Coty Inc. has unveiled a virtual reality fragrance experience in partnership with retailer Julieraque in Buenos Aires, Argentina. The store’s visitors are invited to don a VR headset to virtually “pick up” seven scented stones, each of which activates a short video on a fragrance concept associated with the scent. The VR experience is just one of a number of digital innovations Coty is introducing, including a voice assistant tool for Clairol and stations at Covergirl’s New York flagship store powered by augmented reality and artificial intelligence. Other premium fragrance brands are also trying out technology as a way to address a slowing market: the premium fragrance category is expected to grow 13 percent in the 2017-22 period, down from 16 percent in the 2012-17 period, according to Euromonitor International forecasts. Coty plans to take the VR experience to other markets and to customize it for specific brands.

Beauty company Coty, Inc. has launched an augmented reality mirror for its Wella Professionals salons, allowing customers to “try on” various hair colors and shades. A facial recognition feature enables the consultant to retrieve images of how the customer previously looked. The innovation builds on the company’s drive in digital technology, which includes a virtual reality experience for its fragrances, an AR partnership between Clairol and Snapchat, VR applications for CoverGirl, and a blended reality mirror for its Bourjois boutique in Paris. The new Wella mirror was developed alongside CareOS, a tech company in the health and beauty space. The mirror can capture a 360-degree video for the customer to see the look from all angles. The company plans to develop a version for phones and tablets, for salons without the space or funds for the mirror.

Facebook is fighting claims that brands are tiring of the social media platform. It commissioned an Ipsos study that describes how “digitally native vertical brands” and direct-to-consumer brands are using Facebook to engage with consumers and grow sales. The survey found that three in four US businesses that use Facebook posted higher sales growth than non-DNVBs, and also that over two-thirds reported “rapid or consistent revenue growth.” Despite such evidence, some commentators expect brands to distance themselves from Facebook and Instagram because investment in these platforms is inefficient. Some brands are now allocating a greater share of their budgets to programmatic, Snapchat and YouTube. Nik Sharma, head of DTC at VaynerMedia, says that direct-response marketing by D2C and DNVB marketers relies on being able to tell the best story.

Haut.ai, an artificial intelligence company, and Incscillio Medicine have teamed up to explore how skin ages and to develop an accurate predictor of chronological age. The PhotoAgeClock uses artificial intelligence to look at visual biomarkers of age, to predict age within an average of 2.3 years. Skin around eyes is the best biomarker for assessing age, and the data can be used for personalized medical and skin treatment to slow the aging process. The research was published in the journal Aging.

Beauty tech company Foreo has grown quickly within travel retail over the last two years, reaching over 200 outlets in over 20 countries. One of its innovations is the UFO ‘smart mask’. Although Asia is currently its main geographic region, it will focus on other regions next year, especially Europe, North America and Latin America. South Korea is a very important duty free market for the Swedish brand, with distribution in all of the top Korean travel retailers. The 20th and latest Korean opening was the recent launch at Hyundai Duty Free in Seoul’s Gangnam area. 

Coty has launched ‘Clairol Color Expert’, which it claims is the first hair color at-home Action for Google Assistant on Google Home. It can guide users throughout the hair coloring process, from identifying the best shade through applying and reapplying the color. Previous beauty tech from Coty includes a collaboration with Holition for a blended reality Magic Mirror at the Bourjois outlet in Paris. The latest innovation was built by Coty’s in-house digital agency, and Voice tech developer Voxly Digital.

Beauty retailer Ulta Beauty is investing in personalization. It has invested in Iterate, a digital workflow company, and Spruce, an online booking platform. It has also acquired QM Scientific and GlamST, two companies to support its augmented reality and artificial intelligence efforts. Ulta said that it may acquire more companies but doesn’t see M&A as a big part of its strategy. As well as personalization, Ulta is also keen to increase the number of digitally native brands it sells, and it aims to better segment and target consumers. Its personalization plans will be supported by the 30 million members of loyalty program, who contribute 95 percent of its sales. 

