Augmented Reality Gets Hot at L’Oreal, Other Cosmetic Corporates
Beauty companies are progressively transforming into tech companies, and L’Oreal’s latest acquisition of an augmented reality and artificial intelligence company last Friday highlights the increasing investments in the AR space.
ModiFace, the Canadian AR and AI company, will become a part of L’Oréal’s Digital Services Factory, which designs and develops digital services for the group’s brands, L’Oreal said in a press release. ModiFace’s technology can provide mobile apps the ability to allow users to virtually try on different makeup styles, hair styles and colors, and its tech has powered apps with cumulatively 100 million total downloads as of 2016, according to TechCrunch.
Lubomira Rochet, chief digital officer of L’Oréal, in a recent interview with Glossy, said the acquisition marks the next phase of L’Oréal’s digital growth plan, with a focus on investing in research and development after concluding a recent overhaul of its e-commerce and marketing strategies.
“This is the first non-beauty brand the company has acquired, and it’s a very important moment in our digital transformation,” she said. “Digital technology is completely reshaping the beauty industry and having access to new technologies and innovative players will be a huge competitive advantage.”
L’Oreal previously developed the AR app Makeup Genius and invested in Founders Factory and Partech Ventures, which work with and invest in AR beauty companies, respectively. Other brands and companies that have jumped on the AR app bandwagon include Urban Decay, Sephora, Ulta, Covergirl, Benefit Cosmetics, and Elizabeth Arden with the YouCam app. YouCam already has L’Oreal as a partner and raised a $25 million Series A last October. CyberLink Corp., a Taiwanese multimedia software company, participated in the round, as well.
According to a 2016 Demandware study, 72% of US beauty brands are testing a form of “guided selling” to push sales — including Snapchat lenses and augmented reality. In another 2016 study, Gartner predicted that by 2020, 100 million customers will shop via augmented reality.
“Every person has a very particular and specific way that they feel about beauty,” said Guive Balooch, global vice president at L’Oreal and leader of the company’s technology incubator, in an interview unrelated to the acquisition. “I think that provides an enormous platform to innovate, and that’s why we’re at a very exciting inflection point where technology can provide value–like the ability to use technology to coach, to allow ability for people to virtually try products, like with the augmented reality we see today,”
L’Oreal did not disclose financial details of its ModiFace acquisition and was unable to respond to requests for comment by presstime.
