This month, personalized Artificial Intelligence (AI) and Augmented Reality (AR) brand experience platform Revieve released its latest report, "Navigating Retail's Future: Connecting Dots for Success in 2023 and Beyond." The report focuses on top retail trends in person and online and offers comprehensive "highlights for strategies and technologies that are reshaping customer engagement within the beauty industry," said Sampo Parkkinen, CEO of Revieve.
CosmeticsDesign spoke to Parkkinen for his insights into critical takeaways from the report, the report's most surprising findings, and the best applications for the report's findings for manufacturers and suppliers to the cosmetics and personal care product industries.
The report & key takeaways
To compile the report, the Revieve team collected data "through a meticulous process involving access to industry insights and collaboration with various brands and retailers," said Parkkinen. The data was then analyzed into findings that are a "comprehensive analysis, incorporating information obtained from Revieve's partnerships with brands, ensuring a rich and diverse dataset that contributes to the depth and credibility of the report," he explained.
These results are particularly significant to the beauty and personal care product industries because "beauty manufacturers and ingredient suppliers that invest in innovative tech solutions and foster a culture of adaptability will be well-positioned to thrive in the ever-changing landscape of 2023 and beyond," he explained.
The results reveal "strategies and technologies that are reshaping customer engagement within the beauty industry," Parkkinen said. For example, one of the report's key takeaways is that "customers continue to seek seamless online and in-person experiences." The data shows while "22% of consumers are drawn to virtual shopping, retailers are responding by expanding their digital presence across various channels, and 81% of retailers plan to enhance their online presence in the next twelve months."
Another revelation from the report focuses on the "phygital" approach to consumer engagement, an innovation where "brands are integrating their digital experiences with physical stores," he said. "Now more than ever, brands and retailers are focusing on tapping into their customer's unique interests as nearly 60% of consumers envision more than half of retail spaces dedicated to immersive encounters by 2025," added Parkkinen.
Automation is another trend "within the retail landscape that can be a pivotal force in elevating retail operations and enhancing the shopping experience," he shared, and the report disclosed that "75% of consumers embrace automation, with 23% more inclined to shop where modernization is welcomed." This finding is noteworthy because "although there are still some misconceptions, automation's purpose is to revolutionize the retail industry by simplifying time-consuming tasks, allowing employees to concentrate on delivering memorable brand experiences with a personal touch," he explained.
These results "present an opportunity for beauty and personal care product manufacturers and suppliers to embrace the power of technology to cultivate customer loyalty and have a deeper understanding of consumer needs," Parkkinen said.
"By leveraging zero-and third party data, self-reported preference, behavioral and psychographic data - retailers can create a complete picture of their customers to make informed decisions regarding inventory, product offerings and merchandising, enhancing revenue generation and customer retention," he summarized.
Out of all the report's findings, three stood out as particularly unexpected or surprising to the Revieve team. The first surprising finding concerned Text Shopping and Self-Service Alternatives. This rising trend is notable and unexpected because it marks a "substantial shift towards text-based shopping and the emphasis on self-service indicates a changing consumer preference, challenging traditional shopping norms," said Parkkinen.
The report's data revealed that 19% of consumers expressed keen interest in text shopping, and "over half of retailers (57%) see the importance of self-service alternatives such checkouts or chatbots," which is a strong indication that retailers are likely to embrace more accessible customer service options in the coming months.
The second surprising finding concerned the Consumer Acceptance of Automation, and the data reflected that 23% of consumers were more likely to shop at an automated retailer. This is unexpected because "despite concerns about job displacement, the positive consumer perception of automation suggests a readiness for technology integration in the retail experience," Parkkinen explained.
This finding also reflects that, for manufacturers and suppliers of beauty brands, the path to integrating technological advancements into the supply chain to provide more in-depth product information to create a more seamless shopping experience may be more straightforward than previously anticipated.
The final surprising finding in the report concerned Gen AI and Conversational AI in Beauty Technologies. Said Parkkinen, "a transformative advancement within the realm of AI is the emergence of Gen AI and Conversational AI," and "the depth and versatility of AI applications in the beauty industry, going beyond conventional boundaries, reveal a surprising level of innovation and customer engagement." This can include immersive experiences like virtual try-on technology and other digital options for personalization in the consumer shopping experience.
Moving forward, the next steps for Revieve include utilizing the report's findings to inform more in-depth research in consumer retail engagement. For example, "In response to the transformative role of Gen AI highlighted in the report, Revieve is poised to explore deeper integration of Gen AI technologies into its solutions," said Parkkinen. "The objective is to harness the power of Gen AI for heightened personalization, particularly within the beauty tech sector, offering customers more immersive and tailored experiences."
Additionally, due to the report's findings, the platform now has a more "clear understanding of the pivotal role of data-driven strategies," he plans to "intensify efforts in acquiring additional first-party and zero-party data."
"This strategic move is designed to enhance the depth and breadth of customer insights, enabling brands to refine their approaches based on a more nuanced understanding of customer preferences and behaviors," he added.
Finally, he concluded by "building on the importance of data-driven personalization," which was emphasized through the report's findings, that the platform plans to focus more intensely on creating more comprehensive customer profiles moving forward. "By gathering and analyzing an expanded range of data points," he said, "the company aims to empower brands with the insights needed to tailor products and marketing strategies more precisely to individual customer preferences."
In the coming months, Revieve will release a second part of the report, featuring "additional valuable data, numerical insights, and customer profiles from Europe, the Middle East, and the U.S.," said Parkkinen. About this second report, he explained that "this upcoming section promises to provide an even more comprehensive understanding of Revieve's strategies and their impact on helping brands build and strengthen customer loyalty in diverse global markets," like beauty and personal care products.