German luxury skin-care brand Babor has found success with its recent AI-backed personalization efforts.
In 2021, Babor launched its first online tool, called the Skin Advisor, which offers personalized product recommendations and routines for first-time customers. In early 2022, the brand followed up with a Skin Coach for additional customer service post-purchase. Both are free to use.
The personalized Skin Advisor marked the first time Babor used analytical technology on its e-commerce site. The tool asks customers for information including their age and skin type, but it also considers geolocation impacts on the skin and can perform a skin analysis using a picture provided by the user. Customers can access the Skin Advisor through a prominent menu bar option on Babor’s homepage and can access the Skin Coach for the first time after completing the Skin Advisor program and creating an account. The Skin Coach allows people to save their routines and progress based on their skin-care goals like hydration, and is meant for frequent use.
“With our history as an expert brand, it’s important to educate consumers and to show them the benefits of our products, in terms of performance and sustainability,” said Andreas Wolf, vp of premium private label at Babor. “Plus, as a premium luxury brand, we [don’t want to discount], so we need to differentiate with better services.”
Babor’s core customers are women ages 25-50 Babor earns about $250 million in annual sales, according to a CEW story from 2020.
During the fourth quarter of 2023, Babor customers who used the Skin Advisor converted to sales at an 82% higher rate than customers who did not use the tool. Furthermore, those customers had a 19% higher average order value. Babor customers who continued past the Skin Advisor to use the post-purchase Skin Coach converted 442% higher than those who did not use either tool. Compared to the Skin Advisor, specifically, Skin Coach saw an approximate 102% higher conversion in the fourth quarter of 2023. The average order value was 47% higher than for customers who did not use either tool and nearly 13% higher than Skin Advisor users.
With the proliferation of chatbots and skin analysis consultations, various companies have gathered evidence supporting their efficacy. According to a 2024 study published in the Academy of Entrepreneurship Journal, chatbots increase conversion from visit to sale by 10%, and customer loyalty also increases by 10%. Meanwhile, AI chatbot provider Glassix found in its own study that chatbots provide a 23% increase in conversion rates compared to e-commerce sites.
The objectives for the implementation of the two tools were to provide a higher level of service to customers that would translate to growth in e-commerce sales and to understand customers’ needs and desires better, said Sampo Parkkinen, CEO and co-founder of Revieve, a beauty tech company that Babor hired to help build the tools. Parkkinen said that zero-party data, which is information customers willingly share, has quickly become more important for consumer brands to capture, not only because of growing regulation but also because it’s more reliable. In each Skin Coach session, Babor captures 146 data points on a customer, such as their pore size and any presence of fine lines. It’s collected 1.3 million quarterly Skin Advisor data points, on average, since its launch. Wolf said that between 3%-5% of Skin Advisor users go on to use the Skin Coach.
“A personalized customer experience that the consumer goes through on a website creates a direct dialogue with the brand,” said Parkkinen. “That proactive data that the consumer gives is highly valuable because there are no inferences you have to make. It is the consumer [directly] telling a brand, ‘Here’s what I like or don’t like, and here’s what I care about or don’t.'”
After consulting with the Babor team on its goals for the tools and what it hoped to achieve, the next step was to develop the advisor and coach tools. Revieve offers options and modules for beauty brands to create custom versions of these. There are certain considerations any brand has to make when developing such tools, such as whether a chat experience should make single product or skin-care service recommendations or suggest a full routine, what kind of customer preferences it should take into consideration, and whether a chat tool will aid in product development and thus ask questions that may be unrelated to its current product portfolio. Wolf said he was impressed by the level of communication customers had within their Skin Advisor and Skin Coach sessions, which far outpaced the number of phone calls, emails and social media direct messages the brand receives.
Wolf said Babor has analyzed macro trends from the data its team collected through the chatbot to fuel segmented marketing email campaigns based on customer interest and needs. Some of that data is general, like which products customers gravitate toward most. The brand’s best-sellers include the Hyaluronic Cleansing Balms, the Ampoule Concentrates with various benefits, a daily Moisture Glow Cream and a Soothing Rose Toner.
Wolf said that, after nearly two years of offering the Skin Analysis and Skin Coach, the Babor team now understands individual customer journeys. Tim Waller, co-CEO of Babor Beauty Group, said that Babor is exploring the use of AI in marketing and is considering launching virtual try-on for skin care within the digital customer journey.
