by As e-commerce continues to evolve, consumers expect greater personalization – especially in categories such as beauty and cosmetics. And technology can help. Over the past year, retailers and brands have had a new lever to pull to improve the customer experience: generational AI.
As investments in generational AI are expected to grow this year, Alice Chang, chief executive officer and founder of Perfect Corp., said technology and augmented reality will play a central role. Here, Chang offers insights into the technologies and how best to use them.
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WWD: How AI and AR are changing the retail and beauty generation?
Alice Chang: Mobile commerce and e-commerce have become the preferred shopping channels for many beauty and fashion consumers today. As more and more consumers turn to online channels for product advice and inspiration, it’s increasingly important for brands to equip themselves with e-commerce solutions that immerse and engage shoppers while providing personalized advice and recommendations . Especially when it comes to products like makeup and foundation, it’s hard for a shopper to know what will match or complement their skin tone without being able to imagine the product on their own skin.
This is where the convergence of beauty and technology comes into play. This combination has resulted in innovative solutions that are not only changing the way consumers shop, but also enhancing their overall experience. The generation of AI and AR is breathing new life into the consumer experience by providing beauty and fashion inspiration in exciting and creative new ways.
Through the power of precise AR and generational AI, technologies like virtual product trial allow consumers to try on beauty products, accessories and even clothing styles. This technology elevates the e-commerce experience by providing shoppers with personalized product visualizations, helping them select the best products for their preferences. This not only increases consumer confidence but also reduces the rate of dissatisfied customers, resulting in increased purchases and fewer returns.
WWD: How are these technologies used?
AC: The use cases for AI and AR-powered beauty and fashion technology are vast. From virtual consultations and trials to complexion analysis, personalized skin analysis and even AI-powered clothing trials, AI and AR have the power to match consumers with the best products for their style preferences and beauty needs.
Shopping for beauty and cosmetics online can be quite difficult. Without virtual trial tools, consumers face a guessing game when deciding whether a foundation really matches their skin tone, or whether their lip color is right. One of the biggest benefits of trying an AI and AR powered virtual trial is giving consumers confidence in their purchasing decisions. Companies such as Nars Cosmetics, Avon and Clinique have reported significant increases in customer engagement, satisfaction and conversion as a result of the integration of trial virtual solutions.
More consumers are turning to online shopping for clothing and fashion, jewelry, accessories, even wedding gowns. Brands see significant benefits when integrating AI and AR technologies into their online platforms to guide shoppers through the decision-making process and give them the same fun and exploratory experience they would get in a brick and mortar store.
Not only has AI and AR technology done wonders for the beauty and fashion industries, it has completely improved wellness and personal care — a global market projected to generate $646.2 billion in revenue in 2024. Solutions such as skin analytics AI and personalized skin simulations, near-instant insights into skin concerns, skin types and skin age. These solutions are being leveraged by skincare brands looking to put the right products in front of customers, and med spas looking to leverage emerging technology to improve the skin consultation experience. In addition, validation from the medical community, such as the Journal of Cosmetic Dermatology, shows the effectiveness of these solutions.
WWD: What is the value proposition for using these technologies? And the Roi?
AC: Technologies like virtual trial, AI skin analysis and generative AI can help brands deliver personalized, inspiring and valuable experiences to consumers at scale. These technologies help shoppers visualize styles, colors and results, ultimately increasing purchase confidence and customer engagement. As beauty and fashion shoppers seek personalized experiences from brands and retailers, these technologies will be essential for brands to compete and effectively engage with consumers in the future of beauty.
In terms of ROI, by leveraging AI and AR, brands can attract new customers, improve conversion rates and reduce return rates, all contributing to positive ROI. Many of Perfect Corp.’s brand partners gave observed up to 2.5 times increases in sales conversion and, on average, an 8 percent reduction in product returns after implementing these technologies.
WWD: What do retailers and brands need to consider before investing in this technology?
AC: The whole world is excited about how AI will change our lives, and the potential for AI to improve the lives of consumers is limitless. As with any new technology, however, it can cause skepticism and hesitation.
However, brands and retailers should embrace AI as a tool to delight and motivate customers and personalize the shopping experience in exciting new ways. When shopping for beauty and fashion products, consumers are very concerned about identifying which products are right for their unique needs. These technologies solve that pain point, helping consumers find the products that are right for them more easily. With interactive experiences like a virtual try-on, AI can create a more seamless and customized shopping journey for consumers.
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