Harnessing the power of Gen-AI in the era of hyper-personalized beauty

Gen-AI is accelerating the hyper-personalization of beauty, and simultaneously revolutionizing how consumers navigate skin issues and improve skin health.

Which season are you?

If your immediate thought was about the weather, think again.

In the beauty sphere, what is known as seasonal or personal color analysis has taken social media by storm, with beauty influencers flying all the way to Seoul to find out their personal color and share with their online following, prompting more and more beauty enthusiasts to hop on the bandwagon.

But what is a seasonal color? Popularized in South Korea, it is a method that considers each individual’s skin tone, eye color, and hair color to determine the most flattering color palette.
But they say a picture is worth a thousand words and since there are quite a few variations:

The intent behind it is to provide perfect skin-tone matching and enable consumers to make purchases (whether it be in makeup, fashion, etc.) that best complements them.

Although not yet mainstream in the West, this trend from Asia underscores an important trend across the board globally: hyper-personalization in the beauty sphere.

This trend has not gone unnoticed by the world’s biggest cosmetics brand.

Announcing a shift from "beauty for all" to "beauty for each" in their latest annual report, L’Oréal’s new strategy accurately sums up the market’s new focus on personalized beauty. The giant aims to tailor their approach accommodate the distinct needs, expectations, and aesthetic aspirations of each person by harnessing the power of Gen-AI to machine learning.

“Beauty for each” and the role of gen-AI

According to L’Oréal, 70% of consumers feel overwhelmed by the sheer number of products available(1) and many of them now turn to social media to help them make sense of the sea of options.

So how do people go about it? By relying on advice from strangers.

Research shows that more than 65% of consumers decide to buy a cosmetic product after hearing reviews from influencers on social media.(2)

This not only helps them figure which products are best quality-wise, but it also helps consumers keep up with new releases and learn how to use those products.

Going back to L’Oréal tech-powered hyper-personalization aspirations, exactly where and how does AI come in?

Ironically, by trying to replace influencers while simultaneously making it easier to work with them.

L’Oréal launched a service called Beauty Genius which acts as a virtual beauty advisor that offers personalized skin analysis and lets users “try on” makeup virtually, while also providing product recommendations and beauty tips, in much the same way a beauty creator would.

Despite the rise of solutions like Beauty Genius however, we are hardly at a stage where we can count beauty influencers out, and we can be sure that they will be part of the picture for a long while yet.

They do have cause for worry though.

Revitalizing Influence: can Gen-AI alleviate Influencer Fatigue?

Marketing on social media is getting trickier than ever: consumers are now distrustful of influencers promoting products to them because of the incentives they receive (monetary or otherwise): why should I believe you? Even with strong communities, we are consistently observing the sponsorship portion of YT videos getting skipped, sponsored links not getting opened and overall, followers are much wearier. And to keep the trust of their audience, influencers must be picky with who they choose to partner with, in an effort to not seem disingenuous.

Given this tricky context, video advertising company Rembrandt (backed by L’Oreal’s VC fund, BOLD) devised a tool that analyses videos and digitally inserts photo-realistic product images or animations into the setting using AI. Leveraging Regenerative Fusion (TM) technology, the in-scene media embeds photo-realistic images in influencer videos, rather than have them talk about the product for a couple minute in a segment that will often get skipped by viewers.

This solution also has the added benefit of making it easier for brands to work with small influencers and creators by eliminating the need for a lengthy sponsorship set-up process.

As such, AI is coming more into play to solve problems and create new solutions in this attention economy, but there is much more that it can achieve.

A (gen-AI powered) beauty advisor in your pocket

Makeup is officially bouncing back: the latest Piper Sandler Companies semi-annual Taking Stock With Teens survey revealed that for the first time in three years, teens spent more on makeup products than on skincare3. Overall, the segment has an expected 6% CAGR growth up to 20284.

The recovery comes with a shift in consumer behavior when it comes to makeup product consumption on both sides of the Pacific.

What has become known as the “quiet beauty” trend highlights the significance of ingredient quality, product effectiveness backed by evidence. Beauty enthusiasts are not only better educated on the ingredients in beauty products and their effects, but they are becoming more discerning, looking past flashy packaging and exaggerated marketing promises.

According to McKinsey, nearly 50% of Gen-Z consumers say they research products extensively before purchase5.

Using make up products that also take good care of the skin with not just basic moisturizing properties (with the use of Glycerin and the like), but with proper beauty ingredients and actives are spearheading the “skincarification” of makeup.

In Japan, makeup products such as foundations having over 70, 80 or even 90% of beauty ingredients (like the newly popular Shiseido Revital Essence Skin Glow foundation) are the new standard. These hybrid products entwining make up and skin care will no doubt keep gaining market share.

Furthermore, entire makeup brands are now placing 'care' at the forefront: Nuse (popular Korean makeup company Romand's sister brand), advertises color-care makeup products which combine skincare benefits and a natural look reminiscent of the clean girl aesthetic.

But even the best educated consumers have trouble navigating the complicated ingredients list on products, and it’s sometimes hard even for aficionados to keep track of which ingredients work with your skin, which actives to avoid, all remember all these factors when perusing for new purchases.

Amidst product renewals which come with different ingredients lists, discontinued products and new product launches, it can get overwhelming,

We can imagine the previously mentioned Beauty Genius, with its 10 petabytes of beauty-related data could come in handy. And new solutions leveraging gen-AI keep coming out. Haut.AI with its generative AI tech for modelling skin conditions (SkinGPT) claims to help users visualize the long-term effects of skincare products by showing simulations based on the clinical claims.

Gen-AI on the horizon

Diverging consumer behavior trends across the globe find a common denominator in hyper-personalization that companies in gen-AI can hop on to provide services to help consumers navigate the beauty industry and the many products on offer.

Gen-AI solutions can also help the average consumer go beyond the influencer sphere for inspiration, and bring clinical data and advice from dermatologists into the equation.

Additionally, the emerging focus on skin health despite insufficient consumer knowledge creates a gap which companies can help fill with visual solutions that leverages gen-AI and aim to not only market products, but also educate consumers.

Sources:

1.          L’Oreal Annual Report 2023

2.          Influencer Marketing Hub

3.          Piper Sandler Companies, Taking Stock with Teens Survey, Spring 2024

4.          Euromonitor

5.          McKinsey, the State of Fashion (Beauty) 2023 Report