Augmented reality has evolved from gimmick to business opportunity for beauty brands, and technology providers are reaping the benefits.
In its three years of existence, augmented reality app YouCam Makeup and its parent company Perfect Corp. have acquired 600 million global users, $25 million in Series A funding and beauty industry partnership deals with brands like Estée Lauder and Ardell. Its augmented reality tool — which allows users to insert their own avatar into a digital interface, à la Snapchat filters, and then try on different makeup products — is increasingly becoming mainstream technology in the beauty industry.
For now, YouCam’s beauty partners have three potential ways of integrating augmented reality technology: Brands can make their own websites and apps AR-compatible, they can incorporate their products into the YouCam Makeup app, or they can incorporate the technology in their own in-store hubs that correspond to the products available in real time. According to the company, YouCam users are 1.6 times more likely to purchase cosmetics than a beauty consumer who hasn’t downloaded the app. They also spend more: YouCam users drop 2.7 times more money on beauty products than non-users.
As users catch on, YouCam and Perfect Corp. are finding ways to move their tech forward, and their strategy hinges on recruiting a wide range of beauty partners. Wunder2, which sells a line of makeup and skin-care products, recently worked with YouCam to develop augmented reality-powered try-on technology for its e-commerce site. After connecting to their mobile or desktop camera, users can apply beauty samples over a live selfie. Perhaps even more valuable, the partnership means YouCam app users now see Wunder2 products among the in-app virtual try-on options.
“We did some analytical research and saw that, during the customer journey on our website, there was some confusion and hesitation when it came to actually choosing [product],” said Wunder2 CEO Agnes Hjelmer. “We are confident that by using the YouCam functionality, we can increase our conversions.” The website technology has been live since June 15, and Hjelmer says the brand is “already seeing results” in its foundation category but did not share specifics.
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Augmented reality is a growing sector in the beauty industry, with companies like ModiFace, MeiTu, MemoMi and Holition working in the space. ModiFace has powered technology for brands like Sephora, Smashbox and Covergirl, and was acquired by L’Oréal for an undisclosed amount earlier this year. With ModiFace locked in as part of L’Oréal’s Digital Services Factory, YouCam has been able to swoop in on other leading brands like Estée Lauder.
Estée Lauder began its partnership with YouCam in early 2017 and rolled the technology out globally in July 2017 after what Estée Lauder’s vp of global consumer marketing, Tricia Nichols, said was a “very positive response.” Estée now has 2,200 YouCam-powered tablets in stores in 28 countries, which can be self-navigating or beauty-adviser assisted. On average, customers try on 14 lipsticks shades per session, said Nichols. Currently, YouCam uses 100 points of tracking on the face for facial recognition and skin-tone matching. Its technology can recognize the role of lighting and recommend products for users’ specific skin types and concerns.
“With this data, ability for us to build better, more personalized experiences in the future is boundless,” said Nichols.
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To establish its beauty partnerships, YouCam approaches or is approached by potential beauty industry partners, said YouCam’s vp of marketing, Adam Gam. “We have lots of case studies and examples, which make brands like Wunder2 want to work with us,” he said. “We also look for brands that are innovative, savvy and definitely cutting edge.” The app’s user base is 90 percent female and 80 percent millennial, a holy-grail demographic crossover for retailers. Gam said YouCam seeks out brands and products that will appeal to this existing consumer base.
As app and site-based partners continue to sign on, YouCam expects more growth on the retail side. Macy’s and Target have both gone the in-store route. At Macy’s, YouCam powers virtual try-ons from NYX, Tarte, Benefit and other in-store products. In lieu of having users wait for an available beauty salesperson or test and remove lipsticks and other products, the in-store technology allows users to try on, as YouCam states, 30 shades in 30 seconds. The customer can then buy the product in-store and take it home immediately, instead of waiting through the online shipping process.
According to Gam, in the near future, consumers will be able to walk into a store, and the in-store technology will be able to identify and recommend products they’ve tried on virtually before.
“Three years ago, everyone was talking about Pokemon Go and not understanding the difference between augmented reality and virtual reality. Now, we’re at a place where everybody understands AR and filters,” said Gam. “You’re going to see AR incorporated into all kinds of shopping situations.”
But as the industry looks to scale a technology so personal, there will be road bumps. Data privacy, for instance, is an ongoing concern.
According to Gam, Perfect Corp. is just as concerned about privacy as its user base: “Data privacy is extremely important to us,” he said. “We work with all our brand partners to be sure that data is secure and isn’t released for any other purposes.”
