AI is altering the face of magnificence: Tech serving to business stalwarts sustain with developments

The beauty industry is booming – as it tends to when the economy hits a ugly patch. But this time, the sector’s biggest names such as Estee Lauder and L’Oreal are deploying artificial intelligence to ensure they survive, thrive and innovate.

The willingness of women to spend on cosmetics when times are tough has been dubbed the ‘lipstick effect’ – the theory being that consumers still buy small, affordable luxuries in a downturn.

In today’s £525 billion-a-year global beauty business, it’s now more known as the ‘Nvidia effect’ since it is this American tech titan’s systems that power the AI transforming the sector.

Essentially, the revolutionary technology is enabling beauty giants to get products into stores more quickly. The time it takes to develop a perfume can be cut by 30 to 50 per cent while new moisturisers can now be made in months not years.

It also allows beauty giants to keep up with the latest trends such as ‘K-Beauty’, which promotes South Korean skincare.

Carolyn Bell, manager of Stonehage Fleming’s Global Best Ideas fund, which invests in L’Oreal, said: ‘When ‘glass skin’ – that is the craze for a translucent and poreless look came out of South Korea – L’Oreal was able to tilt its existing products to fit in.’

Pioneering: Kendall Jenner promotes L’Oreal, whose brands include Garnier and Lancome

The less flawless ‘cloud skin’ style is rumoured to be supplanting ‘glass skin’ – underlining why the beauty sector is making the most of AI to stay relevant to a much wider age-range of consumers than before.

Women born between 1946 and 1964 typically only began to apply cosmetics and creams after their 18th birthday. Today an interest in skincare can start as early as eight, according to a US study, due to the controversial rise in child influencers on social media.

L’Oreal, established in 1909 and is promoted by model Kendall Jenner, announced it was partnering with the world’s biggest company Nvidia, which is just 33 years old, last June. However, this is just one of the link-ups now happening between cosmetics conglomerates and Silicon Valley ‘newbies’.

The 80-year-old US group Estee Lauder, whose ranges include Clinique and Jo Malone, is collaborating with Microsoft and OpenAI, owner of the ChatGPT bot.

And Unilever, which is spinning off its food division to focus on beauty, has struck a deal with Google Cloud.

L’Oreal, whose brands include Garnier and Lancome, began its Nvidia partnership in marketing. Now it is moving into the lab.

‘Nvidia’s Alchemi innovation tool superpowers the skills of L’Oreal’s 4,000 scientists, speeding up research,’ Bell said. ‘AI cuts costs.’

Last week L’Oreal reported its strongest quarterly sales in two years. The firm, which is quoted on the Paris stock exchange, attributed this to the ‘lipstick effect’.

And earlier this month UK firm The Beauty Tech Group hailed a ‘transformational year’, highlighting demand for its £400 LED masks that treat skin problems.

Its boss Laurence Newman said the company works with Manchester University’s School of Dermatology to harness AI and gain insights into different types of skin and hair, and how devices can adapt to the varying needs.

He added: ‘For the moment, we are using AI to better understand insights which helps in decision-making. But in the future, we will be using AI to sort through the results of clinical studies to make sense of where devices do and do not work.’

The increase in AI adoption among UK, US and European companies seems to have been spurred by the extraordinary boost that AI has provided to the corporate stars of K-Beauty, such as APR.

The firm’s share price has soared by more than 500 per cent over the past year, thanks largely to its Medicube AGE-R devices.

These gadgets, evolved with the assistance of AI, and promoted on TikTok by Kardashian clan member Kylie Jenner, aim to maximise the efficacy of skincare. Some 6 million have been sold to date. And the latest models even incorporate an AI mode that analyses the condition of your skin.

Shares in another K-Beauty firm Amorepacific are 15 per cent up on a year ago as it embraces AI to create creams and devices. The firm has an app on the ChatGPT platform that allows users to compare products and receive personalised recommendations.

Its shops offer AI labs where robots mix bespoke creams, foundations and lipsticks, which are again tailored to customers’ skin.

K-Beauty’s spectacular rise came as a result of publicity over bizarre natural ingredients in its creams, such as bee venom, salmon sperm and snail mucin.

But, in reality, its ascent has been turbo-charged by AI – and that’s a route rivals in the West are following with fervour.