From foundation matching and real-time consultations to generative marketing and supply chain forecasting, artificial intelligence (AI) is increasingly being integrated into almost every part of the beauty industry.
A McKinsey analysis found that beauty companies integrate AI integrated into personalization campaigns and media has seen an increase in conversions of up to 40%, with gains in marketing productivity. reach 20%. However, as Vogue According to reports, the industry still faces challenges around trust and inclusiveness as algorithms learn to interpret the full spectrum of human skin and identity.
Big brands, big technology
Leading beauty brands view AI as both an engine of growth and a backbone of creativity. Bright reported that Estée Lauder, following a decline in its market value due to weak travel retail sales, has rebuilt its business through enterprise AI adoption. The company in partnership with Microsoft to create a digital operating platform that supports supply chain marketing and forecasting And product innovation.
Glossy said the system’s generative models are now used to produce ad copy and visual content. And in-house creative assets, reducing production times by almost half. Estée Lauder financials indicate that AI-powered media optimization improved advertising ROI by 31%.
At the retail level, PYMNTES reported that Ulta Beauty uses machine learning to power its loyalty and personalization systems. The retailer’s platform integrates buyer profiles, purchase histories And store interactions to provide targeted recommendations. The system helped Ulta achieve a 95% repurchase rate among loyal customers while improving labor efficiency through automated scheduling and inventory forecasting.
PYMNTS also reported that L’Oreal uses AI to power virtual diagnostic and personalization engines, which the CEO Nicholas Hieronimus called “a revolution in augmented beauty”. The company’s AI tools now analyze millions of customer selfies to generate shade and skincare recommendations in real time.
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In another PYMNTS study, 70% of Gen Z shoppers said personalization drives their purchasing decisions, highlighting the growing role of AI in setting consumer expectations.
The fashion business reported that L’Oréal, Perfect body. And Madison Reed deploy “agentic AI” systems that operate autonomously to perform tasks such as formulation adjustments, inventory planning. And virtual consultation. L’Oréal’s AI platform now processes millions of skin scans in real time every month, linking diagnoses to product matches. Perfect Corp. integrates generative AI into customer websites to create instant looks from customer selfies. Madison Reed uses AI to monitor pigment consistency in production, automatically adjusting color formulations to maintain quality.
Small Brands and Consumer Readiness
The impact of AI extends beyond global businesses. THE American Chamber of Commerce reported that independent beauty startups are using AI-based assistants and shade-matching tools to scale their operations. One company said nearly 75% of its orders now come through virtual trial and consultation capabilities. These inexpensive tools help small brands compete with enterprises without the need for large data teams or complex infrastructure. Small beauty brands like Beckman 1802 said PYMNTES that AI tools allow them to create more personalized educational content and strengthen community engagement.
Consumer attitudes towards AI in beauty are also changing. Vogue found that inclusiveness remains a major concern, as many algorithms still struggle to recognize the full range of skin tones on a global scale. The publication states that brands are prioritizing transparent data governance and fairness in model training to preserve consumer trust.
Vogue adds that brand leaders recognize the uneven deployment of AI across the value chain. Some use it to generate creatives or forecasts, while others are testing virtual advisors that learn from feedback and refine recommendations in real time. The publication states that the next step for beauty will be development connected systems that link consumer data, product R&D And supply chain forecasting in a continuous feedback loop.
