Coty Inc. and AR technology company Perfect Corp. have partnered up to embed Perfect Corp.’s YouCam app technology into the sites and stores where Sally Hansen, Kylie Cosmetics and Covergirl are sold, among other Coty brands.
Jean-Denis Mariani, Coty Inc.’s chief digital officer, pointed out that AR try-on is expected to be a “huge” conversion driver and increase the average order value for these brands. According to Perfect Corp., its technology leads on average to a 400% increase in sales conversions online and a 200% conversion in-store, while return rates decrease by 8%. Its individual brands will roll out formal activations over time, with the first expected by end of the year. The Coty Inc. and Perfect Corp. partnership added to the digital transformation taking place in the retail and beauty space, especially among mass brands, as more of the world’s top beauty brands and companies integrate virtual try-on into their omnichannel strategies.
“My vision is to build a memorable consumer experience and take advantage of new consumer behavior,” said Mariani. “Services are the new [web] cookies. It will give the brand’s more opportunity to be relevant in their interaction with consumers through very personalized [suggestions].”
Through an omnichannel implementation, customers will be able to access AR try-on through the YouCam app and other social and online channels. In-store beauty advisors or consumers (via scannable QR codes at the shelf) can also access the technology when selling products, and it will be embedded in both DTC e-commerce and non-transactional brand websites. In the long term, Coty Inc. and Perfect Corp will co-create and exclusively release technologies that suit Coty brands. This includes producing livestream shopping shows with Perfect Corp. for the brand’s websites, with virtual try-on implemented. YouCam already features live beauty shows through its app. Coty reinvests 10-15% of its revenue back into innovation, he said, but declined to provide a firm timeline for the livestream shopping launch.
“We are working on two main pillars: The first one is innovation and tackling opportunities created by social commerce, live streaming and virtual try-on. We would like to unlock the future of e-commerce and the future [consumer] behavior. Everything is going to be through live-streaming and social commerce, et cetera,” he said. “The second topic is about advocacy. For years, everybody was looking only at the top influencers, but I would like to identify the best advocates of the brands, meaning the consumer.”
Coty Inc. has undergone a number of changes and challenges in the last several years. Sue Nabi was appointed CEO in Aug. 2020, and Mariani was appointed shortly after in a newly created role as chief digital officer, in Oct. 2020. Coty Inc. also invested a combined $800 million when purchasing a 51% stake in Kylie Cosmetics in 2019 and a 20% stake in KKW in 2020. Kylie Cosmetics has since undergone a rebrand, and KKW is also undergoing its own. During the company’s fourth-quarter 2021 earnings call in August, Laurent Mercier, Coty Inc. CFO, said the company would IPO its Brazilian business in order to deleverage and expand the business. Coty Inc.’s fourth-quarter revenue was almost a 90% increase year-over-year, though the full fiscal year (ending July) was still nearly a 2% decline, to $4.6 billion, compared to 2020. Coty Inc. experienced a 34% increase in e-commerce sales year-over-year, alongside a 37% sales increase and 25% sales increase year-over-year in its luxury and consumer brands, respectively.
On a brand-specific level, Covergirl has started to deepen its relationship with Amazon through Amazon Live shopping events in July, while Gucci Beauty released a new lens in April for Snapchat so users could try on the brand’s new lipstick. Back in Aug. 2020, Covergirl, Rimmel and Sally Hansen began a 30-minute delivery partnership with GoPuff.
“As the world emerges from the pandemic and consumers turn to digital channels … AR and AI technologies are set to become a mainstream component of every brand’s digital transformation strategy,” said Alice Chang, Perfect Corp. CEO. “[AR and AI] technologies will develop to go beyond product try-on to include virtual beauty consultations and tutorials. They will also provide in-depth analysis to offer product advice and personalized product recommendations based on customer’s unique features and beauty needs.”