Today's young, digital-savvy consumers are much more health-conscious than previous generations. And with the rise of fitness apps, the post-work pint is increasingly being replaced with an evening run or fitness class.

And when it comes to beauty, millennials are looking to social media for approval as well as using Instagram, YouTube and SnapChat for beauty inspiration.

NYX cosmetics has acted on this trend, crowdsourcing user-generated selfies to demonstrate what its products look like on real people, rather than models. And Unilever has been changing the way it markets haircare products by launching a YouTube channel called All Things Hair. Using beauty bloggers, the FMCG company understands how shoppers are more interested in styling their hair than the product.

Last year, Sephora pioneered a digital 'flash store' concept, where it kitted out a small-format store in Paris with interactive terminals and digital look-books, encouraging customers to add items to their virtual baskets and take advantage of click & collect and self service.

Sephora also created an app, called 'Pocket Contour’, which taps into the makeup application trend of facial colour contouring. Ruth Harrison, director of retail strategy for Europe at ThoughtWorks, explains to Essential Retail how it works: "After the user takes an obligatory selfie to determine facial shape, augmented reality powered technology provides real-time digital visualisation with easy to follow guidance for personalised make up contour application."

Start-ups

While health and beauty retailers are beginning to deploy exciting technologies, there are also start-ups popping up with innovations which could shake up the industry. One example is Rock Pamper Scissors, which is trying to disrupt the way customers book hair and grooming appointments, with its marketplace for salons. The app focuses on same-day appointments, as well as promoting the individual stylists through profiles, rather than focusing on price. Founded by former Just Eat marketing boss, Mat Braddy, Rock Pamper Scissors has now gained funding from New Look founder Tom Singh.

Another piece of technology Harrison has been following is Internet of Things (IoT) company, Cutitronics. This skincare application uses digital technology to read the user's skin moisture levels and dispense an exact measured dose to match. "As skin moisture levels respond to changes in environment, the recommended dosage is recorded and adapts the volume of product it dispenses, removing the risk of applying too much or too little," she explained.

Matt Prebble, managing director of Accenture’s retail practice in the UK and Ireland, says the health and beauty sector is a thriving, but saturated market. "Brands and retailers in this space need to be more compelling, in order to compete for what is ultimately limited space in their customers’ cosmetic bag," he explains.

"Despite market saturation there are some incredibly exciting start-ups that are hoping to change the face of this industry. From a comprehensive nutrition pack to a virtual face-tracking makeup app, these brands offer sophisticated innovations that will enhance and better personalise experiences which is something bigger brands and retailers are all vying to do.”

Virtual-reality beauty

One such start-up is the creative agency, Holition, which provides augmented reality and 3D digial solutions, from holographic fashion shows to virtual cosmetics for makeup and nail polish.

Its Face by Holition app gives customers a virtual mirror on their smart device where they can digitally try on different makeup and see the results on their screen. The app also encourages users to scan images or adverts to find the makeup featured on the model so the potential customer can try it on themselves and be connected to a retailer selling the product.

"Building the Face by Holition app meant developing accurate face-tracking algorithms from scratch, anticipating how it would be used, as well as understanding the cosmetic brands and product ranges," explains CEO, Jonathan Chippindale, saying the company works with a team of female developers who understand makeup, such as skin tone, face shapes, as well as eyes and lip contours. "Technology has to be beautiful to work – we are driven by the human to technology experience or ‘digital anthropology’, to craft beautiful digital retail experiences which seamlessly integrate design with emerging technology."

Chippindale says the emphasis is on the customer experience, making sure it is memorable and unbeatable. "Rather than being distracted by technology we prefer ideas to take precedence. The question is never how to do something until the solution has been refined but more about understanding the ultimate user experience."

The Face by Holition app is currently being used by a number of cosmetics brands in the US (with a big-name London launch happening in the next month). US brand, Covergirl has integrated the technology in its BeautyU app, while Sally Hansen also used the technology for its Manimatch campaign.

CEO, Jonathan Chippindale continues: "We understand that digital and eCommerce are a threat to retail, so we try and work with online, the physical space and mobile to understand how these three channels work together. I think brands are really waking up to this. Brands are making more effort to integrate technology in a seamless, more elegant and sympathetic way – they are looking at the longer term and trying to ensure that the technology does not get in the way of the relationship between the brand and consumer, and is an enabler not a barrier."

Health and wellbeing

Stepping away from beauty, another start-up working with Accenture is Vitl, which provides health supplement packs online via a subscription service.

Operations director, Natalie Peppi, tells Essential Retail Vitl wants to disrupt the way customers walk into a health food store searching the endless aisles holding brown glass bottles of vitamins.

"We're catering for time poor people and the idea is to make staying healthy more convenient," she says, noting how most people who take vitamins carry them in a Tupperware box to work, or forget to take them all together.

Vitl provides daily nutrition strips which fit in a consumer's pocket. The four tablets include a multivitamin, Omega3, CoQ10 and a supergreens capsule. As well as a subscription pack which fits through the letterbox every month, the start-up is also supplying its packs to Whole Foods.

"To make it more convenient for everyone to stay healthy, the way to go with that is to use technology and analytics to understand the market out there and what the customers want," explains Peppi.

Looking forward, Vitl hopes to personalise the vitamin packs for customers depending on what supplements they need to improve their health.

While Vitl focuses on health and wellbeing, another start-up, Skin Analytics, is in the more serious business of improving the survival rate for melanoma skin cancer.

Director, Neil Daly, says the company provides a low-cost way to identify moles which may need further investigation by a dermatologist.

"We do this by providing a special lens, called a dermoscope, which captures a very high quality image of their lesion. We then run artificial intelligence (AI) algorithms over the image to determine whether they need to see their dermatologist. We also provide a monitoring service which allows us to track changes over time – one of the most accurate ways to identify melanoma."

The app is currently free to members of Vitality Health, as its current business model is to work with insurance companies who want to improve member experience around skin cancer. Moving forward, Daly wants the app to be available to all front-line doctors to help identify patients which need secondary care.

"Beyond that, we have ambitions to drive the costs down to make it available directly to consumers who would use it to evaluate their moles every six months," he says. "In that way, we can really make an impact to the survival rate for this disease."

Rather than disrupting the health and beauty industry, Skin Analytics has the potential to help disrupt health services and reduce costs for the NHS.

"Simon Stevens, chief executive of NHS England, has very clearly identified the need for primary care to get more support to identify disease earlier and the way we're approaching our service is aiming to do just that. By providing a screening service directly to the general public, we can take off some of the pressure felt by primary care, freeing up around 1 million GP appointments each year."

But Daly says it is not easy to disrupt healthcare. "Regulation is behind and they are scrambling to keep up with the pace of technology," he explains. "There needs to be more clinical evidence behind health tech solutions but at the same time we need to not kill innovation with red tape."

For more information, click below: 

Accenture

Cutitronics

Holition

Rock Papmer Scissors

Skin Analytics
 
ThoughtWorks
 

Vitl