5 Tech Trend Takeaways for Fashion and Beauty Brands From SXSW

Adriana Lee
·12 min read
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SXSW wrapped on Sunday, bringing to a close myriad tech sessions and events, which had a strange vibe this year thanks to the week’s real-time news.

Being at a gathering that celebrates digital innovation, media and culture, while major tech news broke was an odd experience. Austin may specialize in weird, but it doesn’t touch how visitors to the city were trying to make sense of bombshells like Silicon Valley Bank’s implosion and Meta’s about-face on NFTs.

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Awkward.

Here, we take stock of some of the key learnings from the festival.

Artificial Intelligence Is the New Metaverse

The metaverse isn’t dead yet, but it did take a backseat to a hotter tech trend in the form of artificial intelligence. AI loomed large in session rooms, online streams and even casual banter during coffee breaks, because the tech is poised to change multiple industries in numerous ways.

Creative industries are buzzing about generative AI, a form of AI that can create new works — from conversations and stories to photos and artwork — and keep improving as it ingests more data and interactions. That’s not a new development, but OpenAI’s ChatGPT put it on the map. Its quiet fall launch turned out to be rather consequential, because all of a sudden, even people outside data science could see how good intelligent chatbots are becoming. They can understand more, see past mistakes or typos, perform complex tasks in seconds and interact more like human beings.

That’s not great news for everyone. Perhaps for no one, really, apart from the tech giants, at least based on Amy Webb’s shocking 2023 Emerging Tech Trend Report.

Webb, chief executive officer of the Future Today Institute and a professor of strategic foresight at New York University’s Stern School of Business, identified a whopping 666 emerging tech trends that are poised to change modern life and business in fundamental ways, a figure that’s both staggering and even creepy on its face, but focused mainly on AI during the session because of its far-reaching influence on so many fields and other technologies.

Society is reaching a transitional moment, what she called “AISMosis,” and it sounds dystopian.

“The internet, as we know it, is gone. It’s the end. And the implication is that, going forward, everything is information,” she said. The world is swimming in an endless and evolving flood of data, and the only ones that can handle all the compute power necessary to deal with it — especially in the age of AI — are the big tech companies.

Webb said that this is a text-to-everything moment, but that’s just the beginning. The nature of the data is evolving too. She cited a Google research project on smell prints, which is akin to fingerprints, but for aromas. The company created a model from scent data that can predict the makeup of a molecule, similar to the way ChatGPT predicts the composition of a sentence. The work relies on sensors embedded in things from buttons and jewelry to home or car appliances.

That can pave the way for unsettling scenarios, like a digital bloodhound that can sense if a person was in the room based on their body odor. But there’s also a far less dramatic potential in the nearer term that’s more useful than unsettling. Imagine what digital scent can do for sectors like the beauty industry.

AI Could Transform the Fragrance Industry

Brands that offer products like perfume, such as the Estée Lauder Cos. Inc., are already focusing on AI.

“Previously it was a simple questionnaire based on preferences — personality-matching, olfactory nose-matching type — simple questionnaire-based recommendations to AI-powered search tools using insights, and the data driven from online sampling data or social data etc,” explained Sowmya Gottipati, vice president and technology lead for global supply chain at the Estée Lauder Cos., in her session, “Powering Beauty With Artificial Intelligence.”

With AI-powered emotion-sensing, brands are trying to connect fragrances to human emotions, she continued. “AI is really helping in that sense, if you can understand how consumers are feeling when you sample a fragrance. And based on that, we can create a perfect program, recommend a perfect fragrance for you. That’s where AI and the data comes in.” Lauder is already exploring this in a pilot program in China.

Companies already use data science to analyze skin diagnostics, drilling into as many as 100 million data points, so they can offer custom formulations at scale. Custom scent profiles would be another take on a similar theme.

