BEAUTY AND THE BLOCKCHAIN : HOW BLOCKCHAIN TECHNOLOGY IS CHANGING THE BEAUTY INDUSTRY ?
of blockchain technology was laid in the early 1990s with the work done by
cryptography experts Stuart Haber and Scott Stornetta. Starting from the
concept of the "hash tree" patented by Ralph Merkle in the 1970s, the
two experts managed to approach the modern definition of blockchain, although
they did not fully conceptualize their work.
Years after that,
Blockchain was invented by Satoshi Nakamoto between 2008 and 2009 along with
Bitcoin. It is still unknown whether this Satashi Nakamoto is a person or a
group. After he was sure that this technology was working properly, he
disappeared after an e-mail stating that he donated it to people and that he
would concentrate on working on other technologies.
on to the effects and use of Blockchain on the beauty industry, let's briefly
recall what blockchain is.
In the simplest
terms Blockchain is a
distributed data recording system that provides encrypted transaction tracking
and created to ensure mutual trust and consensus. Contracts, digital
identities, logistics, almost any type of asset and much more can benefit from
blockchain. It is not a database because the saved data cannot be changed or
deleted again. The main thing that makes this technology so great is that it
does not need a central authority. Transactions are
not managed by just one party, instead all transaction history is recorded in a
decentralized and distributed ledger.
As for why it
is so attractive to industries?
industry where blockchain technology is used, all transactions performed on
blocks are public.
made on the blockchain cannot be changed by an outside intervention.
and security are prioritized in sectors where blockchain technology is used.
5 Uses of blockchain for beauty brands:
Supply chain traceability
Knowing where a product comes from and how it’s made is
important in any industry. But the health and beauty space is where consumers
have been the most vocal about the need for transparency.
The UK-based cosmetics vendor Cult Beauty has
begun working with blockchain firm Provenance to launch an in-store system called ‘proof
points’. Brands selling through the site will be able to verify their claims
about a product via open-source information from NGOs and lab reports, such as
vegan ingredients or sustainability. This allows consumers to make informed purchasing
As covered in the Netflix series Broken, counterfeit cosmetics
products contain a variety of harmful materials including lead, glue, and even
arsenic. As sellers become savvier with imitation packaging and selling through
third-party sites like Amazon, it’s becoming more difficult for consumers to
spot fake (and potentially dangerous) cosmetics.
The pharmaceutical company Seqens has developed a blockchain platform designed to
authenticate both products and their raw ingredients via a digital ledger.
Consumers will only need to enter the batch number onto the secure website to
receive a full breakdown of the manufacturing and sourcing process, which helps
build higher levels of brand trust and combat counterfeiting.
Loyalty rewards programs
The beauty industry has been something of a pioneer when it
comes to successful loyalty rewards programs.
Sephora’s tiered Beauty Insider program now boasts over
25 million members worldwide, a major indication that it offers consumers
genuine value. But Sephora isn’t putting its eggs in the one basket. The beauty
giant, along with its rival Ulta Beauty and major brands including Glossier and
E.l.f., is also signed up to the cryptocurrency rewards program Lolli. The
platform, which boasts over 1,000 online merchants, allows consumers to earn portions
of bitcoin as a reward for purchases.
“We saw it as a way to distribute bitcoin to more people,
way easier by not making them have to be an investor to get into bitcoin. They
could just be a shopper, which is something that everybody [is].” Says Alex
Adelman, founder of Lolli.
Rather than being tied to one retailer, consumers are free
to spend – or save – their tokens however they choose. This empowerment of the
consumer is an extremely attractive value proposition that beauty brands are
using to build stronger emotional connections with customers, especially when
cryptocurrency investing remains such a male-dominated area.
Using NFTs to mix branding with art
An NFT is a digital asset that has been recorded onto a
blockchain ledger, meaning it can be verified as the original of that specific
file. It could be an artwork, a song, or even a funny GIF. The value of NFTs
comes from their scarcity; people who buy NFTs are purchasing the prestige
of ownership, driving demand for rare and unique collectibles.
