If you’ve been anywhere near the online beauty world in the last year or two, you’ll know this: beauty tech is taking over.
Tech and AI are shaking things up just about everywhere — and beauty is no exception. In 2021, the beauty tech market was valued at a whopping $52.53 billion, but it’s set to be worth more than triple that in years to come. By 2030, experts estimate the beauty tech market will grow to $189.15 billion. The AI beauty sector alone is expected to catapult to $6.8 billion by 2027.
Still, it begs the question: why? It’s no secret that these tools collect huge amounts of information. After all, personalized products need personalized data. So are they worth it, and just how safe are they? Which tools are grabbing consumers’ wallets? We did extensive research into the world of beauty tech and uncovered some interesting insights.
A New Era of Beauty
It’s true. We’ve well and truly entered a new era of beauty. Once upon a time, brands just needed pretty packaging, nice fragrances, and budget-friendly prices to get beauty products into shoppers’ baskets. Today, things are very different.
What we’re looking for and how we’re looking for it has shifted dramatically. Pre-pandemic, 85% of shoppers purchased beauty products in-store — but then things changed. People could no longer try new products in person, and they couldn’t buy them in brick-and-mortar stores, either. Between March 2020 and February 2022, consumers spent approximately $1.7 trillion on online products, and it drove the online beauty industry wild. That growth isn’t going anywhere: from 2021 to 2026, health and beauty e-commerce is projected to climb 77%.
Not only did Covid force in-store shoppers to go online to get their retail therapy fix, but it also made brands rethink how they market their products. How could they let people see, feel, and test their products at home? By introducing virtual try-ons, personalized questionnaires, and AI filters, of course. This opened the world’s eyes to a more personalized beauty experience — one where beauty shoppers could explore products that cater exactly to their needs.
In general, consumers have become much more health aware, wanting to take better care of themselves and the environment. They want to know what’s right for them, their bodies, and their beauty requirements — in short, they want exactly what their body needs. Interestingly, studies reveal that 71% of consumers feel frustrated when shopping experiences aren’t personalized. Similarly, over 40% of consumers would consider using voice assistants for more personalized beauty product recommendations. There’s no doubt that this is powering the beauty tech and AI revolution. Shoppers no longer want to browse an entire product line; instead, they only want to see products that work for them and their particular concerns. AI is forcing brands to offer need-specific products, and those that don’t risk falling behind.
Take the personalized skincare phenomenon, for example. Leading skincare brand The Ordinary launched a Skincare Regimen Builder, which is an online quiz consumers can use to find the right products for their skin’s needs. It asks a series of questions about concerns, skin quality and texture, age, and favorite skincare products.
In just four minutes, it gives you your very own individualized morning and evening skincare routines. All shoppers need to do is click Add to Basket to buy the recommended products. Is it genius? Yes, and it’s working: research shows that 75% of consumers say they’re more likely to buy products if they’re based on a personalized recommendation. Not only that, but we’re more willing to dig into our pockets and spend that bit extra for bespoke recommendations — 77% of consumers have chosen, recommended, or paid more for a brand that provides a personalized experience.
It seems we’re happy to welcome brands into our personal lives in ways we never have before. Surprisingly, 29% of consumers admitted they’d let brands track their emotions and moods to personalize shopping experiences. Sure, that means you’ll get skincare and makeup tailored to your stress-prone skin, but you could also argue that it’s a massive invasion of your privacy. Does your favorite skincare brand really need to know whether you’re having an off day? What about their sister companies, and anyone else they could be sharing your information with?
When we look at just how much data these beauty tech tools gather about you, it makes them seem more scary than convenient. The privacy of these tools is a whole other issue entirely. There’s no easy fix. Sure, you could buy a VPN to help anonymize your data, but if you willingly hand your information over to these brands, whether that’s through online quizzes or virtual filters, they can still access and store it — with or without a VPN.
Are these tools really worth giving up your privacy? It doesn’t seem like we have much choice in the matter. Beauty tech is everywhere — even your bedroom Alexa is in on it.
Machine Beauty Learning: Your Face or Mine
The beauty tech industry is largely driven by the try-before-you-buy method, giving shoppers the ability to see and feel products before they commit to a purchase. This gives consumers much more than just a new buying experience. It allows brands to understand and address consumers’ pain points by giving them exactly what they need. In turn, this helps customers make more confident buying decisions — and it’s making them more inclined to buy.
