Current State of AI in the Beauty Sector
A 2025 McKinsey report estimates that generative AI could add $9–$10 billion to the beauty industry. The analysis warns that AI will widen the gap between fast-moving brands and those that lag. Companies that adopt AI quickly will gain market share, while slower ones may struggle to compete.
AI is becoming a key competitive advantage. Startups use advanced algorithms to deliver hyper-personalized products and engaging digital experiences. Brands are responding by acquiring AI startups or building in-house data science teams. This race is driving rapid innovation across the industry.
For consumers, AI means more personalized and convenient beauty solutions. Customers are seeing apps and websites that provide instant recommendations and new experiences. AI-powered advisors are already emerging.
The next step could be systems that grasp emotions, lifestyle factors, and unique skincare needs. Experts predict that AI will soon map facial features and external conditions, like climate and diet, to offer even more precise suggestions.
AI is also changing product development. By analyzing large-scale consumer feedback, it identifies unmet needs and emerging trends. This insight helps brands create products that perfectly align with customer demand.
AI in Skincare & Skin Health
Thanks to AI, customers can now analyze skin conditions instantly using a smartphone camera or smart device. Tools act simply like a “virtual dermatologist”. It can scan for issues like wrinkles, dryness, or acne and recommend the right products.
AI is also transforming personalized skincare formulas. The demand for AI-powered personalization is growing. Data shows that 75% of consumers are willing to pay more for skincare made just for them.
Beyond skincare routines, AI is impacting how new ingredients are discovered. Traditional testing is slow, but AI can screen millions of molecules in record time. This discovery process allows brands to create more effective and science-backed products. Without relying on outdated, costly, and lengthy testing methods.
AI in Cosmetics & Makeup
AI is changing the makeup industry by improving product creation and the shopping experience. Virtual try-on tools, powered by AR and AI, let users see how the makeup looks on their face in real time.
Beyond shade matching, Gen AI helps brands create new color palettes, test pigment blends, and speed up product development. In terms of retail, chatbots and advisors act as virtual beauty consultants, helping customers find the right products.
Live AI filters take this further, allowing users to test makeup dynamically, with effects adjusting as they move. Studies show that consumers are 1.5× more likely to recommend a brand when they engage with these interactive AI tools.
However, the biggest challenge for brands developing custom AI solutions is DATA. Data is the golden fuel behind every algorithm. AI training requires large, diverse datasets, but collecting this data can be difficult.
💡One smart approach is branded AR filters on social media. This will not only attract users but also provide valuable training data to improve AI accuracy.
💡One smart approach is branded AR filters on social media. This will not only attract users but also provide valuable training data to improve AI accuracy.
AI in Fragrances
AI is changing the way perfumes are made. It replaces slow, manual processes with intelligent automation and deep data analysis. Traditionally, perfume formulation relied on skilled perfumers, years of experience, and extensive testing.
Now, generative AI can analyze massive scent databases and create unique formulas in seconds. This way the fragrance development process is faster and more efficient.
Now, generative AI can analyze massive scent databases and create unique formulas in seconds. This way the fragrance development process is faster and more efficient.
AI is also can make fragrances more personalized. At CES 2024, YSL Beauty introduced “Scent-Sation”. This is a headset that tracks brainwave responses to different scents and recommends a perfect match. Brands can use AI-powered neuroscience to understand preferences and make more precise recommendations.
This shift has major implications for the industry. What was once a niche luxury—custom fragrance creation—is now accessible to a wider audience. However, this also raises questions.
Will AI support traditional perfumers or gradually reduce the need for human expertise in scent creation?
Will AI support traditional perfumers or gradually reduce the need for human expertise in scent creation?
One thing is pretty clear: AI isn’t replacing creativity - it’s expanding it.
Wondering how AI enhances customer touchpoints in beauty?
Discover in our latest article: How the Beauty Industry Uses AI to Boost Sales
Wondering how AI enhances customer touchpoints in beauty?
Discover in our latest article: How the Beauty Industry Uses AI to Boost Sales
AI-powered Beauty Devices & Tools
AI is making at-home beauty treatments smarter and more precise. Devices like Armani Beauty Meta Profiler use 18 sensors to scan skin for texture, hydration, and smoothness.
Based on the results, it applies custom microcurrent and LED therapy tailored to the user. Similarly, Medicube’s Booster Pro offers clinical-grade skincare without a salon visit.
Based on the results, it applies custom microcurrent and LED therapy tailored to the user. Similarly, Medicube’s Booster Pro offers clinical-grade skincare without a salon visit.
Beyond treatments, AI-powered beauty tools now offer real-time guidance. Beauty technology is moving toward fully automated, expert-level treatments at home.
One of the trends in beauty tech is the rise of dedicated mobile apps for smart beauty devices. These apps use AI and IoT to analyze skin and hair in real time. Then app offers personalized regimens, product recommendations, and progress tracking.
They sync with beauty tools to collect data and suggest the best products based on individual needs. For brands, this drives cross-selling, loyal customer relationships, and higher value-added service.
They sync with beauty tools to collect data and suggest the best products based on individual needs. For brands, this drives cross-selling, loyal customer relationships, and higher value-added service.
