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The Future of Big Data and Beauty: Data Driven Beauty

By: Emily Coleman, Jacqueline Chan, Courtney Das, Eileen Kim, Craig LaManna, Erica Roberson and Lisa Sequino
Posted: June 10, 2013

Editor’s note: The 2013 graduates of the cosmetics and fragrance marketing and management master's degree program at the Fashion Institute of Technology (FIT) in New York presented their Capstone presentations at the Beauty in a Digital World event, sponsored by Beiersdorf USA with research partner Google, at FIT’s Morris W. and Fannie B. Haft Auditorium in June.
The following white paper accompanied the presentation from group leader Emily Coleman, co-leader Jacqueline Chan, and group members Courtney Das, Eileen Kim, Craig LaManna, Erica Roberson and Lisa Sequino.

Future of Big Data and Beauty

Today, there are already pharmaceutical companies approved to manufacture pills which are able to track ingestion time, heart rate, temperature, and activity. In fact, in just the first half of last year, venture capital firms invested $700 million dollars in businesses developing wearable, edible, and implanted sensors. (Kahn, 2013) Big Data is projected to be worth $300 billion annually to the health care industry alone. It has become one of the leading topics in business today, and there are now more connected devices in the U.S. than there are people and by 2020, there will be 31 billion devices used by the 4 billion people connected to the Internet. (Badcock, 2013) This explosion of devices has been termed “The Internet of Things.” (Tyler, 2006)

The Internet of Things

In order to understand the Internet of Things, one must comprehend the true size and meaning of Big Data.

Size of Big Data

In 2012, the total amount of data created was enough to fill a stack of DVDs that could reach the moon and back. In 2013, the average person will process more data in a single day than a person in the 1500’s did in an entire lifetime. In 2020, the amount of data the world’s population generates will be 57 times the amount of sand on all of the beaches in the world. (Tyler, 2006)

Meaning of Big Data

Big Data is defined on three dimensions: Velocity, Volume, and Variety. (Kaushik, 2013) Data is generated faster than ever before and it is so big that it has outgrown today’s server technologies. These factors, along with data’s increasing amounts of structured and unstructured formats, ultimately represents value. There is a reason that many “quantreprenuers” say that Big Data is the new Oil. (Kahn, 2013) By applying technology to data, businesses are expected to quickly derive insights to improve their bottom line and outpace the competition.

Beauty Product Launch 2020

To understand what Big Data means for the beauty industry, one can examine the potential impact through the Product Launch cycle of 2020. By 2020, big data will have an impact on each stage of the product development process. Data will bring value to beauty companies enabling cost savings, speed to market and greater return on investments. The below addresses six specific ways big data will affect beauty innovation:

Data Centric Focus Groups

Product experience is based on a range of cues that are not always conscious. However, we know the medical industry is using ingestible sensors to track patient’s usage of medications. In the future, sensors are predicted to go beyond what people can verbally express and track what they physically do with the beauty product. Sensors will be molded into product packaging to track actual consumer usage behavior as companies develop and validate product concepts. (Holmes, 2012) These sensors will allow brand marketers to understand where and how consumers are using products, as well as how much product and how often. For example, in a recent survey consumers claimed that they apply 5 strokes of mascara to each eye. But when counted during actual usage observation, it was closer to 50. ("Big data issue," 2013)

Biology Led Innovations

Biological factors affect a significant part of the way each human ages. All human beings carry genes that control these factors, but what differs is exactly which variants of them each person has. Today, the industry looks at skin health when assessing aging. In the future, sensors built into beauty devices will go deeper and capture biological information to understand specific aging needs of consumers. For each consumer, a brand can understand how he or she makes and retains collagen, how skin is protected, and how quickly it repairs from UV damage. After receiving the data from the sensors, the biological information will be put into a digital database pre-loaded with information about active ingredients and their effectiveness with these biological variations. ("delivering on-demand," 2012) Recommendations directly related to each individual’s skin care requirements will determine which existing products will be the most effective or even allow the brand to create a specific product for that consumer. (“How big data”)

Data Driven Innovation Choices

Delivering this innovation successfully is critical for high performing companies. However, only 8% of prestige beauty retail sales were from true innovations or newness in the marketplace. (Ferber, 2013) By 2020 there will be new technologies that will allow brands to quickly aggregate big data across several macro factors including environment, natural resources, search analytics, consumer ratings and reviews, and consumer sentiment analysis. This information will enable companies to create virtual trending scenarios of the future, helping to identify gaps within product offerings. ("“big data issue”, 2013) For example, in a virtual trending scenario, there is a prediction that employment rates will rise for women, despite a downturn in the economy. Social Media sentiment reveals that working women are more stressed and have less time to dedicate to beauty rituals. They are choosing nail accessories to treat themselves during this poor economy. Search analytics show that women are looking to update their look more often. Sales trends indicate strong growth predictions through 2025 in the nail category, outpacing total beauty and product sensors have populated data of nail polish usage revealing women are beginning to change their nail look two to three times per week. By gaining these insights a nail company could identify an opportunity to create nail polish that updates instantly with a UV wand.

Data Stock Options

Big Data will also affect the future supply chain. Today, over $800 billion dollars in sales are lost annually due to inventory distribution challenges like out-of-stocks. For retailers, out-of-stocks lead to dissatisfied shoppers and for brands a lost sale to competition. Overstocks lead to heavy discounting or returns which not only negatively impacts the brand profit it can also lead to diminished brand equity. In 2020, digital technologies will allow retailers and manufacturers to break down silos that exist in inventory management and provide full visibility across channels. Brands will be able to collaborate with retailers to ensure the right stock is available in the right place at the right time. This will enable real-time visibility, better planning, improved customer service levels and, most importantly, shopper satisfaction. (Lohr, 2011)