In a tough moment for brands, businesses are having to get picky about where to put their dollars. For beauty innovation, this means high stakes for brands when selecting which technologies to invest in. The consumer-facing innovations that dominated 2024 — virtual reality-led experiences, metaverse activations, augmented reality-powered shopping — have all been scaled back. Instead, brands are now doubling down on where the return on investment (ROI) is: new product development (NPD) and personalised services.
As future-proofing remains front of mind for beauty brands operating in an unstable ecosystem, innovations that benefit consumers and translate to real results are those that will stand the test in an oversaturated market.
In this chapter, we dive into these key innovations, from the development of skin diagnostics and colour matching, to interactive stores and gaming environments. Research is conducted via an audit of different brands’ long-term and point-in-time activations from the last year, with individual metrics weighted to consumer importance.
Innovation’s 2025 class
The biggest innovators — Nars Cosmetics, Shiseido, Clinique, Charlotte Tilbury and Fenty Beauty — have held their spots in the 2025 Beauty Index by maintaining more evergreen innovations this year, such as skin colour matching, skin diagnostics and AR beauty try-on. True to this, leading brand Nars has furthered its developments in AI-based shade selection, virtual stores and immersive gaming experiences this year. Point-in-time activations, meanwhile, like those tied to cultural moments or product releases, have declined for all brands, which could relate to their shortened impact time versus evergreen plays that receive long-term investment and may even evolve alongside the consumer.
While the top five held their places from the Vogue Business Beauty Index 2024, more exciting changes have occurred further down the brand list, especially across those with previously limited innovation investment. La Mer and The Ordinary saw their innovation ranks rise by 15 and 10 positions, respectively, reaching seventh and 13th place. Both brands have invested in AR-based marketing in the past year, an area that, across all index brands, has seen the most significant decline in investment at 13 per cent.
In September 2024, La Mer launched a step-by-step AR-driven tutorial for its #NightWithLaMer activation across Instagram and TikTok. Meanwhile, The Ordinary took the out-of-home approach, launching an AR-enabled mural where passers-by could discover more about the products’ ingredients and efficacy. Marketing activations remain essential in raising awareness, but excitement for AR-led campaigns has waned in the past year, according to this year’s Beauty Index innovation data. So, what has made La Mer and The Ordinary stand out? A focus on education, science and efficacy layered with virtual tutorials, which is now more valuable to the discerning skincare consumer than ever.
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Budgets can dictate a brand’s level of involvement in innovation, with smaller brands often relegated to more affordable plays such as retail partnerships, market expansion or product development. For those still in their infancy, it’s a financial struggle to push beyond the low-hanging fruit. This is the case for Merit (28th) and Refy (29th), both newcomers to this year’s Vogue Business Beauty Index. Both brands have been limited in their innovations, with alternate payment methods acting as the only score driver of those tracked, placing them at the bottom end of the innovation leaderboard.
Byoma bucks this trend, however. Entering the pillar at 17th place, despite a relatively low awareness of 39 per cent, the brand has utilised blockchain technology in its cruelty-free accreditation through multi-brand stockist Cult Beauty and technology firm Provenance, driving its overall innovation score. This isn’t the only place Byoma has utilised partnerships to drive its technological growth: the brand partnered with AI-powered Revieve on its skin analysis tool in 2024, which can generate a complete skincare routine in response to consumers who submit questionnaires and selfies concerning their skin types and struggles.
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Path to personalisation
This year’s index has seen an overall decline in innovation, a clear sign of brands tightening their belts. However, personalisation is one area that has seen continued investment. Unlike in fashion, where technology-driven clienteling tools are best utilised by sales associates, beauty brands are more willing to delegate these tools to virtual agents. A third of brands (33 per cent) now offer skin or colour matching, up 3 per cent since 2024. Both La Mer and Kylie Cosmetics have recently invested in the area — La Mer launched an AI skin diagnostics tool earlier this year, and Kylie Cosmetics released a shade finder.
La Roche-Posay, meanwhile, is taking a more holistic approach to its Spotscan+ tool. The brand has moved beyond solely recommending La Roche-Posay products to incorporate lifestyle advice from nutritionists and mental health experts and is now offering consumers three-month tailored programmes (following an image-led, AI-powered skin analysis). This move into personalisation taps into the ever-growing intersection between beauty, health and wellness.
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With personalisation comes a wealth of consumer data. However, concerns around data privacy follow quickly, meaning brands may need to invest in heightened cybersecurity. Using a consent-based model such as allowing consumers to opt-in to data sharing — as well as opt out at any time — can build consumer trust. Used in the right way, this data can help brands elevate their customer service via client profiling while funnelling vital information into their development teams. Dior Parfums announced its Astra tool at Vivatech in May 2024, using generative AI to analyse data points such as Google reviews, as well as proprietary data from consumer interactions with the brand site, customer service and live-shopping sessions. Communicating the benefits of data sharing with consumers — such as tailored advice — can make the consumer more willing to participate.
