A-Commerce: the new e-commerce for the beauty industry?
Even though bricks and mortar retail has been the first retail channel for beauty purchases, digitalisation might be about to change this.
Indeed the growth of e-commerce might have had an impact on retail sales in the beauty sector but not significantly as beauty products need to be tried on, smelled, and tested before a purchase.
However, a-commerce (augmented commerce) might be the answer for the beauty & tech savvy, without compromising on their retail experience.
If you look closely at the numbers, gen Z is the next generation that will shape the beauty industry, with an actual of $368 spent annually by female Gen Zers, which shows an 18% increase year-on-year and with Gen Zers spending overall 9h/day online, things will change inevitably.
Far from phygital (with digital and AR implemented in stores) in retail spaces such as Sephora, MAC or Tom Ford Beauty, there is a new way to see augmented reality in the purchase process,with a-commerce (augmented commerce) becoming the soon-to-be new e-commerce.
With this in mind, let’s dig a little on how brands and big beauty groups are taking up this new challenge and let’s mainly focus on one of the beauty leaders: L’Oréal.
In 2018, digital business at L’Oréal was at 40,6%, but in 2019, with the rise of the 5G technology, our smartphones getting smarter and real-time applications the shift to a-commerce has definitely started.
It all started in 2014 with the launch of Makeup Genius, an app that would enable customers all over the world to try out makeup thanks to AR (Augmented Reality), definitely changing the way customers would approach e-commerce. After this, there was no need to go to the store to try out the new lipstick shade, you could get it from your personal comfort of your sofa, after even trying it out and see if it would fit your skin tone!
In 2018, with the acquisition of Modiface, L’Oréal started its second digital transformation. With it, customers could overlay products as if they were trying their own skincare/makeup routine, having has a result, simplified the customers’ purchase journey.
With Modiface, the “Because you’re worth it” group developed an algorithm analysing selfies, finding the first signs of ageing and then make a recommendation to customers on which products they should use, making it a very personalised experience for the app users.
Looking to other brands, the massive group that is CoverGirl in the US has partnered with Holition, Beamly and Walmart to create a tool to try on full makeup looks without even downloading an app.
AI as the next step?
With A-Commerce being at our doorstep, we can only think of what will come next. With AI product development processes, machines can actually develop fragrances, after evaluating all fragrances that are in the market, to AI makeup campaigns, to — in order to end the loop — Perso, a tool that makes personalised day cream, foundation and lipstick according to the customer’s environment, skin type & skin tone.
With the development of A-Commerce, brands need to adapt to this new way of buying for their new target customers that is Gen Z. This new e-commerce by far increases sales for the brands that develop it, making the path easier to customers and definitely improving conversion rate to their platforms.
About this article
This article has been written by a student on the Grenoble Ecole de Management’s Advanced Masters in Digital Business Strategy. As part of a content creation assignment, students are given the task of writing articles based on their digital interests and disseminate the articles online. Articles are marked but we make minimal changes to the content. Thanks for reading! James Barisic, Programme Director, MS DBS.
