High-touch services uniquely found in beauty stores like rows of concealers, eye shadows and lipsticks for customers to swatch on the back of their hands now sit empty to prevent the possible spread of the coronavirus on surface areas.
Much like last year, though, customers can still buy and try on makeup. But, in true pandemic fashion, it's done through their mobile devices thanks to augmented reality features.
"The use of AI and AR in beauty has, all of a sudden, become a much more kind of relevant topic," said Marjolein Jonker, manager in the consumer practice of Kearney, a global strategy and management consulting firm. Now that brands have increased their online penetration, they have to rethink the way they approach consumer engagement, she said.
The persistent threat of the virus has changed the face of the beauty industry. As consumers spend more time at home and limit social gatherings, the willingness to apply makeup, much less buy it, dropped.
Net sales at Ulta fell 7.8% to $1.6 billion in the third quarter. The company still beat FactSet expectations for adjusted earnings despite falling short on sales. Much like many retailers, Ulta saw a boost in e-commerce, with online comps up by 90%.
For years, consumers used beauty filters on Snapchat and other media platforms for entertainment purposes. But because of the virus, companies have begun focusing on "try-on" technology that allows users to see how products look on them before purchase, signaling an opportunity for beauty retailers to drive recovery.
"Even pre-COVID makeup was already declining. And if you look historically, we always kind of see a cycle of makeup dip and then makeup coming back," said Jonker. "Looking forward to maybe Q3, Q4 of this year, we do think that makeup will reignite. There will be like a makeup renaissance almost."
Though the use of these emerging technologies have gained prominence, some consumers and firms have been slow to adapt to them. In Euromonitor's recent Digital Consumer Survey, about 20.1% of consumers said they had used AR or VR to try on makeup in 2020.
Euromonitor also asked industry professionals about why they haven't invested in technologies like AR and AI, said Michelle Evans, senior head of digital consumer at Euromonitor International. "The top reason that comes back every time across 12 reasons we give them [is there's] just no clear use case for business," she said.
Still, more companies have launched products that leverage the use of AR. Google, Pinterest and Snapchat have either created their own tools or formed partnerships with companies that specialize in try-on technology such as Perfect Corp. or ModiFace to allow consumers to virtually test makeup.
Beauty companies have been testing the idea of using AR solutions in stores in place of product testers to make testing more sanitary. Sephora released an augmented reality mirror in 2014, and over the years, it has added AR features on its Virtual Artist app.
Virtual try-on tools have advanced over the years. Beauty tech solutions provider and YouCam app developer Perfect Corp., for instance, produced new features that detect over a dozen skin concerns, simulate aging using AI and offer one-on-one beauty consultations.
"Our initial point when we first started was really to solve consumer pain points, which the products do so, even prior to COVID," Adam Gam, U.S. chief marketing officer of Perfect Corp., told Retail Dive. "We had early seen a concern with the product testers and samplers in-store and the hygiene issues that came from that."
Across different versions of the app and business-to-business clients, Perfect Corp. has over 300 global brand partners, Gam said. The app also allows users to find foundations, hair colors, lipsticks and other products that match them, he said.
"Last March, when COVID first started hitting the U.S., there was a 32% increase in virtual try-on in our YouCam makeup public app," Gam said. "We also came up with solutions that if somebody were to go into a store and they didn't want to touch a kiosk where they can use things like voice activation or a hand gesture to basically move from one product to the other."
Makeup has always been a more experiential sector of retail, said Tatiana Perim, partner in the consumer practice of Kearney. Without widespread vaccine distribution, brands are now attempting to find the sweet spot between technology and human connection, she said.
"Prior to COVID, skincare has always [had] higher certified online penetration than makeup," said Perim. "The experience at the store has always been super important. It's where you actually play with the different products and shades."
"I think all the brands are now realizing how much tech innovation is as important as product innovation."
Tatiana Perim
Partner, Kearney
The sales conversion rate for AR try-on tools has yet to be proven on a large scale, experts said. Even so, experts agree that technology, in general, is a worthy investment for beauty brands to make because the traditional business model is changing.
"I think all the brands are now realizing how much tech innovation is as important as product innovation. And some brands are now rethinking their organizations to be able to effectively do it," Perim said. In the future, she said tech innovation could be "elevated at the same level as R&D"
Brands may be leveraging AR capabilities for marketing purposes: to acquire new customers, get their attention or use AR as a means to educate consumers on what the tool can do, said Jonker.
While she said that AR capabilities will progress in the future and consumers may soon normalize their use, in-store makeup testers might not disappear entirely.
"Consumers will want to continue to discover and experience a brick-and-mortar setting, but I think there will also be a group of consumers that's much more open towards using technology," Jonker said. "I think it will be a balance, and I think brands will have to think about both."
(Source: Retail Dive https://www.retaildive.com/news/want-a-pandemic-friendly-way-to-try-on-makeup-theres-an-ar-solution-for-t/594966/ )
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