Estée Lauder wasn’t alone. L’Oréal popped by for a session, as well as a happy hour party during the festival. Although it didn’t offer any new announcements, that doesn’t mean it wasn’t enlightening for attendees such as Aurélie Wen, chief marketing officer at Luxurynsight.

“What really got my attention is how L’Oréal very much sees itself as a tech company now,” she told WWD. Indeed, the corporation incubates new ideas and cultivates start-ups, and it even produces hardware in a growing L’Oréal ecosystem of software and devices.

At one time, brands could simply outsource the technical heavy lifting to partners. Today, companies like L’Oréal, Estée Lauder, Procter & Gamble and others are doing it themselves or growing divisions internally to bring more of the development in-house.

“No company can be one thing anymore,” said Wen. “Any major brand today must shift from being a fashion/beauty/jewelry, etc. company to being a tech and data company, on top of their core business.” As AI speeds forward, the effort is logically poised to grow.

Worldbuilding Is Here to Stay as an Extension of Branding

Maintaining metaverse momentum was always going to be a challenge, even without the scandal and collapse of crypto exchange FTX or platforms like Instagram stepping back from NFTs. In fact, it’s quite hard for any buzzworthy trend to maintain momentum, when it would take several years to really mature.

But the need for blockchain utilities, such as authentication, to expand online audiences isn’t going anywhere. In this future, more facets of life will come online, and digital consumers won’t stop craving connection with their favorite people, products and brands. So projects like Decentraland’s Metaverse Fashion Week continue on, new NFTs get minted and sessions like “Worldbuilding With Lego, Pinterest & Amplify” still draw an audience.

The metaverse’s roots in gaming and virtual reality make worldbuilding crucial, though the lessons are valuable regardless of platform. To help marketers wrap their heads around it, Jeavon Smith, chief creative officer at Amplify, explained it as an extension of branding.

“It’s about taking a brand IP or product, placing the audience at the heart of it and then wrapping that world around them,” he said. “We think of worldbuilding as the evolution of brand-building. Brand-building’s somewhat insular — it can be a predetermined place, even a predesigned world. There are certain guardrails with it. We invite the audience in, but it’s always on our terms, not a lot of main player energy.

“Worldbuilding’s different; it goes the other way. Worldbuilding is about extending out, about forging connections in different combinations and approaches, and in doing so, enabling the audience to explore how they want to engage, be immersed and ultimately entertained.”

It’s another form of storytelling that transports and engages, while giving end users or customers some agency. It encourages them to participate, even co-create and ultimately create a fan community.

Pinterest’s global head of experiences Judy Lee frames it with more traditional online platforms: “When you think about social media, everyone else is the main character. But on Pinterest, you are the main character,” she explained. “And so that’s really exciting. Because you’re there planning for yourself and not for anyone else. We often talk about [that] it’s all about for yourself and not your selfie on our platform.”

But on the newer platforms, those selfies aren’t static. They move, interact and allow people to express themselves as 3D avatars. This is birthing a whole new set of opportunities for the creators behind those digital facades.

Avatars Are Going to Become More Important

In the “Salaried Avatars” session, digital producer and storyteller Taryn Southern explained how she got started. She already had more than 750 million views on YouTube, but decided to quit and focus on long-form video. She was also tired of fussing with her hair and makeup to crank out content.

Then three years ago, at the height of COVID-19, Southern came upon technology capable of crafting a custom avatar by scanning her likeness and capturing her voice.

“I think [it took] 11 minutes, 12 minutes, roughly, of me speaking in different tones and with a variety of different expressions, so that they could categorically define, like, this is the avatar when she’s in a neutral facial expression versus an excitable facial expression,” she explained. “And then from there you trained the model, so I didn’t have to do any heavy lifting. And we had an AI Taryn that then could be superimposed on different backgrounds, with a voiceover and a script.

“She could be anywhere I wanted her to be.”

AI Taryn can speak different languages and can work without the need to sleep or eat. Meanwhile the real Taryn hasn’t uploaded a YouTube video of herself in five years. This avatar and others, like Korean viral sensation Rozy, have planted the seeds for a new AI-driven industry of talent to become actors, fashion models, spokespeople and more. Much more.

