In the past year, makeup and beauty brands have hit a massive hurdle marketing to consumers online. Compared to other beauty categories, physically trying on makeup and testing products is a large part of the path to purchase makeup. When looking at this sudden shift to digital, numerous makeup and beauty companies have begun investing heavily in digital technology. Specifically, artificial intelligence and nonfungible tokens have played a huge role in the digital strategy for beauty brands.

Digital Innovations Made by Beauty Brands

More and more companies have shifted their focus onto digital technology in an effort to succeed online. Brands such as L’Oréal and Il Makiage have paved the way in the AI beauty space, providing customizable and interactable products. L’Oréal first entered the AI ecosphere in 2014 with the launch of their Makeup Genius app, followed recently by the ModiFace app and Perso smart device. Similarly, Il Makiage uses AI within their PowerMatch quiz to personalize a consumer’s foundation. A number of other brands have also invested in the space, with others following suit in order to stay in line with their competition. e.l.f. Cosmetics is one such brand, having invested heavily in digital technology in recent years.

From their Virtual Try-On app to their branded Twitch channel “e.l.f. you”, e.l.f. Cosmetics continues to take part in new digital ventures. On June 18, e.l.f. Cosmetics released their first ever Crypto Cosmetics Collection. Three of the brands most popular beauty products, the Poreless Putty Primer, 16HR Camo Concealer, and Ride or Die Lip Balm were converted into nonfungible tokens (NFTs) and sold to fans via Bitski. These “Ne.l.f.Ts” were digitally dipped in gold and available exclusively online, providing fans with their own unique piece of e.l.f. art. With only three of each product, this limited-edition collection containing the Golden Poreless Putty Primer Dime, 1600 Hour Golden Camo Concealer, and Golden Ride or Die Lip Balm sold out instantly.

Understanding How NFTs Will Impact Digital Strategy for Beauty Brands

NFTs are a cryptocurrency that provide a certificate of authenticity for one-of-a-kind digital products. Stored on a blockchain, these products cannot be duplicated or deleted, providing consumers with a life-lasting and exclusive product. Along with e.l.f. Cosmetics, a number of luxury brands have joined the NFT wave such as LVMH, Prada and Cartier. Louis Vuitton partnered with Microsoft to create Aura, a blockchain that uses NFTs to track products and identify counterfeits. Knock-off products saturate several industries, including beauty and cosmetics. In 2016 alone, over 2,000 counterfeit cosmetic products were seized by U.S. customs. While e-commerce sites work to tackle the production of fakes, consumer impressions and negative results ultimately fall on the manufacturing brand. Along with improving the overall digital strategy of beauty brands, combating counterfeit products requires action at multiple levels of production.

In order to successfully compete in the digital age, companies must expand their digital technologies in innovative ways. Beauty brands may have historically considered a reduction in in-person beauty shopping a disaster for the industry, but by capitalizing on the right digital technologies brands can reach a wider array of consumers and engage them more effectively. From AI to NFTs, beauty brands that involve consumers and build communities online will continue to lead in the industry.

Coauthor and contributions by Rachel Ruth