Your face on a pop-up. The LaCroix killer. Selling CPG on mobile.
The beauty of data
L’Oreal put new force behind its tech plans on Friday when it bought Modiface, a Canadian startup providing AI and augmented reality tools to Sephora, Estee Lauder, and dozens of other leading brands.
Mainly, it lets shoppers virtually try on makeup on mobile apps and in-store screens.
The deal is L’Oreal’s first notable tech acquisition, and gives the beauty giant access to Modiface’s facial recognition patents, as well as data on the faces and makeup try-on habits of thousands of consumers.
So, what’s next?
L’Oreal is building up a pretty significant data set — even its early collaboration with Modiface reportedly analyzed over 22K faces. Now, the company could use this visual data to support product development and personalized marketing.
Expect to see augmented reality grow throughout beauty. L’Oreal’s move will wake other brands up to the importance of engaging mobile apps and interactive stores. Ulta, Estee Lauder and others might strengthen their tech partnerships or make their own acquisitions in response.
Who will benefit? For one, rival Perfect Corp., which already works with Lancome, Elizabeth Arden, and others.
We also see growing momentum (and big $$$) behind Chinese facial recognition apps like Meitu and Face++. Face++ offers consumer photo-editing apps, but also powers pay-by-face through Alipay, emotion recognition, and more for brands.
A woman pays with her face at a KFC in China
More broadly, it’s one more move toward CPG brands controlling their own sales channels.
L’Oreal can use Modiface to boost sales of its many brands through mobile apps and self-owned stores. By beefing up these channels, L’Oreal becomes more independent — from retailers like CVS and Ulta, that are busily building up their own beauty lines.
Meanwhile, many CPG leaders still rely on grocery or department stores and have struggled to sell online.
As Nestle, Kellogg’s, and others look to gather customer data and take control over their own sales channels, they may want to look at L’Oreal for inspiration.