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How Olay's AI-Powered Consultation Disrupts The Cosmetics Industry

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Olay, a long-time skin care brand, is attempting to disrupt the cosmetics model with a unique marketing approach that brings the power of artificial intelligence (AI) to skin consultation. And to mark this breakthrough, Olay unveiled its AI-powered product in an ad they released earlier this year with a tagline of “Killer Skin,” featuring a humorous storyline that appealed to women and men.

Olay’s real disruption is how they’re appealing to consumers — women and men — to change how they explore and purchase skin care and cosmetic products.

Typically, cosmetics advertising is meant to entice consumers with products that address problems (e.g., dry or oily skin) or that offer appealing colors (eyeshadows and lipsticks). Consumers may go to the drugstore to purchase what they think will best meet their needs, but 30% of the time they go home empty-handed because they aren’t sure which products are right for them. Or, consumers can go to a high-end department store where a consultant suggests skin care or products to create a certain “look.” This is not only time-consuming, but also uncomfortable for many professional women who don’t want to appear to be pampering themselves in public. A third venue is direct sales by a representative, but typically reaches a smaller share of the market.

Olay’s online “Skin Advisor,” which uses “selfies” and a brief questionnaire, can potentially explode this market by allowing users, in the privacy of their homes, to receive a personalized analysis that takes an estimated three minutes. Olay’s Skin Advisor also uses AI to estimate a person’s aging without the use of their product, a clever way to engage consumers.

Breaking Norms in a Scalable System

By combining privacy and personalization through AI, Olay has the potential to explode the number of consumers who could be introduced to new products and educated about them. The result is scalability that also breaks down the norms in skin care and cosmetics, which are marketed mostly to women. This is a huge potential, with the global cosmetics market (which includes skin care, hair care, and fragrance) estimated to reach $805.61 billion globally by 2023.

Although more “skin management” products are being marketed to men, it can be embarrassing for male consumers to shop for skin care and cosmetics in public. Online consultation removes that stigma for men for whom in-store consultation can be uncomfortable because it is perceived to be feminine.

Breaking these norms is what made the Olay Super Bowl ad so effective. The ad was hailed as empowering women, reaching out to a female demographic in a male-dominated space. But there are nuances beyond appealing to women who are football fans as well as those may have watched the game in a social context that included all genders. The key was using a humorous horror-movie storyline in which a woman (played by Sarah Michelle Gellar) cannot unlock her phone to call 9-1-1 after a masked intruder breaks in because she’s too youthful looking for the facial recognition software. The masked intruder compliments her on having “killer skin” — hence the Olay ad tagline. Humorous and clever, the ad appealed to both men and women.

Educating Consumers

To reach more consumers and respond to their needs in a personalized way, Olay’s Skin Advisor relies on machine learning. The brain of its advisor is a “supervised learning system” that uses AI to make predictions about aging and skin care needs. As each person submits a “selfie,” that data allows the system to become “smarter” for subsequent users and ideally more accurate in its aging predictions. As users confirm their real age (assuming they tell the truth) the system receives direct feedback on how well it’s performing.

The assumption is that educated consumers will feel in control as they make purchases, but without the time commitment and lack of privacy that can be associated with in-store consultation. The key is the complement between an AI system and the personalized touch, which could conceivably be applied to other segments of the health and beauty market. For example, using similar skin advisor apps to assess sun damage or to flag potential skin issues such as dermatitis or psoriasis.      

A Matter of Trust

As adaptive as the AI-powered system is, ultimately the system must rely on the same foundation that underpins every consumer interaction--trust.

Olay’s Skin Advisor, as with other AI-powered apps that use facial recognition or gather private data, must be trusted by consumers. For example, in uploading their personal images to Olay, consumers have to trust that these photos will not be used for any other purpose or be accessed by another party. Olay’s long-standing brand backs that trust, which must be continuously earned with safeguards in the system.

Trust also has to flow both ways. Olay must trust the consumer to give accurate feedback, such as about their age. Let’s say the Skin Advisor estimates a 49-year-old person’s age at 54. Will the person tell the truth? Or will that upset over being perceived as older cause the person to report a much younger age? A plethora of inaccurate data would allow error to enter the system.

Just as in-store skin care advisors need to make consumers comfortable in revealing their problems and desires, so must an AI-powered app. If this truly works, Olay’s AI may bring a personalized online experience to more consumers at scale, while breaking the norms in a huge market segment.