The positive effect of beauty tech for brands is undeniable. World-leading makeup brand MAC saw a 200% increase in customer engagement by offering an augmented reality (AR) virtual try-on for their eye, face, and lip products. The try-on tool allows consumers to test different shades and find the perfect colors for their skin tone. But they’re not the only ones seeing dramatic growth. Jane Iredale’s average online site sessions grew by 300% from their virtual lip shade try-on.
Marianna Naturals also increased site traffic by 300% and sales by 30% from personalized skincare analysis. Their AI skincare diagnostic tool analyzes consumers’ wrinkles, spots, skin texture, and dark circles to recommend a personalized regime of products for their complexions.
In many cases, brands don’t even need to market their products directly. One survey found that 43% of buyers found new beauty tech products via YouTube influencers, while 44% said they discovered new products via social media trends. Even our household gadgets are guiding our purchases — 70% of buyers noticed they received targeted product marketing emails after researching via Siri or Alexa.
When these products are pushed into our faces, email inboxes, and internet searches time and time again, is it any wonder we’re curious to try them out? This got us curious about another question, too — which trends and tools are dominating the beauty tech industry?
Beauty Tech: The Tools and Trends Taking Over
Smart mirrors, virtual try-ons, AI-generated skincare regimens — people are investing in a whole host of beauty tools.
Virtual Makeup Try-ons
Virtual makeup try-ons are perhaps one of the most common and influential beauty tech tools available. At least 31% of Gen Z consumers say they’ve experimented with one. 58% of Gen Z beauty buyers have also used an AI filter to help find a color-specific product.
With a simple filter, consumers can explore a full range of products and colors to find their next eyeshadow or lipstick shade. Some brands are taking things even further with AI-generated recommendations and image analysis to match specific products to your needs and complexion.
Just like makeup try-ons, leading hair brands are also using AI to let people experiment with new hair colors, styles, and products. These tools can analyze your hair type and color to recommend the perfect hairstyle for you, alongside an AI-generated list of recommended products.
Usually, these tools involve granting access to your phone’s camera and video, whether that’s through the brand’s app, on their website, or even via a scannable QR code. The virtual tool scans your face and all your unique features to let you swipe through shades and provide personalized product recommendations. They’ll typically gather other details too, using questionnaires or forms to capture more information about your wants and needs. It’s incredibly convenient, but it’s also concerning that we’re handing over our biometric data so willingly.
The Elizabeth Arden Virtual Store
Leading cosmetics brand Elizabeth Arden launched a virtual store using AI-generated imagery. The VR store created an immersive experience of their well-known Fifth Avenue boutique. It hosted multiple virtual rooms that consumers could drop in and out of. Each room told a story of specific makeup items, including the Victory Red lipstick created during WWII. Beauty shoppers could buy products within each room while enjoying the full brand and product experience.
Smart Beauty Devices
A mirror used to be purely for checking your reflection — until beauty tech came along. Smart mirrors let consumers try on and explore new products, using machine learning to analyze specific facial features and characteristics like skin tone and texture, eye shape, and even age.
Many smart mirrors include photo and video technology, so you can submit images and recordings via the mirror itself. The result is a line up of tailored products based on your personalized data, or even your very own digital assistant who can help guide you through certain products. Brands can also gather other analytics from these smart mirrors, including which items you tried, how long you spent trying them, your purchase history, and almost everything else you can imagine about your shopping habits. All that from a mirror? While it’s clever, it seems like we’re being tracked and watched just about everywhere.
Mirrors aren’t the only device out there either. Smart hairbrushes, toothbrushes, and bottles are entering the industry, usually with apps linked to your phone to track your habits. Smart hairbrushes can monitor how you brush your hair, alongside your hair type and needs to recommend certain products. Frizz control? Split ends? Too much bleach? Smart hairbrushes can detect it all. If you suddenly start seeing targeted emails and ads for anti-split-end hair oil, you know why. The hairbrush gathers your data with every stroke.
Beyond hair and makeup, there’s something else dominating the beauty tech industry — skincare. A makeup wipe and nice-smelling moisturizer used to be the way to go, but now we’ve introduced 10-step skincare regimes with oils, serums, moisturizers, retinols, SPF, and everything in between. Thanks to AI, it’s easier than ever to find out which products you need in your skincare routine.
