Personalization in beauty tech using AI and AR : investigating consumer behaviour and benefits of personalization in beauty

Abstract

Personalization has the potential to optimize a service for users by catering to unique needs and characteristics. The influx of artificial intelligence (AI) and augmented reality (AR) technology in the retail space has helped to re-define how customers engage with brands. Integration with brands work to improve the online and in-store engagement with consumers through a combination of data analysis and user generated responses. The purpose of this thesis was to explore the mutual benefits of personalization for the customer and the brand, what factors contribute to a successful implementation, dive deep into customer behaviour and explore the challenges associated with it. The research took a constructive approach on defining how an AI/AR online service can strategically place businesses as frontrunners in their industry. It specifically looked at which variables influence customer behaviour and how AI/AR can provide a personalized skin regime within minutes. The questions that were asked are: what are the drivers for consumer adoption of personalized solutions in the beauty industry? What is it about a personalized solution that drives a consumer to take action? The study included data sets from top beauty brands that revolved around consumer spend using the skin advisor tool, engagement rate, questionnaires, and data analytics. It investigated the technology associated with personalization and how it accommodates consumer uncertainty, preferences, and define goals. It looked at the business value gained from personalized recommendations.

The results from this study had 48 participants that spanned over six different companies. These company participants were Naos, Higher Education, Pierre Fabre, Nahdi, Shiseido, and Yonka. The study displayed a 64% positive response to the skincare advisor for personalized recommendations and a 30% lift in sales attributed to the Walgreens pilot experience.

Based on the results, it is clear that consumers are finicky and are prone to follow trends. Consumers proved to adopt personalized regimes based on the technology backing up the results and brand loyalty. Consumers as a whole are driven to products that promote health and wellness, so with the emergence of AI and AR platforms in Beauty Tech, there is high rate of consumer adoption. This thesis was able to conclude that consumers will adopt personalized regimes based on the fact that they are given fewer number of choices. Revieve was able to gain insight into consumer adoption and business.