Personalisation might be commonplace in purchasing pathways and clienteling from product recommendations to targeted advertising, but personalised products remain limited. Despite 74 per cent of consumers seeking product personalisation, no index brand offers consumer-personalised formulations, which remains unchanged from last year’s Vogue Business Beauty Index.
Specialised products demand an elevated price tag, however, so it is yet to be seen whether consumers are willing to pay the premium required to produce personalised products (Skinceuticals’s Custom Dose serum currently retails at $195). For brands assessing the opportunity to launch bespoke offerings, they should first understand the appetite of their customer base, as well as their attitudes to spending.
Beating sourcing woes
Climate change and global trade tensions make this a testing time for beauty’s supply chain, and ingredient sourcing is a rising concern. Over-reliance on natural ingredients puts brands at risk of exposing themselves to ongoing challenges, while the research and development required for biosimilar ingredients comes at a steep cost.
Aside from its high barrier to entry, biotechnology can help brands achieve a more predictable form of ingredient sourcing. These sourcing locations are not tied to specific climates, unlike those of naturally derived components, offering flexibility to manufacturers. However, some biotech solutions are commonly produced in specific markets — such as hyaluronic acid, typically produced in Germany — and may be subject to tariff charges and regulatory restrictions regardless of whether they are derived from a lab.
There is still, however, a knowledge gap for consumers on the benefits of biotech ingredients. “While the biotech space is exploding, it’s technically still in its infancy,” says Joanna Ellner, founder and CEO of biotechnology-driven skincare brand Reome. “This relative infancy stretches not only to innovation and what’s possible, but in consumer understanding.” Despite this, curiosity is abuzz among industry fans. Mentions of “skincare biotech” on social media rose 69 per cent in the first half of 2024 compared to that of 2023, per influencer marketing platform Traackr, predominantly driven by functionality.
With strong R&D and financial backing, beauty brands have the opportunity to stand at the scientific forefront of categories such as suncare. Since December 2024, Shiseido has been working with biotechnology firm Bacfarm to develop a proof of concept for a biotech-derived SPF. To reach beyond luxury, biotech companies such as Oddity are continuing to leverage technologies such as AI to streamline R&D and make lab-derived ingredients, like skin-plumping Fibroquin, more commonly available in the mass market. With the correct company partnerships, R&D contracts and financial investment, both established and emerging brands can claim a stake in the biotech revolution.
Case study: L’Oréal leads on longevity
The L’Oréal Group is looking to satisfy the demands of the longevity boom. The group’s latest innovation, a tool that promises to determine the skin’s rate of ageing, taps into the desire to live longer — and look more youthful while doing so. Debuted at the CES tech showcase in 2025, the Cell Bioprint tool analyses skin at the cellular level using “lab-on-chip” technology (which takes a surface sample of a user’s skin on a facial strip and when combined with facial imaging and a data questionnaire, provides a personalised product routine), developed with Korean biotech innovator Nanoentek, to predict responsiveness to ingredients like retinol and detect potential issues, such as acne, before they emerge. By looking at the skin’s DNA makeup, rather than an image, like most AI-based tools, the Bioprint tool is a far more detailed and proactive method for tackling skin concerns and determining accurate product recommendations.
This isn’t the first time L’Oréal has invested in device innovation. In 2021, the company also launched YSL Rouge Sur Mesure by Perso, a personalised lip colour device that allows the consumer to scan and create their own lipstick shade, while in 2023, it released Hapta, a motion-stabilising tool for lipstick application. Both innovations aimed to serve the needs of the consumer, but were limited by high price points and singular functions. By mapping skin age — and thereby its health — the Cell Bioprint is leveraging the long-standing connection between beauty and wellness.
What sets L’Oréal’s Bioprint tool apart is its intended on-counter use (the device is currently being used on skincare brand Lancôme’s counters in Asia) for accurate skin diagnostics and product recommendations without customers having to invest in the tool. It doesn’t stop there; other key tech players have also doubled down on the growing market.
If we look at other successful data-driven diagnostic and health tracking devices, such as the Oura ring (a fitness and sleep tracker) and Zoe (a device and app offering nutrition advice), consumers are increasingly willing to pay the price to optimise their health. The latest Oura model begins retailing at £349 with an ongoing subscription of £5.99 per month, while Zoe testing comes in at £299 with an ongoing subscription of £9.99 per month. The proof point for consumers may ultimately be what they can do with this information. Will consumers be guided through their health data or supported with actionable recommendations to slow down skin ageing? Or could this be a starting point for personalised skincare tailored to individual genetic makeup?
Key takeaways:
- Innovation leaders remain unchanged. Few consumer-facing developments in the past year mean innovation’s top players remain the same. Instead, it’s La Mer and The Ordinary climbing the ranks with previously little stake in the innovation game.
- Evolving personalisation. Personalisation evolves to further align with wellness. Smart brands will find solutions to harness the wealth of data produced in the process.
- Innovating at the source. As sourcing challenges become more acute, brands should look to science to innovate, starting with R&D.
