The Present of Cosmetics in America is being driven by Hi-Tech

Technological innovation is reshaping the beauty industry in the U.S.

Big tech companies are joining forces with major beauty brands to revolutionize the U.S. beauty sector

With a flurry of mergers, acquisitions, and collaborations focusing on digitalization over the past year in America, the beauty industry increasingly resembles Silicon Valley. The method for selecting the right serum for one's skin type or the most suitable foundation shade now seems like something out of a science fiction film.

Artificial intelligence can analyze and understand a face in just two seconds, discerning its current and future needs, and soon, even its desires. The aim is to further personalize the beauty experience: smartphone skin check-ups, ordering cosmetics with a selfie, and choosing lipsticks via apps are all becoming commonplace. The digital revolution in the American beauty world is just beginning.

Key Factors

• Technology and cosmetics: a rapidly growing combination is taking place in the American beauty industry, not only in product development but also in new hi-tech services and tools offered to U.S. consumers;
• For a beauty brand to successfully create hi-tech cosmetics, it's not necessary to implement the most advanced technology into products, but instead, focus on tailored solutions that best interpret the specific needs of a particular brand's consumers;
• Brands must decide whether to implement new technologies internally or find an external partner, a decision that should be based on long-term objectives.

The combination of technology and cosmetics is shaping the beauty consumer experience: from augmented reality to remote cosmetic evaluation, to machine learning

Beauty brands increasingly resemble hi-tech companies, with internal technology incubators, artificial intelligence capabilities, and more. L'Oréal was among the first to become a smart company in 2018 when it acquired Modiface, a technology company specializing in augmented reality. Since then, the trend toward digitalization in the beauty sector has been continuously growing.

In the past year, Il Makiage, the fastest-growing Israeli cosmetics brand in the United States, acquired the advanced computer vision technology startup Voyage81 to apply its patented hyperspectral imaging systems to enhance the company's machine learning capabilities, continuing its commitment to innovate and revolutionize the beauty and wellness sector in America. Ulta Beauty has invested in the retail technology company AI Adeptmind and launched a new partnership with Google to improve its virtual try-on service. Estée Lauder has rolled out AR try-on across its product range, and Clinique has built a beauty lab in the metaverse to promote a new serum. Just last week, L'Oréal announced a partnership with Verily, the precision health company of the Alphabet group, to advance skin health, to conduct two new studies on skin issues and explore the development of new products. Dior's beauty division has been using a professional diagnostic tool called the Dior Skin Scanner for over a decade. This miniaturized technology identifies skin tones and suggests the most suitable product shade for each individual. It is now also being introduced in select stores for direct consultations with customers during purchases.

From Big Brands to Niche Markets: Hyper-Personalization is Key

Initially, high-tech applications in cosmetic research were centered on product development, such as skincare solutions that strengthen the skin's microbiota created by Orveda (a luxury beauty brand owned by Coty) or patented molecular hair regeneration technology by Olaplex. Today, hi-tech beauty encompasses groundbreaking technologies like augmented reality (AR) and artificial intelligence (AI), enabling hyper-personalized experiences — from tailored products to beauty devices that analyze customer needs in detail.

The Role of Consumer Electronics in Beauty

"When we first attended the Consumer Electronics Show, there were no beauty companies. Now, there are many," said Guive Balooch, head of L’Oréal’s Technology Incubator. The integration of beauty and technology is shaping the U.S. beauty sector, leveraging databases to improve accessibility. The pandemic further accelerated the adoption of digital channels and virtual product trials.

Virtual try-on technology has become mainstream in the U.S. beauty market. For instance, Perfect Corp’s AR Virtual Makeup Try-On matches five ideal combinations for a user's face and product preferences in just 20 seconds. AI tools like the AI Face Analyzer assess over 70 facial traits to offer personalized recommendations, while the Skin Analyzer maps 14 skin conditions in two seconds using advanced deep learning algorithms. Innovations like HiMirror and Venus, an Alexa-connected smart mirror, evaluate wrinkles, pores, and skin luminosity while providing personalized advice. Venus even won an Innovation Award at CES in Las Vegas.

Building a Hi-Tech Ecosystem Around Products

"Hi-tech beauty isn’t just about product formulation anymore," said Sampo Parkkinen, CEO and co-founder of Revieve. The focus is on creating a technological ecosystem that enhances the consumer experience. Virtual try-ons are now an essential tool for U.S. beauty brands, but advanced beauty tech isn’t suitable for all. Brands need to understand their customers' unique needs and continuously experiment and innovate.

Integrating Advanced Technologies into Everyday Use

Balooch further explains how Verily is collaborating with L’Oréal to leverage the latter’s extensive skin databases alongside Verily’s cutting-edge technologies. Similarly, Dior has introduced the Dior Skin Scanner to retail stores, offering customers direct, tech-assisted consultations. Additionally, L’Oréal’s wearable UV sensor for La Roche-Posay monitors UVA and UVB exposure, providing personalized recommendations through an app.

AI tools like Perfect Corp’s Skin Analyzer, validated by dermatologists, create detailed face maps within seconds, analyzing conditions like acne, wrinkles, and oily skin. Smart mirrors like HiMirror and Venus combine AR technology with interactive features, helping consumers understand and enhance their skincare routines.

Adapting to the Changing Beauty Market

Prama Bhatt, Chief Digital Officer at Ulta Beauty, highlights the importance of tailoring technology to enhance customer experiences. "Brands must identify what they represent and the kind of experience they want to create for their customers," Bhatt explains. Technology should address specific challenges, such as finding the right skincare regimen or foundation shade, rather than existing as a standalone feature.

Companies like Ulta Beauty have acquired AR and AI startups, such as QM Scientific and GlamSt, to stay competitive. Meanwhile, L’Oréal’s acquisition of Modiface underscores the strategic importance of internal technological development.

The Future of Hi-Tech Beauty

Despite the rapid pace of innovation, many hi-tech beauty applications are still in their early stages. The UV sensor developed by L’Oréal, for example, aims to improve understanding of skin health issues like melanoma, ultimately driving better product development.

As technology becomes integral to the beauty industry, executives must develop tech-savviness alongside their expertise in products and consumer behavior. Balooch emphasizes that "the potential for innovation in hi-tech beauty is limitless," predicting that services will increasingly complement products to create holistic beauty experiences.