The Health and Beauty Industry's Digital Glow Up: How Brands are Winning Online

The health and beauty industry’s online performance continues to “glow up.” Digital is expected to capture 19% of total revenue in 2024 and reach 27% of global spend by 2026.

The pandemic did nothing to slow down cosmetic consumption. Since mask mandates were lifted, ~70% of makeup wearers have returned to their previous routine. And lockdowns, changes to in-store hygiene policies and the increase in brands and retailers offering richer digital experiences have only accelerated the shift to online buying.

How are health and beauty brands evolving their digital experience to stand out in the market?

Virtual try-on

Brands and retailers are increasingly incorporating “beauty tech” into their online and in-store experiences and using augmented reality (AR) to support virtual try-on through shoppers’ own mobile phones.

Virtual try-on increases confidence in a purchase for a category that experiences high returns. Today, 43% of smartphone shoppers expect all beauty brands to offer AR, and 98% that have used AR for shopping have found it helpful. Retailers that use AR experience 19% higher customer engagement and 90% improvement in conversion rates versus those that don’t.

For example, an Infosys Equinox customer offers AR apps that use facial recognition and machine learning algorithms to superimpose color cosmetics on a user’s own face, match products to different skin tones, and even use AI deep learning to analyze skin conditions and recommend personalized skin care regimes. Integrated with commerce APIs, customers can seamlessly add products to cart, see “more like this” recommendations and more without closing the AR viewer.

“Phygital” experiences

Aside from physical retail stores, many beauty brands run temporary pop-up shops, “pop-ins” (stores-within-a-store), free-standing vending machines and even booths and kiosks. These physical experiences benefit from digital capabilities such as endless aisle (view online catalog and inventory), personalization and mobile checkout.

Beauty and CPG brands using Infosys Equinox have integrated commerce into kiosks, sales associate apps, mobile (consumer) apps and vending machines to support “anywhere commerce.”

Generative AI

To augment AR even further, brands are turning to AI GANs (Generative Adversarial Networks) to emulate skin and hair transformations (before and after) to visualize the effects of different aesthetic treatments and routines, new hairstyles and beard styles.

ChatGPT is also being used to enhance product discovery and after-sale support. Sephora and L’Oreal’s AI chatbots enable customers to ask product-related questions and receive personalized recommendations, with Sephora offering voice assistance in partnership with Google Assistant. Ulta Beauty uses ChatGPT to generate product descriptions that incorporate feedback from live customer reviews. And Glossier uses ChatGPT to enhance its product recommendations, matching them to customer interactions and preferences.

With API-driven microservices, generative AI can be embedded across the Web, mobile apps, in-store digital, and IoT devices like smart speakers, and pull live data from your catalog, pricing, promotions, customer account, loyalty accounts and more.

Hyper-personalization and loyalty

Beauty consumers are often on the search for “Holy Grail” products. When they find them, they repurchase repeatedly, and often opt to explore more from the brand or product line. But “HG status” products are highly personal – they must match an individual’s aesthetic, undertones, formula, application and ingredient preferences, skin and health concerns, lifestyles, and even personal values.

Product finders and personalized recommendations tie into consumer loyalty for both CPG brands and beauty retailers. Beauty buyers that receive personalized recommendations are 75% more likely to make a purchase. Product finders specifically are also a great way to collect first-party data in the age of disappearing third-party cookies, as are loyalty programs that reward on-site and social engagement, user generated content and purchases.

Hyper-personalization takes cross-channel and even cross-brand/retailer context into account in recommendations. It’s dependent on a 360-degree customer view, with unified data. To achieve this, beauty brands need a customer intelligence platform that can collect consumer data from first and third party sources, and harmonize them into rich customer profiles, to fill in the “gaps” of what browsers and buyers won’t tell you explicitly.

Social Influencers and Live shopping

The “beauty community” on social platforms like YouTube, Instagram and Tik Tok has forever transformed the customer journey. Makeup and skincare lovers follow their favorite content creators and use these platforms to search for videos to inspire, inform and influence their purchases.

Live streaming is one video format that is particularly engaging, and many beauty brands are using “liveshopping” events to replicate both the home shopping and live streaming experience. For example, L’Oreal, Estee Lauder, Bobbi Brown and Clinique host live streams with influencers, make-up artists and celebrities, and use live video to offer personal conversations with shoppers.

While social networks like Facebook and Instagram support livestreaming, they lack the direct-buy features of a native liveshopping solution. This means viewers have limited ways to shop, and often must visit the brand’s site outside of the app to purchase. Infosys Equinox’ liveshopping module allows any commerce service to be embedded in liveshopping experiences, for example direct add-to-cart, product search and recommendations, personalized promotions, the ability to connect loyalty points to stream participation, and more.

The metaverse

Shopping with virtual reality is one of Gartner’s top 5 emerging digital trends . The firm forecasts by 2026, 25% of consumers will spend at least one hour in the metaverse each day, and that 30% of businesses will participate in it. Today, 60% of millennials and 30% of baby boomers say they’re interested in metaverse shopping.

While consumer interest hasn’t reached its full potential yet, some early moving beauty brands like MAC Cosmetics, Too Faced, Maybelline and Charlotte Tilbury have already made inroads and created metaverse experiences, from virtual stores and events, to gamified challenges, collectible NFTs, interactive quizzes and virtual consultations and master classes.

Why beauty and wellness brands need MACH-X

Brands looking to capture phygital shoppers must make sure they don’t build siloed experiences. Navigation between digital, physical and virtual realms must be consistent, persistent and seamless, stitching the same data across all channels. Whether you expand your brand into immersive digital spaces now or down the road, only headless, API-driven commerce can close this loop.

MACH-X by Infosys Equinox is Microservices-based, API-first, Cloud-native, Headless and eXtensible commerce technology that can help you commerce-enable any digital or physical touchpoint – even for health and beauty companies with complex B2B2C requirements.

Get in touch with us at contactus@infosysequinox.com to learn more about how headless microservices can support digital commerce transformation for your health and beauty brand.