Bip Report

Ai redesigns the future of beauty

Algorithms define personalised fragrances, skincare and shopping experience - Gen Z and Millennials are driving the transformation

3' min read

Translated by AI
Versione italiana

3' min read

Translated by AI
Versione italiana

arika Gervasio

The value of beauty stems from the balance between technology and creativity: on the one hand, artificial intelligence (AI) offers predictive potential, scalability and speed; on the other hand, brand authenticity, craftsmanship and emotional connection with the consumer remain indispensable. Today, AI makes it possible to extend personalisation to a broader public, once the preserve of artisanal niches, while maintaining high quality standards and reducing time and costs. This is what emerges from an analysis conducted by Bip, a multinational consultancy in digital transformation, which highlights how artificial intelligence in cosmetics is a lever capable of redesigning the entire supply chain, from research and development to the personalisation of the customer experience, and distribution.

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Three different fields, but united by the integration of data, creativity and technology, capable of reducing errors and maximising precision, are the fragrance sector, where algorithms simulate the interaction between aromatic molecules and human perception, creating novel fragrances based on trends, biometric data and consumer preferences; the skincare sector, where AI enables the development of formulations calibrated to specific local environmental conditions, reducing development time and ensuring targeted and more effective products; and technology also intervenes in the customer experience, where chatbots and virtual assistants transform customer interaction, offering personalised suggestions and continuous support.

The role of technology is redefining the supply chain, but it must be read on several levels. 'There is not only disruptive technology, such as generative AI or augmented reality that allows you to test products before you buy them,' says Giovanni Cara, fashion & retail partner at Bip. 'What is often overlooked is the value of silent technology, that which improves planning, procurement, and internal communication between companies in the supply chain. Using data well means being more efficient, but also more profitable in a structural way. And this is even more crucial for the long-term success of a company.

According to industry estimates drawn up by Bip Corporate & finance strategy desk research, the cosmetics sector will continue to grow globally in the period 2024-2028: skincare remains the leading category, with a 37.5% share of the market in 2024 (+5.5% per year 2024-2028), followed by haircare (+4.9%) and fragrances, now the most dynamic segment (+7.3%). Make-up is also expanding strongly (+6.4%), driven by new consumption oriented towards natural and minimalist aesthetics.

The main drivers of this transformation are young consumers, in particular Gen Z and Millennials, who favour sustainable products, personalised experiences and digital channels. E-commerce, already at 25% of the global market in 2024 and with peaks of 41% in the United States, is growing at double-digit rates, with social commerce (now 20% of online sales) accelerating thanks to platforms such as TikTok and creators. In parallel, the beauty tech segment is showing signs of strong expansion: beauty devices, valued at $55 billion in 2024, are expected to exceed $200 billion by 2033 (with a CAGR of +15.7%). Biotech skincare is also growing, from $5.44 billion in 2024 to $8.25 billion in 2031.

These numbers represent evidence of a structural change, where technology becomes an integral part of the creative and production process, also influencing positioning strategies and how we interact with the market.

"Made in Italy, which has always been synonymous with quality, fashion and luxury, today also embodies innovation and well-being. It is this combination that makes it a strategic asset for beauty," comments Marco Mazzucchelli, global head of corporate finance & strategy at Bip. In parallel, cosmetics companies are rapidly rethinking their business models: "They are undergoing an almost total transformation," Mazzucchelli continues, "They have to adapt to new consumption patterns and increasingly high expectations. We are witnessing a redefinition of the offer with strong investments in R&D, partnerships with biotech and tech companies, and an integration of digital competences at the very heart of the business.

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