The Berlin-based studio Look Labs caused a stir in
April this year when it launched a high-tech-themed perfume called Cyber. It
was accompanied by an exclusive NFT artwork containing a digital representation
of the scent using NIRS data.
But it’s not only the luxury market that stands to
benefit from NFTs E.l.f. recently offered its customers the opportunity
to buy from its #CryptoCosmetics collection, digital
reproductions of their most popular products – dipped entirely in gold.
Leveraging big data to build personalized
Consumers don’t just want a brand to know their likes and
dislikes, but to customize products for their needs.
Offerings such as Living Proof’s adjustable
hairspray and Bite Beauty’s Lip Lab, where consumers can customize the
share and finish of their lipstick, have found considerable success.
COSBALL, designed by a leading South Korean
skincare manufacturer, is the world’s first fully customizable skincare range.
Their goal is to build a beauty and wellness ecosystem where big data can be
gathered and analyzed to refine formula recommendations. Consumers
upload a detailed skin analysis via their smartphone camera to a blockchain
system. This creates a peer-to-peer system of open data where recommendations
become more tailored over time, rewarding customers with COSBALL tokens that
can be redeemed on new products.
Given the secure nature of blockchain, this means consumers can share information that improves their brand experience, without needing to worry about hacks or misplaced data. 1.
5 Cosmetic and Beauty Companies Using Blockchain
1.EM Cosmethics by Michelle PHAN
EM Cosmetics founder and beauty influencer Michelle Phan
revealed in one of her interviews that she was very intrigued by blockchain
technology and cryptocurrencies in recent years. Thus, she made sure to
implement it in her brand relaunched platform. Em cosmetics partnered with
Lolli, a cryptocurrency rewards company in which Michelle Phan invested $3
million. This collaboration allows customers who place direct orders to earn
4.5% of Bitcoins via a Lolli browser extension, which works similar to the
usual cashback, but customers get bitcoin instead.
Beauty is one of the first brands that implemented blockchain
technology to counter greenwashing in the beauty industry. Through a
partnership with Provenance,
Cult Beauty provides a digital platform that empowers brands to improve their
transparency through a “Proof Points” system.
Look Labs is
a fashion and beauty design company that innovatively merged perfume with
blockchain technology, specifically NFTs.The Germany- based brand has recently
designed Cyber Eau de Parfum, the world’s first digital fragrance, created by
Sean Caruso, a Canadian artist.
Designed by a leading south korean skincare manufacturer, CosBall is one of the world’s first personalized skincare solutions. Powered by blockchain technology, CosBall created a beauty ecosystem where big data is stored and analyzed to ameliorate skincare formula recommendations. CosBall improves its customers’ brand experience by creating disposable skincare capsules and building customized skincare regimens.In addition, it rewards them with CosBall Tokens that are redeemed with every new purchase.
Through a partnership with Provenance, Purearth helps
customers discover the origins of its product and creates a genuine connection
with them by letting them view the product journey from start to finish. Customers
can access all this information through the QR codes printed on each of CosBall
products.In an interview with CosmeticsDesign- Asia, Pureearth founder Kavita
“Purearth gathers and presents information and stories about its creations, sourcing and supply chains formulation and packaging including verified data to support them. By connecting this information in-store on pack and online. Provenance help the customer discover the origin journey and impact of Pureath creations”2
In sum, thanks to
Blockchain everyone will be able to see what is in every cosmetic product they
buy and make their choice accordingly. These uploaded data about the product
will not be able to be uploaded without the approval of all other users. Makes
it easy to share. The goal is to provide consumers with a high level of
transparency and traceability throughout a product's lifecycle. Blockchain
is helping to usher in an era where customer-centered retailing reaches new
heights. Consumers can make better-informed purchasing decisions, be empowered
by more flexible loyalty initiatives, and have access to unique and
personalized product offerings.
The beauty brands that get on board with these developments
now will be the best positioned to build lasting loyalty in the future and