Consider fusing realistic chatbots, whether invented or modeled after a real person, and adding intelligence like ChatGPT. The tool is already available via API for brands to adopt, and the combination could create better customer service or take the pain out of customizing a product, with a friendly face understanding or even guiding their choices.

That’s just in the 2D internet. In an immersive 3D virtual world, speaking with a virtual store associate could feel just as informative, helpful and natural as consulting a human stylist or sales clerk.

Of course, that leaves plenty more to consider, regarding human employees. Not one of the sessions WWD attended recommended or even suggested replacing people with machines and avatars. But that is one of myriad risks that technology critics worry about.

Instead of worrying about the future, preparing for it is the key.

That was the common theme across numerous topics and sessions, and for Wen, it starts with understanding the important trends that are going on, like the booming creator economy and the new tools emerging for that, as well as where consumers are already gravitating.

“The metaverse is inevitable and is where Gen Z is already spending more time socializing and engaging than in real life,” she observed. “The future of branding is at the intersection of Web 3.0, gaming and utility. Creating value in the real world and in the digital world are critical.”

But it’s also important to realize that this is a rapidly unfolding period of change.

“Generative AI is reshuffling the cards for all creative industries and beyond,” said Wen. “De-noising and prioritization of topics has become increasingly difficult for brands amidst a world where data has never been more abundant and more and more easily available.”

Sprout Social’s Jamie Gilpin framed it this way: “The evolution of technology has never been as fast as it is today. The big piece of this is that it’s never been as accessible as it is today…it is inevitable that we are going to change our behavior.”

To get a good read on these behaviors, brands have to connect with consumers where they are. Today, that’s often on TikTok.

The platform bustles with more than a billion users each month. According to Lorry Destainville, head of global commerce partnerships, 92 percent of users want to take action after watching a commercial and entertaining content; 83 percent of users said TikTok had a role in their purchase decisions, and 61 percent of weekly active users have engaged in social shopping on the platform. What’s important is to realize is that users are in control.

TikTok Is Still a Golden Opportunity

“If you think about TikTok, mainly it’s a very sort of closed-loop exercise, because you may be exposed to a product that you purchase on the platform, and you’re joining the platform again, to tell the world about the product that you purchased and love,” he explained. “So there’s an opportunity for businesses to tap into that. And when we think about the content that is also published by, not just users, but creators. There’s also a media offering to really empower businesses to promote that to their target audience.”

Last fall, the company introduced a limited test for shopping among a few key creators and brands, and at SXSW, it set up a mini studio of sorts, where participating accountholders at the festival can air a livestream shopping spot. “We’re trying our best to deploy the solutions that you want to need as quickly as possible,” he added.

The TikTok session might seem like a respite, a side trip back to the present after a wild, breathless journey into the future. But it’s worth remembering that the app shot to the top of the download charts because of the strength of its algorithms. The company customizes feeds based on signals it receives about the end user, his or her interactions and engagement, so it can display more that it thinks the viewer wants to see. It is a seamless, endless scroll of content designed just for that person.

In case anyone missed it, the session pulled up a slide that read, “The future of digital connection will rely on a brand’s ability to collect, synthesize and identify patterns in social data that can inform key business decisions.”

At present, it looks like the tech world at large got the memo, not just in social data, but everywhere and in various ways, all the while spinning up and ingesting more and more data. It won’t even have to guess: In another example, Webb, the futurist, described a Japanese research project that, by connecting brain scans to generative AI, managed to reconstruct visual images from human brain activity. In lay terms, it means that technology can literally read people’s minds.

Some people might find that exciting. Others undoubtedly will see it as unnerving. But either way, Luxurynsight’s Wen appears to be right: Every company must be a tech company now. With the future coming this quickly, doing anything less risks getting left behind.

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