L’Oréal has announced the launch of La Roche-Posay My Skin Track UV, a battery-free wearable device to track the skin’s exposure to UV. It’s available in the US on apple.com and in some Apple Stores. The device was unveiled earlier this year at the 2018 Consumer Electronics Show and includes a companion app that also measures environmental factors such as pollution, pollen and humidity. The sensor is powered by the user’s smartphone. And clips on to clothing or other accessories. It costs $59.95.

Founder and CEO of Perfect Corp., Alice Chang, spoke at the CEW Connected Consumer Conference about ‘Beauty 3.0’, the company’s name for what it sees as the future of beauty. It will, she says, combine more personalized and proactive tech involving human touch characteristics, artificial intelligence and augmented reality. The result will be an extremely accurate virtual try-on experience. Perfect Corp. and its YouCam apps are now used by some 200 beauty brands and 700 million users. The company also encourages users to try YouCam’s set of virtual apps, free of charge, to enable them to test their features.

Advances in artificial intelligence are impacting the way beauty industry provides services to its customers and various examples show how this is playing out. One industry-changing example comes from skincare company Proven, which developed an assessment system that selects and then delivers a ‘totally personalized’ skincare product. Another innovation comes from startup Function of Beauty, which offers customized shampoos and conditioners based on customer information gathered using big data and machine learning. Last, a mobile app called Mira, which is still in the beta phase, uses artificial intelligence to recommend beauty influencers and products that are specifically suited for customers.

Opu Labs has created its own cryptocurrency, Opucoin, that it will use it to reward users who upload images of their face. The company will use AI to analyze the images for skin conditions and to be able to recommend appropriate treatments and to link consumers with dermatologists and personal beauty brands. This is part of an effort to build a database of facial images and personal data that the company can use to hone its AI and as a base to sell products and services. Founder Mark Bookman claims consumers are losing faith in advertisements for beauty products and would value an objective assessment to guide their choice. However, a reviewer of the AI-driven analysis found it to be inaccurate and the company acknowledges it remains a work in progress.

Sephora opened a new concept store in Shanghai on September 21, 2018 that encourages customers to explore its popular beauty products using interactive technologies like Discovery Tables and Magic Mirrors. SEPHORA Asia president Benjamin Vuchot states that the store offers an excellent customer service that combines the Sephora website with the in-store experience creating an unprecedented omni-channel experience. The store also uses the photo editing app, Meitu, alongside its interactive Ecommerce Walls and Virtual Artist technologies. Sephora is known for using disruptive ideas and technologies to promote creativity and diversity across its stores worldwide since its establishment in Paris in 1969.  

Hershey Co. has a ‘digital’ strategy that is centered on four components, search, content, conversion, and community. It is designed to enhance the company’s competitive advantage and help it succeed in the emerging omnichannel marketplace and holds that there is no offline and online division, but rather a continuum between the two. The initial goal is to convert a purchase, but the long-term goal is repeat purchases and to earn a place on the consumers digital shopping list. Hershey is also experimenting with digital impulse sales.  

Perfect365 has announced its integration of Kin, the cryptocurrency for consumer apps, allowing the company to become the only augmented reality beauty platform to offer built-in ways to transact using the cryptocurrency. Users of the Perfect365 app will be able to earn Kin within the app and use it to buy premium Perfect365 features. According to Perfect365, the move also aims to encourage women to use cryptocurrencies.

A survey by Diffusion and YouGov discovered several reasons for the growing popularity of DTC brands among consumers, with convenience being the primary motivation. 27% said buying DTC brands is more convenient than going to a store, with older consumers finding convenience more important than millennials (26% versus 17%). The survey found that DTC brands fell short with personalization, customer service, and limited use of organic or eco-friendly ingredients. Still, DTC looks set for continued growth, with 81% of US internet users indicating they’d buy at least one DTC item in the next five years.

