According to a report by AI beauty platform Arbelle, the global AI beauty market will be valued at $2.68 billion in 2022, growing at a compound annual growth rate (CAGR) of 14.4% and reaching approximately $6.8 billion by 2027. It is predicted that.
In line with these growth predictions, Alice Chan, founder and CEO of Perfect Corp, said in an interview with CosmeticsDesign that in 2025, the integration of artificial intelligence (AI) and augmented reality (AR) technology will transform the beauty industry. We predicted that the world would be transformed and hyper-personalized services would be provided. Deliver experiences, streamline product development, and bridge the gap between physical and digital retail.
We asked Chan for her insights and predictions on how these technologies will shape the future of cosmetics and personal care in the coming year.
AI assistant redefines customer interactions
Chang emphasized that AI assistants and chatbots will play a key role in shaping the future of beauty retail. “AI-powered chatbots can guide consumers to make product choices based on everything from general product preferences to skin type and specific concerns, with each interaction unique to each consumer. to ensure that it is individually tailored to the needs of each person,” she said.
These tools evolve into sophisticated virtual beauty advisors that can provide 24/7 guidance. “They will be able to understand and respond to complex beauty questions, such as concerns about specific skin conditions, ingredient sensitivities, specific makeup methods, etc.,” Chan explained. .
The impact of AI will also extend to product innovation. “They will play an important role in beauty brands’ product development and testing,” Zhang added.
“Brands will use AI to analyze consumer feedback, identify emerging trends, and simulate how new products will perform on different demographics and skin types.”
The power of unique AI models
Proprietary AI models provide beauty brands with a unique competitive advantage as they can be customized to industry nuances, Chan explained. “Unlike generic models like ChatGPT, our proprietary AI can be fine-tuned to understand nuances in beauty product formulations, skin types, cosmetic trends, and consumer behavior,” she said. said.
Perfect Corp.’s MakeupGPT and SkincareGPT AI assistant frameworks are examples of this customized approach. “These tools will help transform the consumer experience in beauty, providing consumers with personalized and detailed beauty advice in real-time,” said Chan.
Despite these benefits, implementing your own AI can be difficult. “For our proprietary AI models to work accurately, we rely heavily on high-quality and diverse data about consumer preferences, skin types, product efficacy, and beauty trends,” Zhang explained.
She encouraged brands to “partner with dermatologists, beauty influencers, and even academic institutions to collect a wide range of diverse and representative data.”
Cost is also a hurdle. “Developing your own AI is expensive and involves costs for AI experts, data scientists, hardware, software, and cloud services,” Chan acknowledged.
However, brands can also start small. “Beauty brands can implement small-scale projects or leverage pre-built AI platforms that can be customized to their needs, such as PerfectGPT, Perfect’s new AI beauty assistant. “This is our first foray into AI,” he said.
Addressing “non-impact” with AI
The “de-influence” trend, where consumers reject products endorsed by influencers and prioritize authenticity, is reshaping beauty marketing strategies. “Consumers are becoming increasingly aware of the motivations behind influencer content and are pushing back when they realize they are endorsing products that don’t truly meet their personal needs,” Chan said. .
AI provides a solution by helping consumers make informed and sustainable choices. “Personalization provided by AI helps shoppers find what they actually need, rather than being stuck with paid promotions from influencers for products that may not meet their unique needs.” he explained.
Chang also pointed to the role of AI in sustainability. “AI-powered virtual try-on allows consumers to virtually ‘try on’ makeup, skin care, hairstyles and colors before making a purchase decision, reducing the likelihood of purchasing ineffective products and reducing returns. and product waste. ” she said.
Seamless shopping across platforms
Chang emphasized the importance of integrating AI and AR tools to create a seamless consumer shopping journey across online, in-store, and social platforms. “With AR, consumers can be more confident whether they are shopping on a brand’s website, in-store via an interactive mirror, or making a purchase via a social media platform. But you can virtually try out beauty products like makeup, skin care, and hair color,” she explained.
This technology also improves the in-store experience. “In physical stores, AI-powered AR mirrors can provide a personalized beauty experience by suggesting products based on the customer’s face shape, skin tone, and personal preferences,” Zhang said. states.
The future of social commerce will further bridge the gap between browsing and purchasing. “Social commerce will become an even more central part of the beauty shopping experience,” Chan said.
“By integrating shopping functionality directly within platforms like Instagram, TikTok, and even YouTube, we allow consumers to make purchases without leaving their social feeds,” she added.
Promoting product development using AI and AR
“AI can help brands make the leap from a reactive to a proactive approach when it comes to product development,” said Chan. “Consumer data is not only pervasive, but also supports the formulation of products that are tailored to individual tastes and needs.”
AR adds a new layer of innovation. “AR allows product designers and consumers to ‘test’ different formulations and designs without waiting for physical samples to be manufactured,” Zhang explained. .
This feature allows for rapid prototyping and iteration, shortening product development cycles in line with consumer preferences.
Roadmap for the future
Chan urged beauty brands to adopt data-driven strategies to remain competitive in 2025 and beyond. “My advice to beauty brands is to leverage the power of AI and data analytics to deeply understand their customers,” she said. “The future of beauty lies in personalization, including product recommendations, shopping experiences, and even skin care regimens.”
As the industry moves forward, Chan emphasized the importance of remaining adaptable. “The key is to remain agile, data-driven, and deeply connected to customer needs and values, while continually adapting to the technological advances that will shape the beauty industry in the coming years. “That’s it,” she concluded.
