What does it look like when innovative technology merges the cosmetics industry? What can be fixed?

Transparency in the beauty industry is not just the sound of the future. Not at all. According to many surveys, sales of natural cosmetics increase every year together with high-demand for transparency of supply chain and clean ingredients without harmful additives. Consumers seek the best option in the cosmetics industry as well as in other industries that have long supply chains (food and beverage, fashion, etc.)

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The survey results clearly indicate the consumers approach

Accessing various information about cosmetics through social media, blogs, and articles consumers educate themselves more and more. Well, you don’t hear customers using the word ‘transparency’ exactly, but they often ask more complex questions, which shows they are looking for as much information as possible. Equally crucial information as the ingredients list is the way how the products were made and under what circumstances.

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According to the 2018 FIT Transparency Perception Assessment Survey results indicate that 72% of consumers want a brand to explain how the ingredients are beneficial. 42% of respondents feel that they do not get enough information from brands on ingredient safety. More than 60% of consumers want brands to identify sources of ingredients. As claimed by Labelinsight data (2016), 73% of consumers say they would be willing to pay more for a product that offers complete transparency in all attributes.

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Main problems in the beauty industry

‘Greenwashing’

This term is well known for brands that are covering up scandalous information. For example, green impression pictures, a word with no clear meaning, “greening” of a dangerous product to make it seem safe, etc.

As the demand for sustainable, active beauty products is growing as well as the number of marketing claims that brands are making. Those claims aren’t always clear. Cruelty-free, vegan, and organic certification, the legislation around brands being allowed to make certain claims isn’t as controlled as it seems. As our body absorbs every cosmetic product applied we should be careful when it comes to choosing them. All this means transparency with information integrity is more important than ever.

Counterfeiting

The growth in the cosmetics market has gone hand-in-hand with an increase in counterfeiting, which some associations have quantified as a rise of at least 264% from one year to the next (Ministry for Economics development data). In the EU as a result, counterfeits are estimated at 4.7 billion dollars annually. When businesses lose out on revenue they have less money to invest and remunerate, in fact, this situation leads to loss of jobs, incentives for illegal employment, and an increase in pollution, not to mention the serious damage caused to consumer health. Companies are facing a huge problem with lost trust and a damaged reputation. One of the many issues can be caused by social media and other websites where the consumer is able to buy the unauthorized product. For instance, if you order a face cream by Sisley from Amazon, you cannot be sure whether you buy the original product.

‘Neverending’ ingredient list

Another NDP research reported that in 2017 over half of the women sought skincare products featuring organic ingredients, and 40–50% purchased products without sulfates, phthalates and gluten, a six-point lift from two years ago. In the coming years we expect the demand for traceability to rise even more. However, it turns out not all of the ingredients appear on the list of ingredients. The Environmental Working Group (EWG) mentioned 7 common hidden ingredients that probably our cosmetics products contain (hydroquinone, Ethylene Dioxide, 1,4-Dioxane, Formaldehyde, Nitrosamines, PAHs, Acrylamide). Why do they not appear in the ingredients list? They are not marked as ingredients, but as contaminants.

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Did you know that …Oxybenzone is one of the highest-risk chemicals found in sunscreen? It acts like estrogen in the body, alters sperm production in animals and is associated with endometriosis in women. Oxybenzone may disrupt the hormone system and has high rates of skin allergy…

What can be done to make shopping for beauty more transparent?

Implementing an innovative solution based on blockchain technology could be the answer. Blockchain is a distributed ledger that records information sent by every user on a given network to a database forming a chain — and the whole database is secured by cryptography. In other words, no one can change what is once recorded in the system.

The main idea is to protect data from any falsification or modification, which makes blockchain technology a perfect solution when storing certificates and other critical data about the supply chain, for example.

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How can all of us benefit from the blockchain solution?

Companies can finally prove their claims and build trust with customers. As stated by 3IPK’s CEO Maria Capova this solution provides a traceability system based on blockchain technology which allows the customers to find out the origin of a product and its ingredients as well as the production steps, date and time of natural ingredients (harvesting), packaging, transportation or the presence of allergens via records in an immutable blockchain database. Each product can be identified by unique QR code which is linked to recorded information stored in the blockchain database.

Proof of a sustainable approach

We are being told we can change the future of our planet by choosing sustainable products. Therefore, the way to go is to look for information proving the ethical sourcing of natural raw materials, cosmetics production (energy and water consumption, waste management), packaging (compostable, biodegradable, recyclable) and the product life cycle.

As we already mentioned, people worldwide are demanding transparency across every aspect of their lives, not least when it comes to beauty. From natural skincare and vegan make-up to sustainable self-care products, consumers now want to know how a product is made, whether it has been manufactured in an ethical and sustainable manner, and what are the actual ingredients before they decide whether they trust that a brand’s proposition is worth their money. It is important to challenge companies making natural and organic claims. Consumer demand has only increased over time, so it seems unlikely that transparency will fade from the consumer’s priority list any time soon. If anything, the demand for transparency will only increase as we become more closely connected. Consequently, by boosting transparency, 3IPK’s solution brings benefits for both customers and companies.

3IPK develops blockchain-based solutions automating certification, supply chain and maintenance of processes for aerospace, defence & other consumer goods.