Leading brands are investing in AI and AR to analyze consumers’ skin complexions, looking at everything from texture and color to wrinkles, sun damage, and blemishes. Alongside personalized questionnaires, skincare tools can recommend a full range of products for your exact skin concerns and needs. Some can even track how your skin would look if you used the recommended products, or see how your skin will age over time. In many cases, skincare tech tools are becoming part of our daily routines, allowing us to log updates, track changes, and shop the latest products.
Skincredible by Sephora
Skincredible by Sephora is an in-store device shoppers can use to get personalized skincare recommendations. It scans consumers’ faces to analyze their skin type, needs, conditions, and top concerns. The gadget analyzes four main categories: pores, sebum, hydration, and lines/wrinkles. It also gathers personalized data like lifestyle, age, and sun exposure to yield more accurate results. It then recommends specific Sephora products from eight categories, including makeup removers, cleansers, toners, serums, moisturizers, eye creams, sun creams, and face masks.
Metaverse Beauty Purchases
Alongside tech tools, many beauty companies are entering the metaverse, bridging the gap between the online and offline worlds. Consumers can try on and explore new products, entering different worlds with immersive experiences. Brands can invite shoppers into virtual rooms that replicate physical stores, letting them attend brand events, engage with other consumers, play games, or discover stories about the brand. They can also buy products directly from the beautyverse, making it easier than ever for consumers to get their hands on the latest products.
Is Beauty Tech Data Hungry?
The beauty tech industry might be growing, but so are concerns about it, especially around privacy. Beauty AI tools rely on huge amounts of personal data to give the hyper-customized experience promised to consumers. It’s simply not possible to provide this level of personalization without gathering information — but is it worth it?
The type of data these tools collect usually falls into one or more of three categories: contextual (location and weather), demographic (age, concerns, allergies, and personal goals), and behavioral (browsing history, search keywords, abandoned carts, and purchasing habits).
Certain AI applications, such as virtual try-ons and filters, rely on facial recognition to produce individualized results. This includes highly detailed information about your face and features, usually via access to your camera, microphone, and video recorder. The more accurate the AI tool, the more information it needs. They can log everything from your exact facial shape to retinal scans. This is as risky as it sounds.
Just like your fingerprint and DNA, facial features fall within the category of biometric data, which can easily be used to identify you. The nature of this data also means that beauty tech companies need to gain proper consent to gather, use, and store it, though it appears not all organizations are following protocol.
In recent years, there have been ongoing questions about how beauty brands are capturing and using consumers’ personal information, with many well-known companies hitting headlines and facing lawsuits amid privacy concerns. Global makeup brand Sephora faced a fine of USD $1.2 million for breaching the California Consumer Privacy Act. Sephora allegedly sold consumers’ personal data illegally via third-party trackers to serve targeted ads and discounts. The brand also failed to uphold consumers’ opt-out requests, continuing to send targeted marketing information even after consumers withdrew their consent.
Even where consent is obtained, there are still questions around how freely it’s given. Some beauty tech companies rely on implied consent, typically through the use of a pre-checked box that consumers forget to opt out of. They can even combine consent to give biometric data with consent for sending marketing materials, tracking analytics, or sharing data with third parties. In this example, it means a consumer cannot use a virtual try-on tool without also agreeing to being monitored or sharing their data with unknown sources. How far your biometric data then travels across the internet is unknown. If an unauthorized user gains access to facial data, they can use that information in any way they like — whether lawful or not.
There are also further concerns about in-store and offline methods, especially for smart mirrors. Some beauty brands use in-store smart mirrors to let consumers test virtual try-on tools while shopping in a physical store. Do retail workers gather explicit consent from shoppers? Do they explain how their information will be used before encouraging them to use the virtual try-on tool? These are all questions that remain unanswered and are sure to be investigated further as beauty tech continues to dominate the market.
Even so, it seems the economic benefits outweigh the privacy risks for a large proportion of consumers. Studies show that only 23% of global consumers feel like they’re in control of their private information, though some generations are more willing to compromise their privacy for greater value, including personalized shopping experiences. Over 50% of millennials and Gen Z are willing to share their data and let companies share it with third parties in return for more value. While the privacy risks may be too prominent to ignore, it seems many of us are choosing to do just that.