British technology agency Holition is working on a new Facebook mobile app feature that will allow beauty enthusiasts to try on makeup products virtually with special camera filters. For this project, Holition will utilize the technology behind the magic mirror of French beauty brand Bourjois in its Paris flagship store. Bourjois's magic mirror uses 3D sensing smart camera technology to show shoppers how cosmetics would look like on their faces when they touch select a product in the store. The mirror can also suggest makeup products applicable to the shoppers’ skin tones. Holition plans to produce similar results with its Facebook filter which will take advantage of the social media app's AR mesh software. The filter will eventually be connected to Facebook's deep linking feature that will help users know where to buy the makeup products.

As part of its efforts to lure buyers into its physical stores and compete with other retailers like Ulta and Sephora, Saks Fifth Avenue overhauled its beauty department and installed "magic mirrors”. Customers can opt to have the virtual look emailed to them. Magic mirrors are just one part of the store’s efforts to upgrade its beauty customer experience, which now includes a concierge to assist shoppers and space for treatment rooms and events, such as tutorials and presentations. A move to the second floor has allowed more space for the cosmetics department.

L’Oréal has acquired its first technology startup, Modiface, for an undisclosed sum to help the group improve how it incorporates advanced technology into its brand offerings. Lubomira Rochet, L’Oréal’s chief digital officer, underscored the importance of global brands adapting to digital developments in order to survive but also said that L’Oréal’s strategy is to determine the most appropriate technologies for its brands and scale them across the group’s websites and stores, but in a way that works for local conditions. It is looking to develop technologies via a number of routes, including acquisitions; Station-F, a startup campus in France; and the Founders Factory, a digital accelerator based in London.

NARS, and its Japan-based parent company Shiseido, see data and AI-driven personalization as key in their efforts to cater to the needs of an increasingly digital customer base. Benjamin Lord, NARS executive director of omnichannel of global eCommerce, sees the use of data and AI and critical to stand out in an "oversaturated" beauty market that is cluttered with new players (Glossier, Beautycounter) and established brands (Clinique, Estee Lauder). In 2017, Shiseido acquired AI and AR developer Giran, and more recently, artificial skin tech startup Olivo Labs, and personalization solution provider MATCHCo, in order to help NARS and its other brands (bareMinerals, Dolce & Gabbana…) create new personalized products and seamless experiences for their customers. Shiseido looks to be ahead of most companies: mobile and online sales account for 25 percent of its revenue compared to just over 6 percent for the entire beauty industry as a whole. 

Despite the fast-growing popularity of voice-controlled devices, with 53 percent of chief marketing officers expected to invest in voice search in the coming year, according to Internet Retailing, search marketers do not have to worry about its impact on their platform. Voice-controlled devices may be a new channel for searching for information; however, the search marketing techniques that go with them are likely to be similar to those already put in place by successful marketers. With voice-controlled searches gaining more advanced capabilities than before, search marketers need to keep doing well instead of worrying about the new technology's impact on their business.

Businesses are at the early stage of adopting voice technology-enabled devices as a marketing tool. With 47.3 percent of US consumers having access to smart speakers, such as Amazon Echo, Apple HomePod, or Google Home, according to a recent study, voice technology presents a huge market opportunity for brands. CPG giant Procter & Gamble, for example, has been experimenting with in-home voice technology. It has created an Alexa skill for its Tide detergent brand, helping consumers remove more than 200 kinds of stains. For its part, PR agency APCO Worldwide launched the AI Comms Lab, a department serving as an incubator for ideas, such as early adoption of voice marketing.

Artificial intelligence holds great potential for understanding and attracting consumers yet many marketers are still unable to capitalize on it. Some 85% of executives say AI could give their company a competitive edge yet only 5% of companies have extensively integrated AI into their processes. The gap between the hope and the reality is due the lack of clarity about what AI can do for their business, underlined by the fact that 61% of companies say they do not have an AI strategy in place. Some of the uncertainty surrounding AI can be attributed to AI vendors who, instead of delivering ready-to-action insights, are developing products to solve problems.

