The beauty industry has a cosmetic waste problem of staggering proportions. From mountains of packaging to unsold products, makeup waste is costing brands financially and eroding their sustainability goals.
The industry produces 120 billion units of packaging annually, yet 95% of cosmetic packaging is thrown away, much of it ending up in landfills or oceans.
But packaging is just the tip of the iceberg. Hidden waste streams (such as returned products, unused testers, and excess inventory) further compound the issue.
What’s more, regulators worldwide are responding with stringent Extended Producer Responsibility (EPR) laws.
- EPR laws require beauty brands to manage and finance the recycling and disposal of their product packaging.
- Regions such as Europe, Canada, and parts of the United States, including California, have already adopted these regulations.
- California alone mandates beauty companies contribute $500 million annually ($5 billion over ten years) to combat plastic pollution.
AR virtual try-ons provide a practical solution to this waste problem by enabling consumers to sample products digitally before buying, significantly reducing physical testers and minimizing returns.
This digital sampling approach creates a more sustainable beauty experience that addresses both consumer needs and environmental concerns.
Tackling tester waste through virtual try-ons
Traditional cosmetic testers significantly contribute to makeup waste, as products and applicators are frequently disposed of after minimal use.
Each tester, whether a foundation bottle or eyeshadow palette, often has a short lifespan and quickly becomes unsanitary or damaged, requiring frequent replacements and generating considerable cosmetic waste.
Augmented reality offers a compelling solution by fostering waste-free makeup. Shoppers can digitally experiment with numerous shades and styles instantly, directly from their smartphones or through in-store digital mirrors.
This virtual experience eliminates the need for disposable applicators and prevents physical samples from becoming waste after brief trials.
The costly reality of cosmetic returns
Unlike unopened goods, returned cosmetics often cannot be reshelved. If a customer tries a foundation and sends it back, the retailer must discard it for safety reasons.
These returns represent more than just makeup waste. They come with cascading financial impacts:
- Shipping costs for returned items, often borne by the brand.
- Processing and handling fees to inspect, restock, or discard the returned items.
- Inventory write-offs when returned products are unsellable.
- Increased customer service overhead from managing the return experience.
- Lower customer satisfaction and loyalty.
While return rates for beauty are lower than those for apparel, they’re rising as online sales grow. Recent data shows online cosmetics return rates climbing from ~4% in 2020 to around 10% in 2022.
Virtual try-on tools directly address this problem by helping customers get it right the first time. For instance, foundation shade finder apps use augmented reality and AI to analyze a shopper’s skin tone via the camera and recommend the best-match foundation.
This prevents the common scenario of buying two or three shades to test at home (or “just in case”) and then returning the mismatches.
Likewise, AR lets a user see how a certain lipstick or eyeshadow looks on their face before purchasing, making them far less likely to regret the purchase. One survey of over 4,000 beauty shoppers found that roughly two-thirds of those who used AR when deciding on a product were less likely to return it.
The impact on cosmetic waste reduction and cost savings can be significant. Fewer returns mean fewer products going to the trash after one use, and lower reverse-logistics costs for brands. Even a 5% to 10% reduction in returns can save millions in a large retail operation.
Smarter decisions with AR data
Perhaps the most strategic long-term benefit of beauty AR tools lies in the data they generate. Every virtual try-on or shade match is a piece of insight, revealing consumer preferences, popular shades, and even gaps in the market.
Try-on data can inform inventory management, ensuring brands produce and stock what will actually sell. For example, if an AR app shows that tens of thousands of users virtually tried a new plum lipstick and loved it, the brand can confidently ramp up production of that shade.
On the other hand, if a shade is frequently tried but seldom purchased, it’s a signal that the color or formula might not be appealing. The company can adjust its strategy (improve the product or produce less of it to avoid overstock). This kind of demand sensing was hard to achieve in the past, but AR provides it in real-time.
MAC Cosmetics, for instance, uses virtual try-on data to adjust stock levels in different regions, ensuring stores carry the hues local customers are interested in. This is a clear waste-reduction tactic that prevents excess inventory from ending up on clearance or in dumpsters.
Eco-conscious consumers are changing the game
Consumers are increasingly shifting toward sustainable beauty and expect brands to do the same.
Surveys indicate that 63% of beauty shoppers say “clean” or eco-friendly beauty is important in their purchasing, and almost half are willing to pay more for sustainable cosmetics.
Real-world examples back this up. Sephora’s investment in AR mirrors and apps not only reduced its dependence on disposable testers but also drove sales. Its in-store AR mirror trials led to a 31% increase in sales and significantly higher conversion rates for shoppers who used the AR versus those who didn’t. In fact, virtual try-ons can lead to a 2.4x increase in purchase likelihood, according to TechCrunch.
Case study
City Lab Cosmetics partnered with Arbelle to launch a virtual lipstick try-on tool powered by advanced AR. Using real-time facial mapping, customers could design and test custom lip shades online, making the experience more personal, hygienic, and fun.
Even smaller brands see benefits: clean beauty label ILIA observed a reduction in makeup waste thanks to virtual try-ons, as customers could find their ideal product without trial-and-error buying.
Final thoughts
The common thread is that sustainability and profitability are not at odds — with the right tools, they reinforce each other.
The path to sustainable beauty at scale will require combining material innovations (recyclable packaging, greener formulas) with digital innovations that reinvent the customer journey. Augmented reality is leading this digital transformation.
For senior decision-makers, investing in AR try-on and AI shade matching solutions now can pay dividends in both reduced waste liabilities and enhanced brand competitiveness.
Providers such as Arbelle offer specialized beauty tech solutions that can be integrated into e-commerce and in-store experiences, helping brands quickly implement virtual try-on tools that deliver tangible results.
Contact us to find out more or to get started.
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