Would you be surprised to find out that over the last few years, blockchain has been conquering most industries, from healthcare to education and even the beauty sector?
Technology is normally used in the beauty sector to improve products and services – developing eco-friendly packaging, creating vegan products, reinventing formulas, and improving customer service. The emergence of blockchain technology moves the focus from the product to the customer experience, which greatly impacts the consumer experience. According to experts, this is the reason why we witness an increasing number of online users researching exchange platforms like Binance to check the price of Bitcoin and other cryptocurrencies and purchase Bitcoin with credit cash. This slight change in the consumer journey could affect the trajectory of an entire sector.
Innovative technology has opened up the beauty sector to several diverse opportunities. Recently it has been the driver of advance and powered a boost of market value with a growth rate of 27%.
Why is blockchain technology welcomed into the beauty sector?
The beauty industry has entered its golden years with a growth of $532 billion in the last ten years and a prediction to get to $750 billion by next year. However, not all brands register the same level of success, and in fact, many struggle with a series of problems that prevent their growth. Beauty companies have been searching for solutions to end these hindrances and experimenting with innovative technologies like the blockchain to meet their client’s requests.
Blockchain technology has been shaped as something that could power growth in the beauty sector because it’s decentralized, incorruptible, and works like an open network. It’s as impressive as it sounds and can protect beauty providers from challenges and provide them with countless opportunities.
Reasons why blockchain could benefit the beauty sector
It boosts product transparency
The beauty sector has long been scrutinized for a lack of transparency. Companies in the industry have recognized the urgent need to turn to innovative technology like blockchain to boost the public’s confidence and demonstrate the provenance of ingredients in the products. According to research, 2/3 of beauty customers want greater label transparency. Additionally, over 20,000 shoppers have labeled transparency among the main factors that impact their buying decisions.
Blockchain enables companies to boost transparency because everyone with access to the digital ledger can join the network and check the data available. The technology integrates advanced mechanisms and encryption that allow it to protect data transparency by storing the information digitally so no network participant can alter or change it.
Beauty companies that rely on blockchain offer their customers the privilege of gaining knowledge of what’s in the products they consume, put on their bodies, or use for other purposes. They even offer information about the production process and ingredients used.
To conclude, blockchain technology increases the level of transparency, which could only grow the public’s trust level.
It enables brands to put down false claims
The public is used to beauty products labeled as cruelty-free, vegan, or coral reef-safe, which in fact, don’t provide what they promise. Several brands have been accused of greenwashing practices or making misleading claims, and the public wants to stay away from such companies. Blockchain technology could offer them these benefits because it enables all network users to access information related to the production process. Beauty brands that want to stand apart and address false claims use blockchain to back up their affirmations because they want to meet their clients’ expectations.
It helps companies build brand loyalty and improve customer experience
As mentioned earlier, the digital ledger promises to boost the level of transparency, and beauty brands can use it to build customer trust and establish brand loyalty. Companies that integrate blockchain technology can share data with the public and collect honest feedback that enables them to improve their products.
Companies that rely on the data they access through the blockchain can adjust their digitization and marketing strategies more efficiently. Blockchain data enables companies to focus on their efforts to boost profit and enhance customer engagement while cutting costs for product development and advertising.
It functions like an anti-counterfeit solution
Blockchain is an effective solution in fighting counterfeit because it’s an immutable network that enables companies to secure the public’s trust and ease their concerns when it comes to sustainability and product authenticity.
The public has access to the complete history of a product and can verify its authenticity by looking up the product’s information on the network or scanning the product tags.
Crypto cosmetics and NFTs can help companies build stronger relationships
The beauty sector is highly competitive, and companies constantly search for new and engaging ways to stand apart and capture the public’s attention. Good marketing and branding could help an organization draw attention, build relationships with its audience, and maybe even turn them into loyal customers.
Beauty brands have been experimenting with the creation of non-fungible tokens, which are electronic tokens created and managed on the digital ledger. Because they’re stored on the blockchain, they can be verified and allow no alteration. NFTs represent the genuine and unique possession of digital assets. Blockchain users can trade and auction on them in crypto marketplaces.
The art and fashion sectors were the first to enter the metaverse and use NFTs to provide consumers with unique pieces that would attract their attention. NFTs allow people to preserve the right of ownership and give them a sense of exclusivity. When they acquire an NFT from their favorite brand, they have the impression they own a little part of it.
The beauty industry might have joined the NFT trend later, but it takes great advantage of it. For example, in June 2021, e.l.f Cosmetics launched NFT versions of its most popular products, dipped in gold. NARS collaborated with Nina Kravitz, Sara Shakeel, and Azede Jean-Pierre to develop NFTs inspired by the brand’s product line in August 2021. Clinique also released an NFT called MetaOptimist to encourage people to share optimism stories.
Iskra Banović is our seasoned Editor-in-Chief at BlueFashion. She has been steering the website's content and editorial direction since 2013. With a rich background in fashion design, Iskra's expertise spans across fashion, interior design, beauty, lifestyle, travel, and culture.