Find the top four reasons you should consider investing in beauty tech now.
Beauty brands and retailers' time to reinvent and remain relevant has never been so critical. According to Statista, the revenue of the beauty tech market, featuring cosmetics, skincare, and personal care products, is forecasted to increase continuously over the next five years, reaching 8.93 billion U.S. dollars by 2026.
Today, innovative technologies like artificial intelligence (AI) and augmented reality (AR) have taken over most beauty space operations, leading to more beauty democratization. Hence, most makeup, skincare, haircare, and wellness-related brands are preparing to make even bigger bets on tech and personalization to generate sizeable growth.
These are the top reasons why beauty brands and retailers are investing in beauty tech today:
1. To go beyond a standard shopping experience and master the nuances of consumer preferences
The beauty industry is a saturated market, meaning more than a stand-out product or a stand-alone solution is needed to succeed because consumers are more digitally-savvy and better informed than ever. Especially, generations like Millennials and Gen Z are more digital-savvy and want better O+O (offline plus online) experiences. Altogether, shoppers don't just want richer and more personalized shopping experiences – they expect and demand them.
Whether in-person, online, or via mobile, consumers are embracing tech-driven tools better to navigate the seemingly unlimited options on the market and discover ideal beauty products and care solutions that meet their concerns, preferences, and needs. This has forced beauty companies and retailers across all industries to master a customer-centric approach. Most importantly, anticipating what consumers' needs are before they realize it.
By leveraging Revieve's AI and AR-powered beauty platform spanning the customer journey, brands can transform how consumers educate themselves on their beauty concerns and discover personalized product recommendations tailored to the needs of each individual.
Revieve aims to provide long-term value by viewing the beauty experience as an individual phenomenon and empowering shoppers with solutions that deliver on their demands for personalization, leading to higher customer satisfaction and brand loyalty.
2. To protect the influx and collection of relevant customer data
After major browsers announced they would stop using third-party cookies, compiling zero and first-party data became a top priority for beauty brands and retailers.
According to the Adobe Digital Trends report, 60% of senior executives say losing third-party cookies will disrupt their marketing. So without hesitation, the time to re-think marketing strategies is now. Beauty companies and retailers must now lean into first-party and zero-party data, which will be instrumental in this new, more transparent ecosystem.
The difference between first-party and zero-party data comes from how users grant consent. While first-party data is gathered passively via customer interactions, users intentionally hand over zero-party data. Combined, both data types can help beauty brands and retailers deliver highly effective, privacy-aware personalized experiences tailored to each customer.
Companies like Revieve help beauty brands and retailers collect and evaluate actionable real-time data about their customers, thus keeping a higher share of customers at a lower cost across channels and all locations.
3. To deliver upon customer’s cravings for personalization
With the right technology investments and accurate personalization, brands can engage in more transparent communications with their customers by providing deeper context across the customer journey.
According to a survey by Epsilon, around 80% of consumers are more likely to purchase from a brand if it offers personalized experiences, and 90% of them indicated that they find personalization appealing. An Accenture study also found that consumers who get personalized recommendations are 75% more likely to purchase, propelling the push for brands to personalize and differentiate offerings.
Moreover, personalization programs executed at scale can help beauty brands and retailers demonstrate the value consumers get from their personal data. This allows businesses to seamlessly connect the dots between multiple platforms and devices to develop a more comprehensive view of their consumer profiles to personalize the shopping experience further. Personalized product recommendations help target a wide range of consumers, assist in quickly discovering relevant products, and encourage them to purchase complete care routines or individual items. For instance, during Q2 2021, No7 Beauty Company saw that with an AI Skincare Advisor powered by Revieve, the average order value increased by 48%.
4. To avoid missing out on sizable growth opportunities
Beauty tech is beginning to form a powerful new way for beauty brands to impact their business metrics. Experiences powered by AI/AR can help drive metrics that result in higher conversions, average orders, and purchase value, driving longer sessions and customer retention.
For example, on average, our customers see a 2-3 x increase in conversion rates, a 25% increase in basket size, and a 3.5x increase in Lifetime Customer Value. In addition, we've helped our customers fulfill their business goals with frequent optimization of their solutions with Revieve's 90-day Partnership Programme.
To mention a few, Revieve's partnership with health & beauty giant AS Watson helped boost conversions, average order value, and time spent on the e-commerce sites for Superdrug and Marionnaud Switzerland retail brands. Superdrug saw its users converted by over 70%, while the average order value increased by over 29%.
In the case of Living Proof, Unilever's prestige haircare brand, there was a 67% conversion rate uplift amongst users engaging with the advisor compared to the previous period. Living Proof has also seen a 20% uplift in the Average Order Value compared to the last period. At the same time, the revenue per user is 2.4 times higher for users that went through the experience.
The sooner you start investing in beauty tech, the faster you’ll see results. Get in touch today.