Luxury skincare growth is fueled by Gen Z’s increasing use of e-commerce and tech
31 Oct 2022 --- The adoption of luxury skincare products is driven by the widespread use of digital technology, primarily due to Gen Z’s internet savviness and higher adoption levels of e-commerce platforms, finds an India-based study.
“The high-end beauty and skincare sector is expanding. However, for luxury skincare companies to benefit from this expansion, marketers must stay on top of global skincare trends and evolving customer expectations,” the researchers advise.
The paper, published in the Journal of Positive School Psychology, aimed to understand luxury consumers’ functional, hedonic and social values and how technology – particularly, fashion apps – affects their purchase intentions of luxury skincare products.
Taking the COVID-19 pandemic’s influence on physical stores into account along with the increasing digitization of the world, the research suggests that aside from being an important sales channel, digital technology may also help companies adapt their cost structures and improve the speed and cost-effectiveness of each step in the value chain.
“All of this points to a widening digital gap. Even before the crisis, digitally and analytically mature companies beat rivals that had not developed strong digital and analytic capabilities. The COVID-19 issue has increased the gap between leaders and laggards in the sector,” the researchers add.
The research highlights using AI and AR in the beauty industry to provide customer assistance.
Adopting tech for personalized products
Technology adoption is heavily influenced by a person’s ability to innovate, as well as their performance expectations, effort expectations and social impact, the report details.
The researchers interviewed 250 female respondents from diverse backgrounds from the National Capital Region of India to study the influence of online apps on the adoption of luxury skincare products. The impact of value addition, convenience, price and saving and information on the adoption of luxury skincare products was also studied.
“The internet has profoundly altered customer notions about convenience, speed, pricing and product and service information since people increasingly choose easier ways to acquire brands and access shops,” observe the researchers.
Luxury skincare market
According to the report, skincare is the fastest-growing segment in the beauty industry.
“When it comes to sales, skincare goods had a 13% rise in the US last year, while cosmetics only saw a 1% increase. Online beauty stores had a 24% rise in sales over that period, with skincare taking the lead,” the study informs.
The trends contributing to the success of luxury skincare are a growing desire for health-promoting and self-care products, an increased interest in regimens and routines and the ability of social media to empower and inform consumers more quickly.
Additionally, the power of new technology to simplify the tough choices that consumers face regarding skincare has been highlighted as the “most important” contributor.
Digital technology may also help companies adapt their cost structures and improve the speed and cost-effectiveness of each step in the value chain.
Technology-driven skincare
The research highlights using artificial intelligence (AI) and augmented reality (AR) in the beauty industry to provide customer assistance.
The study spotlights the use of AI by the beauty giant L’Oréal as a case. Lancôme, a premium subsidiary of L’Oréal, scans the skin using custom-made equipment – Opens Overlay – to discover the ideal color match for its foundations. Customers may have their foundation blended in-store at Lancôme beauty counters, with a proprietary algorithm selecting the most suitable shade from hundreds of options.
Furthermore, virtual advisers are being used by more skincare companies and stores, including Sephora, Kiehl’s, Vichy and Bobbi Brown. It enables consumers to talk directly to companies in real-time, disclose their wants and problems, suggest products and assist them through the sales process.
Edited by Radhika Sikaria
