Have you noticed that in supermarkets and pharmacies, "beauty" aisles are now being called "beauty and wellness"--and they have gadgets?
These formerly segmented markets are starting to merge closer and closer, and the entrepreneurs who are crossing them over each other are growing the fastest. The keyword "beauty" is one of the most-searched terms on the web, with almost four billion queries. There's plenty of opportunity, especially if you use technology in a smart way, to build a fast-growth global company that over half the population might use.
That brings me to Monday's news of L'Oréal USA's new funding stream for entrepreneurs building beauty-focused technology at $25,000 a pop, called the Women in Digital NEXT Generation Awards. They are intentionally looking at how technology is revolutionizing the beauty industry. Their interest spans across hard technology like skin scanners to digital interfaces and media platforms over to creating technically advanced retail experiences at beauty counters.
I ran into Gretchen Saegh-Fleming, CMO of L'Oréal, at CES and thought it was odd to see her investing so much time at the tech-focused event. She explained to me that L'Oréal was entering the A.I. world with a Facebook Messenger bot to produce services for its beauty brands, and partnering with start-up Automat Technologies to develop a series of beauty services that will soon launch through those Facebook Messenger services.
She's not alone. PepsiCo has a new fund with Stacy's Chips for food founders. Bumble just opened a fund with Serena Williams to invest in women led startups. In the beauty industry, 118 identified beauty companies received venture investments between 2012 and mid-2017. Of those, at least 63 companies--53 percent--had at least one female founder, with 50 of them serving as CEOs, according to FiveThirtyEight. There are programs for beauty founders to both receive funding and mentorship, like Seed Beauty and Sephoria's Accelerate.
The beauty industry in the U.S. is at a cool $90 billion, according to Statista. Add the wellness market at $16 billion, and you're eclipsing $250 billion in market share. The transition to purchasing these products online has been fast, with 30 percent of purchases now being made through web and mobile. And new research from Accenture reveals that businesses in beauty that successfully apply 6A.I. could increase profitability by an average of 38 percent by 2035.
The people leading the trends behind those purchases are entrepreneurs. Some, like beauty bloggers Huda Kattan and Amber Fillerup Clark (who each have millions of followers), are using their technical chops to power their success. The hardware tech side has success stories, too: La Roche-Posay's My Skin Track pH and Wella Professionals' A.R.-enabled Smart Mirror are good examples on both partnership and acquisition.
When investors ask about which industries are growing through innovation, the beauty and wellness aisle is a place to take your shopping cart. Remember that the new Women in Digital NEXT Generation Awards are specifically seeking female founders who have the vision and discipline to transform the beauty industry. Why? Because, in my opinion, the next tech unicorn will be wearing lipstick.