Artificial intelligence (AI) and the growing influence of younger consumers are transforming the beauty and personal care industry, presenting opportunities and challenges. From personalized product recommendations to age-appropriate solutions for younger demographics, these trends are reshaping the market.
“The industry potentially could be transformed by these two events—AI-powered personalization and the impact of younger consumers,” Cooke told CosmeticsDesign. “Companies that get this right will have the opportunity to create long-lasting brand loyalty.”
However, these innovations come with significant legal, ethical, and operational considerations, requiring brands to navigate new territory carefully.
AI-driven personalization: Opportunities and risks
Integrating AI into beauty and personal care offers significant potential to create personalized products and experiences tailored to individual needs. “AI’s promise to deliver personalized care is incredibly appealing,” Cooke explained. “Products will be more tailored to the individual, and virtual and in-store experiences will be better able to address their unique needs, all enhancing consumer satisfaction.”
However, delivering on this promise requires companies to collect and analyze substantial amounts of high-quality data, including sensitive information. This data-driven approach allows AI tools to offer precise recommendations, covering everything from skin care to hair care, while fostering long-term brand loyalty.
Cooke emphasized the importance of robust data security measures, noting, “This type of data presents heightened privacy and data security challenges that might be new to many in the industry.” Companies must also ensure transparency in data collection practices.
“Be transparent with consumers about your data collection practices and provide them with readily digestible information on how their data will be used and protected,” she added.
Engaging the next generations
Generations Z and Alpha represent a growing and discerning beauty and personal care consumer base. Their preferences and expectations are reshaping how brands approach innovation and marketing.
“These challenges include supporting the different skin care needs of developing bodies, providing AI tools to consumers with a high degree of technical literacy, and appealing to their original concepts of beauty and wellness,” Cooke noted.
Strict privacy regulations require companies to implement additional safeguards for minors, including parental consent for data collection. Cooke highlighted the need for age-appropriate AI-generated recommendations, stating, “Companies should build safeguards to ensure that AI-generated recommendations are age-appropriate and do not create product liability and safety concerns.”
AI’s role in marketing is also under consideration. For example, AI-generated models can help consumers visualize how products may appear on different skin tones or conditions but also pose risks.
“Using preternatural models might raise concerns similar to the impact of social media on minors,” Cooke explained. Brands must navigate these issues carefully to avoid potential backlash.
Regulatory developments on the horizon
As AI technologies continue to evolve, legal and regulatory frameworks are also developing rapidly. Cooke highlighted the EU’s AI Act as a leading example of comprehensive AI regulation.
“The AI Act may provide insight as to regulators’ concerns,” she said. These concerns include transparency when consumers interact with AI, potential behavioral manipulation, and the handling of biometric data.
While the AI Act’s enforcement begins in February 2025, its implications for the beauty and personal care sector remain to be fully seen. Cooke advised companies to closely monitor developments in global AI regulations, especially if they operate in multiple jurisdictions.
Another emerging legal trend involves the risk of AI making predictions based on faulty assumptions. “Companies need to provide careful oversight and validation of AI tools, as well as the ability to course correct quickly,” Cooke recommended.
Navigating the future
AI and the increasing influence of younger consumers present unparalleled opportunities for the beauty and personal care industry. However, these advancements come with complex legal, ethical, and practical challenges.
As Cooke summarized, “Before companies embark on building the datasets to create AI tools and offering them to consumers, they must ensure that they have the infrastructure to handle sensitive data plus implement robust security measures.”
By addressing these issues proactively, beauty and personal care brands can harness AI’s potential while maintaining consumer trust and regulatory compliance.
