connect a foundation with a video explaining how to make it last longer.

Retail tech is taking the reigns of retail as a whole, and keeping up with digital progress is a great way to appeal a new generation of customers, much more tech-savvy and demanding than previous generations were.