AI: The New Frontier in the $9.4B Beauty Industry Revolution
Artificial Intelligence (AI) is revolutionizing the beauty industry at an unprecedented pace. The global AI in beauty and cosmetics market is projected to reach a staggering $9.44 billion by 2029, growing at a compound annual growth rate of 21%.
Leading beauty brands are harnessing the power of generative AI for personalized skincare solutions, virtual try-ons, and custom product formulations. In a significant move, L’Oréal partnered with IBM in January 2025 to develop sustainable cosmetic formulations using generative AI. Meanwhile, Sephora’s AR-powered tools have boosted conversion rates by up to 20%.
“AI-powered personalization could boost beauty sales by up to 30%” – McKinsey Research
AI technology is enabling hyper-personalized recommendations. Companies like Proven Skincare and SkinCeuticals are using AI to analyze individual skin profiles and create custom products. This approach has proven successful for Avon, whose adoption of AI/AR technologies has boosted conversion rates by 320% and increased order values by 33%.
The AI trend extends beyond marketing to product development. AI-driven formulation platforms are analyzing vast ingredient databases to create innovative cosmetics. Smart beauty devices like Neutrogena’s Skin360 and Samsung’s Micro LED Beauty Mirror now provide real-time skin analysis and personalized skincare routines, marking a new era of data-driven beauty solutions.
Source: McKinsey & Company