Facebook and Instagram are emerging as powerful platforms for sellers of beauty products. Both platforms are rich with beauty content and Facebook (which owns Instagram) is investing to help beauty companies reach beauty consumers. AI, and especially its face recognition software, is enabling Facebook to better target user interests. It is also letting businesses have “real-time, one-to-one conversations with their customers over Messenger” (Karin Tracy, head of industry for beauty, fashion, luxury and retail, Facebook). Instagram Stories proved an effective way to deliver fun and behind-the-scenes content to young, mobile users. The number of followers on IS has grown rapidly, now standing at 300 million with more than a third of the most viewed stories provided by businesses. Facebook is also beta testing and trialing with Sephora an AR-enabled camera effects for use in Messenger. 

Beauty brands should take advantage of developments such as artificial intelligence, personalization, and the rise of indie brands in order to adapt to a changing market. According to Terry Young of Sparks & Honey, beauty brands should try to emulate the success of Instagram, Amazon, and Netflix by thinking “exponentially" rather than incrementally to create a competitive edge in the industry. Young, who is the CEO of the cultural consultancy company, said brands can achieve a 10X status by offering more personalized experiences, customized products, and actively engaging smaller brands in the fragmented, yet rapidly growing, marketplace. 

Restaurant companies are trying blockchain applications to manage their various operations, including customer loyalty programs and supply chains. For example, Chanticleer Holdings uses blockchain, which is a digital, peer-to-peer technology designed to store encrypted data and protect it from fraud, to manage its loyalty program. With blockchain, the company is letting customers earn points and rewards across its restaurant brands. Closely linked to the cryptocurrency bitcoin, blockchain lets users share and access data through a decentralized system that is both open and anonymous. However, developers can add safeguards and safety parameters to the technology. 

Chipotle is using technology to recover from a sales slump caused by an E. coli outbreak. One of the restaurant chain’s locations in New York City has functioned as a test site for many of the innovations Chipotle has implemented. According to the company, one of the biggest changes involved the company’s mobile ordering. Previously, customers have complained that its mobile ordering was confusing and came with wait times that could be as long as 45 minutes. Chipotle is using bold signs to help lead customers to mobile pick-up shelves and has reduced wait time to 12 minutes. Mobile orders account for 8.8 percent of sales, an increase of 40 percent from 2016 to 2017.

Beauty brands are adopting artificial intelligence technologies, including augmented reality, to create personalized marketing. With 70 percent of American women beauty buyers claiming being overwhelmed by product choices in a May 2018 survey by marketing firm Automat, beauty marketers see the need to provide consumers with product recommendations tailored to their needs. Beauty retailer Sephora’s Virtual Artist, for example, lets users upload photos in Messenger to virtually try on lipstick shades recommended by bots. However, marketers need to convince consumers to try and be comfortable with AI-enabled initiatives, with about a third of respondents saying they were unsure about using a virtual beauty advisor.

Amazon.com Inc.’s June 2017 acquisition of Whole Foods Market Inc. for $13.5 billion has prompted rival food retailers to reorganize, reinvent, and recalibrate their business and sales strategies. Whole Foods has seen an increase in sales and delivery following its merger with the online retailer. This is prompting grocery chains to speed up investment plans for delivery and pickup services for their online retail operations. Also, dozens of supermarket companies have entered into agreements with online grocery-delivery service provider Instacart Inc.

International shopping-center operator Westfield introduced its Destination 2028 retail concept. According to the proposal, the company sees the future shopping mall as a “hyper-connected micro-city,” which is powered by artificial intelligence, and integrates health and wellness services and community involvement. Westfield said the concept was developed based on a growing consumer interest in health and wellness.

Seeking to lure consumers away from its rival Walmart-Flipkart, online retailer Amazon plans to launch its 2018 Prime Day sales event in India in close partnership with its US headquarters. Also aimed at driving membership in the company’s Prime customer loyalty program, the sale will feature discounts expected to be bigger than before. Amazon India is also expected to introduce its virtual fitting-room technology Prime Wardrobe, which lets consumers try fashion products before buying them.