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Digital Transformation Strategy: How AI & AR is Transforming Beauty Retail

Aug 19, 2022 · 3 minutes read
NARS, Coty, Belcorp and Real Simple shares brand's experience in AI & AR digital transformation.

The concept of “digital transformation” has been an ongoing conversation since the dawn of the internet. Even if you haven’t used those exact words, you’ve felt the impact of it: with the proliferation of smartphones, increasing channels for commerce, and a rising comfortability of consumers conducting their business online, the imperative for brands to step up their digital offerings has never been more essential than it is right now.

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It’s also no surprise that the COVID-19 conditions of the past two years have accelerated this imperative. As consumers were largely confined to their homes, these remote conditions pushed a large portion of in-person commerce online. Brands and retailers that relied on those in-person, personalized experiences had to rethink their strategies. Chief among them, beauty brands, saw digital transformation as a major opportunity, and leveraged emerging technologies—particularly augmented reality and artificial intelligence—to adapt their businesses to the times.


NARS, COTY, and Belcorp shared brands’ experiences with their digital innovations.

The beauty industry is rife with digital transformation strategy success stories. Deploying creative, forward-thinking applications of AR and AI has enabled brands and CPGs to not only weather the storm brought on by the pandemic but future-proof their businesses through engaging, consumer-focused offerings across countless digital channels.

How NARS is Engaging Customers With Virtual Try-On

As any cosmetics consumer knows first-hand, the shopping process can be particularly intimidating. Makeup and beauty products rely on a customer being able to see what a product looks like on them, with their unique features and skin tones or skin types. Unfortunately, in many shopping environments both in-store and online, it’s simply impossible to try on every type of product to determine the best fit.

NARS’ Digital Innovations: Implement Virtual Try-On Across a Wide Range of CategoriesContact Perfect Corp.

With advances in AI and AR, the digital transformation occurring in the beauty industry is revolutionizing how consumers are able to shop for cosmetics. NARS Cosmetics, a French cosmetics and skincare company, is one of the brands leading the charge in implementing this new digital interface to adapt to the changing needs of their customers.

“We use AR and AI because it’s just a fundamental tool that every brand must have today to be able to be considered a global brand and a big player in dot com,” says Julia Sloan, Deputy General Manager of Global Marketing at NARS.

NARS has implemented virtual try-on (VTO) across a wide range of categories, including foundation, eye, and lip products. Enabling customers to see how different beauty products work for them has helped drive engagement and sales; it isn’t just a fun gimmick. After implementing VTO, NARS has observed measurable, tangible results.

“In the first two months, we saw over 50,000 consumers engaging with this tool,” Sloan says.

NARS leveraged Virtual Ty On and get +350% in conversion rate.Contact Perfect Corp.

One of the major success stories was NARS’s VTO tool for their lip category. Consumers used the tool at astronomical rates, virtually trying on, on average, 27 different shades. And these virtual try-ons converted to sales: the brand’s year-to-date color VTO conversion rate was +350% compared to their site average.

“When you think of digital acceleration, it’s about making that consumer journey online easy and frictionless so that they can purchase when they’re trying on makeup,” Sloan says.

Coty Creates Immersive, Personalized Shopping Experiences Through AR & AI

Coty, Inc. has a massive footprint across the beauty industry, with controlling interests in more than 75 brands across the cosmetics, nail, and skincare spectrum. Each of these brands is unique, and requires an individualized approach to digital experiences.

Coty’s Digital Innovations: How Sally Hansen Creates Personalized Experience for ShoppingContact Perfect Corp.

As with all beauty care products, the customer experience is highly personal. And for brands with dozens or hundreds of offerings, it can be a challenge to connect the right product to the right customer. Particularly in a predominantly digital shopping environment, those personalized experiences can be difficult to capture.

One of Coty’s marquee brands, Sally Hansen, boasts a catalog of hundreds of different nail polish colors and types. Creating a personalized experience where a customer can try on nail polish before purchase used to be a major challenge for brands; if you’ve ever been to a drug store with a cosmetics counter odds are you’ve seen stripes of nail polish on a countertop as customers attempt to get a better idea of the polish’s characteristics.

By partnering with Perfect Corp., Sally Hansen was able to develop a virtual try-on interface using AgileHand™ technology. Through AR and AI, Sally Hansen’s VTO creates a truly personalized experience for customers; there is nothing more personalized than someone being able to see a shade on their actual nails with their exact shape and skin.

Sally Hansen increased 100% in time spent in product pages and 110% add to bag rate with Virtual Try On.Contact Perfect Corp.

After instituting this advanced VTO engine, Sally Hansen was able to increase time spent on product pages by 100% and increased add-to-basket rates by 110%.

This engagement is great for sales, but it’s also a powerful tool for future omnichannel efforts. The data that comes in through VTO enables Sally Hansen to drive better personalization and outreach going forward and creates a full 360-degree approach to customer engagement across countless consumer channels.

For Belcorp, Technology is a Perfect Match for its Digital Transformation Strategy

As an industry, beauty and cosmetics are required to be on the cutting edge of technology. With young audiences that are highly engaged in emerging social platforms, beauty needs to be in a constant state of innovation to connect to those customers. Modern consumers expect beauty tech to provide a level of personalization and connection to make informed purchasing decisions.

Belcorp's Digital Innovation: Use Virtual Try On to Collect Data and Further Optimize the Customer ExperienceContact Perfect Corp.

Belcorp, a leading global beauty conglomerate, leverages AI to provide those personalized experiences for their customers across channels. As brands continue to create and deploy engaging VTO engines, it in turn creates stores of actionable data that can be used to further optimize the customer experience. By centering the shopping experience on the needs of the customer and working from there, brands are able to connect to consumers in new and unique ways to drive engagement and ultimately sales.

“We have to go to the next level in terms of experience and personalization,” says Venkat Gopalan, Chief Digital, Data, and Technology Officer for Belcorp. “How do I integrate the data and behavior of the consumer to drive a personalization engine that can actually give a seamless experience across all channels.”


Belcorp uses virtual try on to create actionable data and optimize customer services.Contact Perfect Corp.

Digital Transformation Strategy: Bringing Beauty Tech to the Next Level

The insights and digital learnings that can be mined from a highly engaged consumer base are a win-win for beauty brands and customers alike. Beauty tech is enabling brands to provide optimized experiences, and consumers are able to make informed decisions about products that serve as important expressions of their own personalities and identities.

As the world moves more into the digital realm—whether that be in the Metaverse or on emerging gaming platforms—beauty tech will play a key role as it seizes on the opportunities provided in those spaces. The foundations being laid through virtual try-on and other AR and AI deployments have immense potential to translate to these digital environments in compelling and unique ways.

While there will be newfound challenges in these spaces—from privacy and security to digital identity and equity—beauty tech can serve as a catalyst for innovation as digital transformation strategy continues to evolve and impact more and more of our daily lives.

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