How One Makeup App Took Over the Industry

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YouCam shows no signs of slowing down, now at 160 million downloads. Add in its sister programs YouCam Perfect (a photo editing program) and YouCam Nails and that number goes up to 260 million downloads worldwide with over one billion visits a month. Calling the entire suite a runaway success wouldn’t be an overstatement.

If you’re not one of the folks obsessively checking out the makeup app, allow us to explain: It uses augmented reality (a.k.a. the same type of technology featured in Pokémon Go, in which a real image is manipulated with 3-D imaging) to allow people to try on lipsticks, blush, eye makeup, faux lashes, contacts, and more, as well as save and share the looks they create. Launched in August 2014 by makers Perfect Corp., the program quickly gained users organically through word-of-mouth from beauty lovers, thanks in part to the social element that allows users to communicate and find like-minded makeup enthusiasts. The typical YouCam-Makeup-er comes back every two days — a major win, when factoring in a stat by Localytics that as of May 2016, 23 percent of users abandon an app after one use.

Image: Perfect Corp.

Though a few companies like Sephora have high-profile apps, in truth beauty brands have been a bit slow to get involved in the space. Explains Giulia Prati, associate director of beauty for the digital strategy and education firm L2, "Only 12 percent of brands covered in our Beauty 2015 Digital IQ Index offered an app on Android or iOS. For the majority of beauty brands apps represent a greater investment than they are worth."

But the companies that do manage to figure out the puzzle now could end up essentially owning a major piece of the future. According to comScore, Americans spend more than two hours a day on their phones, and millennials add another hour on top of that. Any brand harnessing that time now is positioning itself to have a major advantage down the road.

And a major advantage is just what Perfect Corp. has with YouCam Makeup. But try-on programs are hardly new — there have been presto-chango makeover tools in the world for decades. So what is it that the company has gotten to right? We took a look at the climate, gained insight from industry experts, and sat down with Perfect Corp. founder and CEO Alice Chang, Director of Business Development Kristi Vannatter, and Senior Vice President of Business Development Richard Carriere to find out.

The Land of Augmented Reality

As anyone who has charged across the street to capture an Articuno can tell you, augmented reality is hot right now. But the technology that marries digital and physical worlds is especially important in the beauty space. For example, one of Perfect Corp.’s competitors, ModiFace, a try-on "mirror" program featured both on its own and 150 partner apps (including those for L’Oréal and Sephora), has also seen 150 million downloads across its offerings, according to the company. It all comes down to creating the opportunity for shoppers test product out on their coloring before they buy — a factor that’s especially very attractive to the modern consumer. In fact, it’s a large part of why Sephora and Ulta, two stores with come-out-and-play set-ups featuring samples of the products they sell have seen such a sharp rise.

Not surprisingly, then, this is an area where YouCam particularly shines. Perfect Corp. is an off-shoot of CyberLink Corp., a company that’s been providing this kind of software for PCs for two decades. Chang spun off the sister-company to build on technology, already in place, which tracks 100 points on the face to make your makeover results as true-to-life and three-dimensional as possible. Not having to start from scratch was a huge advantage — and it shows. "Most of apps that feature virtual augmented reality have gone and been hired an outside company that has a small team," explains Vannatter. "Alice has led a team of engineers for 20 years and they own 300 patents."

The impact of the work they’ve done is obvious the second you start playing around with any of the three apps in the family. Open YouCam Makeup and the first thing you notice is how smooth and perfect your skin looks in the image captured by your phone camera from the get-go. From there, anything you add on looks remarkably realistic — even delicate shades, which often have to be "pumped-up" to be seen on other apps. It’s also especially good at tracking your movements and keeping the elements in place as you move your face around (as long as you don’t jerk around too wildly). It truly looks as if you’re watching a projected image of your face wearing the makeup, not like someone painted eyeshadow on top of a screen.

Another advantage of having such a large team: They can introduce technical updates and new looks every two to three weeks. This means users are regularly getting new products to try — and buy — if they like them. It’s one of the elements that keeps the users coming back and the app out of the graveyard of unopened downloads.

