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By Kwak Yeon-soo
An increasing number of skincare and cosmetics companies here are utilizing big data and artificial intelligence (AI) technologies for personalized marketing strategies aimed at attracting the post-millennial generation, known as Gen Z, according to industry officials.
The beauty industry is focusing on tailored services and customization of products, such as a serum meant for a specific type of skin.
Innisfree has teamed up with a research team led by Kim Dae-shik, a professor at the Department of Electrical Engineering at KAIST, to analyze its consumer database and offer personalized services based on 1 million online product reviews compiled from January to December 2018.
Kim and his research team developed a machine learning algorithm to categorize good or bad products based on customers' feedback and skin types. The team also constructed positive and negative lists of ingredients for each product.
Innisfree said it will offer customized skincare advice, such as recommending products frequently used by customers or introducing new products to better reflect customer needs.
The company expects the use of big data will eventually help it understand user habits and guide it in customized production and self-service.
"We have been pursuing digital innovation by analyzing the needs of millennials and Gen Z, who are familiar with digital devices, pop-up stores and cosmetics vending machines," an Innisfree official said.
"Our business innovation through digitization will give us a way to survive in the competitive retail industry."
Meanwhile, Lotte Department Store has been utilizing pop-up retail store On and The Beauty as part of a larger strategy to attract younger consumers.
With self-service screens, consumers can get help from a beauty stylist on product information and try out new products by simply pressing a button.
A Search ON button guides a customer to sales rankings and item locations, while a Touch ON button allows them to find out about product ingredients. A Catch ON button calls for a salesperson to recommend customized products and offer make-up services.
"We provide a big data-based beauty curation service to enhance the customer experience," a Lotte Department Store official said.
Another cosmetics brand IOPE has utilized big data in product development. The company gathered data of customers' skin conditions checked at an IOPE counseling lab to develop new ampoule product "Stem 3."
"Retailers have been providing product recommendations based on customers' established habits or preferences," said Shin Byung-joo, a professor at the Department of Computer Science at Sejong University. "In the future, they will use big data or AI to develop new products and offer alternative items."
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