Beauty Tech Buying & Spending Habits
Spending on beauty tech tools is growing everywhere, though some countries are pushing the market forward further than others. On average, US consumers spend $1,754 per year on beauty and cosmetic products, which is perhaps why the US beauty tech market is growing faster here than anywhere else.
In 2021, US beauty tech market revenue was $1.34 billion. By 2026, its estimated revenue will reach $3.42 billion. The second biggest market is China, though revenue is only expected to grow to $2.25 billion by 2026 — more than 40% less than the US. Japan and the UK follow closely behind. As for where our money is going, consumers spend the most on skincare, haircare, and makeup products. Now we know why we’re seeing more and more beauty tech tools across these three categories.
Beauty tech spending also differs if we look closer at generational purchasing habits. Two groups have the most spending power of any other — Gen Z and millennials. Each year, millennials fork out $2,670 on new beauty products, accounting for 48% of all online beauty purchases.
Gen Z are also hooked on the beauty tech trend, accounting for 35% of online beauty purchases. This group spends an average of $2,048 every year on new beauty products. Together, consumers across both generational categories are splurging over $4,000 of disposable income in beauty products every year. For some that might seem an unthinkable amount, but for these two groups, it’s a true investment.
Recent studies reveal that over 68% of Gen Z consumers in Europe want personalized beauty recommendations. Clearly, beauty tech purchases are an important part of their monthly paycheck. In fact, 70% of all online beauty shoppers purchase a new product every month. And 31% of consumers shop for beauty products at least weekly.
The Social Media Effect
Despite weekly beauty top ups, consumers are still taking the time to thoroughly research products before purchasing, especially when it comes to Gen Z. Almost 50% of Gen Z shoppers carry out extensive research on product ingredients and their benefits before purchase. How? Social media seems the way to go.
Social media’s influence on beauty tech spending is obvious. Almost half of US beauty shoppers say they find new products on social media, while 46% say social media is the reason why they spend more on beauty products. Open any social media app, and you’ll see trending hashtags, new products, influencer testing videos, and in-app shopping links. It makes sense.
Some social media apps like TikTok, Instagram, and Snapchat even have built-in AI filters that let you test products there and then. It’s easier than ever to discover, try, and buy products on social media platforms. And with address and payment auto-fill options, you can buy your new beauty product in less than a minute.
Although all social media platforms are driving beauty tech purchases, one app has more influence than others. TikTok accounts for 89% of all US social media beauty purchases, followed by Instagram with 66%. Thanks to TikTok Shop and a new way of consuming video content, it’s never been easier for brands and influencers to persuade consumers to buy.
Consumer Concerns & AI Beauty Challenges
As the AI beauty tech market continues to evolve, consumers are becoming increasingly concerned about how these tools use and store their data. But beyond privacy and facial recognition, brands also face challenges around inclusivity and bias.
Virtual try-on methods and AI filters are designed to provide personalized recommendations with products that fit consumers’ skin types. What happens if these tools are not trained to identify all skin variations and colors? As consumers, we’re ever more concerned about how brands demonstrate diversity and inclusivity of ethnicities, body types, shapes, and unique characteristics. To succeed, brands must ensure the tools they create can cater to consumers’ needs and predispositions.
Mental health and self-image are also key concerns for today’s beauty consumers. Studies have shown that 21% of Gen Z consumers feel AI filters show looks that are unattainable, and 18% think AI creates too much pressure to look beautiful. Despite beauty tech’s success, it seems that we will continue to balance consumers’ concerns around self-image and societal pressures to look a certain way. Can beauty tech and natural beauty work together? We will have to wait and see.
The Future of Beauty Tech
The future of beauty tech seems to be driven by virtual reality. The market is set to grow exponentially in the coming years, with more and more consumers investing in the latest and greatest beauty technology. There’s no doubt we’ll see new beauty tech players and even more advanced tools, but this is not without its challenges.
Some of the most loved brands have already faced lawsuits around privacy and data misuse. As the market continues to expand, could we see more beauty tech companies in alleged breach of data protection laws? Even though consumers are clearly willing to pay the price of sharing biometric data in exchange for a personalized skincare routine, it still leaves us wondering if it’s really worth it. Just how much of our privacy are we willing to give away for a smart mirror that tells us we’ve got more wrinkles than we thought?