All this isn’t to say that the brand’s apps are totally without criticism. Though few and far between, the majority of negative reviews center on the hair portion, an area the company is actively working to improve with an update set to roll out in August (currently the hairstyle options tend to look wig-like and hair color changes often bleed into the background). And "beautifying" programs themselves have also gotten some flack from body-positive influencers like Instagrammer Megan Crabbe, who used a before and after makeover she created on a similar app to illustrate the point that the images we see — and compare ourselves to — aren’t necessarily true-to-life. At the same time one could argue that they provide women with an outlet to change anything that might otherwise hurt their self esteem, so it’s not a cut-and-dry issue. But as augmented reality technology continues to grow, it’s an idea that is sure to come up time and again.

Tapping into the Youth

Another key piece in the equation that has made the app such a success with twenty and thirtysomething consumers is just how sticky it is for them. That’s largely due to the social aspect of the app, called Beauty Circle, essentially a Pinterest-esque feed (called the "Look Salon") where users can share the trends they "try on," save tutorials and styles they want to attempt, get advice from "Beautyists" (beauty influencers specially selected by the company), make comments on specific "pins," and find like-minded makeup enthusiasts to follow. "We are building a community of beauty lovers first and foremost," says Chang.

Image: Perfect Corp.

That’s key in today’s climate, where social networking is king. According to Localytics, 90 percent of the U.S. digital media population visits social networks, and user-retention goes up 46 percent on those with some sort of in-app messages feature. Allowing them to communicate by pinning, "hearting," and leaving comments is a way to keep users engaged, connected, and coming back for more.

It’s also smart business sense. Prati explains, "For beauty brands, one of the biggest barriers to online commerce is translating something physical to something digital: rendering that experience of trying on a product in real life onto the digital screen. Merging the social aspect with the rich virtual makeover experience offered by the app promises to be a solid combination for driving conversions."

Another way the YouCam family is winning in this demographic: The social aspect gives women access to other opinions, which is key as folks in this age group tend to seek advice from peers before "experts" who could have hidden biases. Plus, millennials are big on customization (they overall reject any hint of a one-size — or one brand — fits all mentality). Perfect Corp. plans to build on this by not only providing more and more brands in the app (more on that in a sec), but by giving personalized makeup recommendations based on face and eye shape, skin color, and more in the near future.

The Partnership Factor

One of the biggest things that differentiates Perfect Corp. from its competitors in the software-making market is that it doesn’t license its program to other companies. What it does do is partner with existing cosmetic lines to offer links-to-buy, allowing users to try on the lines’ offerings and then purchase off-app directly from the brand (which then kicks back a cut of the sales, naturally). So far names like Elizabeth Arden, Estée Lauder, Laura Geller and Ardell have all signed on. The latest addition might just be the biggest no-brainer for a social app of them all: Kardashian Beauty.

"[Beauty companies] think of us as a customer acquisition tool. Even if you have your own app you’ll still join our platform because we are still sending people to your site to purchase. It’s just a way for you to grab a customer that maybe has never tried on your lipsticks or your eye shadow," says Carriere. Getting the attention of a certain kind of consumer is attractive in more ways than one. For example, magazines also have opportunities to provide content in the Look Salon feed as well as for running co-branded promos, such as Marie Claire did with Solstice Sunglasses to offer frames to virtually check out.

There’s another reason YouCam Makeup is so attractive to beauty partners: The wealth of user data about tastes and buying habits it collects. Beyond the personalization benefits for the consumer, it also allows Perfect Corp. to provide beauty brands with insight, like what lipstick shade is selling in what market, what’s working for different skin tones, or how many colors women have to try on before they find the one they’re searching for. With so many active users worldwide, it essentially becomes a mini global marketing research experiment.

In a nutshell, beyond the superior technology, what Perfect Corp. has done for the beauty industry with YouCam Makeup is created an environment where cosmetic brand can thrive. And for consumers, it has seemingly figured out the magic combination of tailored content provided in the context of an experience that somehow feels personal, real, and intimate. "Each user should be able to create her own smart beauty world by making her own choices, " says Chang. "I think ultimately the goal is that we should become every woman’s virtual beauty consultant."