My first time buying lipstick online went poorly. The lipstick I received in the mail looked nothing like the colour on my screen and was a terrible match for my skin, leeching the colour from my face. In the following years, there has been scant improvement.
The Internet has promised to revolutionize retail, but in the cosmetics industry this promise remains unfulfilled. Consumers prefer to try products before they buy them because it can be almost impossible to tell if any given product will work for their skin while shopping online. This is unsurprising - online sales channels like Amazon are geared for selling books and hard drives, and are ill-suited to more personal products like makeup and skin-care. Cosmetic customers are practically forced to stick with brick-and-mortar stores.
For up-and-comers in the cosmetics industry, this is a dismal state of affairs. Established retailers are effectively the sole gatekeepers of the industry. Retailers can offer cosmetic brands more stability then a direct-to-consumer model, but they can take 70% of the sale. Most brands who are in major retailers still struggle to become profitable in the first few years, and those are the lucky few who can even get a retail partner.This is why smaller brands tend to rely heavily on D2C sales in the early days.
The pandemic made things even worse for most brands where most retail channels slowed considerably or stopped altogether.Without a stable retail partner brands were forced to focus on online direct to consumer distribution. With clever advertising and a good social media presence direct website purchases are often more profitable than retail. With an online sale on a brand’s website 100% of the money goes to that brand. Online experience is crucial to profitability.
The problem, of course, is that the online experience is still bad. How do we fix it?
There are companies that specialize in facial recognition systems to help customers find cosmetics that will work for their skin. The main solution used for makeup is virtual make up try on. These services take a users picture and using computer vision and a variety of algorithms show users what the product should look like on their face.
Virtual makeup shows users what a product will look like on but it doesn’t explain why consumers should buy. Unlike a store when users tryon the product, they aren’t able to drill down and read any details about the products. A red lipstick from Chanel looks the same as one from Dollar Tree. It doesn’t make it obvious why your product is the best, making the experience generic.
Alot of consumers aren’t sure what product will suit them best even if they can see what it will look like on. In store this is solved by asking a makeup artist for help. Some sites offer the ability to book an online session with a representative, but that involves finding a time that works, placing it in your calendar and waiting. Some companies have a chat functionality, the problem is that most smaller brands can only offer limited hours, with email responses in off hours. Also the person answering the request cannot assess or analyze the skin in a scientific way.
Virtual makeup services have a perverse incentive to alter user’s faces into something that is not achievable with makeup alone. This is done to make the customer more inclined to share the image online. Currently there are no regulations or standards when it comes to this technology. Cosmetic companies are limited in the choice of service provider, and aren’t necessarily aware that these images may not be true to life. Over the long haul unrealistic images lead to customer dissatisfaction. Over the long term it can decreases the likely hood consumers will repurchase.
Showing me rendered images what my face would look like if I was scarlet johansson, may make me want to share the image online, but won’t help build trust. Brands should show customers what’s going to make their customers look good in real life not manufactured facilities.. Over the long haul the technique of generating unrealistic images will destroy consumer trust and their willingness to re-buy products.
My first time buying lipstick online went poorly. The lipstick I received in the mail looked nothing like the colour on my screen and was a terrible match for my skin, leeching the colour from my face. In the following years, there has been scant improvement.
It is harder for women of colour to buy cosmetics. They often leave retailers without buying anything because they can’t find products that suit their skin. Even conscientious retailers can face difficult trade-offs in catering to women of colour, as any kind of minority product can divert shelf-space away from higher-volume items.
Finding long-tail products online may be the best option for those that struggle finding products in store. Unfortunately, buying new makeup online is invariably a gamble. Screens render colours differently, so it’s impossible to tell what shade you will actually get. To make good decisions about skin care It often feels like you need a masters in biochemistry. It’s hard to feel confident in your purchases unless you are able to try it first.
There are companies that specialize in facial recognition systems to help customers find the right product for them. Most popular of this are virtual try on systems that allow users to “try on products' ' using their webcam. These services use facial recognition technologies to locate various key regions of the face, the eyes, the lips, the cheeks and superimposes a makeup layer on the user’s face. in theory this would be a great way for people with darker skin tones to buy makeup. However historically technology has been created for white people. Film couldn’t render dark skin. Foundation only worked on lighter skin tones. Facial recognition software doesn’t work as reliably for people with darker skin.
Virtual try-on systems fail women of colour. Assuming the technology even recognizes faces with dark skin tones, the next problem is that try-on services may alter the user’s face to appear more “white”. Faces may become edited. Face shape changes, noses made thin and skin tone lightened, resulting in an unnatural look that reinforces Caucasian ideals of beauty.Promoting an ideal standard of beauty that is euro-centric is not going to be effective in western markets for very long. Increasingly diverse demographics will lead to increasingly diverse standards of beauty. Brands need to offer solutions that work for people of all skin tones and genders, and pick suppliers and technology partners that represent those values.
The next hurdle is user-experience design. An intelligent recommendation system ought to be able to select intelligent defaults. When a POC goes to try on a lipstick shade, the first shade is one that looks good most users but it’s often too light for dark skin and looks bad on them. Good IT systems should be able to adjust the first product a user sees so that it is tailored to that user. Online retail is the one place where it should be incredibly easy to find the right products. Unfortunately what we see time and time again is that tech companies over look women (and the industries that serve them) and minorities.
Brands who have these problems with their technology run a deeper risk. It doesn’t look good when a system is biased.
There is a solution.
Buying cosmetics online should be even easier then looking in store. Online search engines can instantly search though a catalog of a million products, technology can assess a user’s skin with incredible accuracy and can build custom experiences for users. Quizzes and facial recognition services should make online cosmetic purchases easier, not harder.
I firmly believe that AI tools, especially recommendation tools can help women with dark skin tones find products that suit their skin, if these services are designed well.
Tejo is a skin analysis system. Using facial recognition technology and AI we can analyze the face for a variety of problem including:
The system will recommend various services and products well suited to the customer’s needs.
Tejo comes with product information loaded in and can ask users about their current medications and skin care regimens, to make sure that all the products used will be compatible with their current lifestyle and not leave customers with rashes or burns.
Tejo can then follow up with customers and make sure that they received appropriate education about their treatment and additional products they should purchase the help maintain the longevity of their treatment.
Its easy for aestheticians to forget to inform customers about all the products they are using during a facial. It’s easy for customers to forget what products were mentioned to them. Tejo offers the ability to explain to customers what products were used during the treatment and WHY.
Once a customer’s main concerns are known we can help follow up with them and show them what additional treatments you offer. We can help explain
When providing services it can be easy to forget to recommend a change in a customer’s current skin care regime. This is why Tejo follows up with customers and recommends aftercare to customers. The idea is that Tejo will systematically help customers upgrade their routines while providing customized support for product purchases.
One of the easiest ways for a spa to make more money is by selling products to their customers. Yet many service providers forget to, or think that suggesting products will ruin their relationship with the customer. That’s not true, customers are coming to your spa to learn how they can improve their skin. When given the right information and enough time to consider their decision they will appreciate the extra care that you gave.
Tejo offers a number of tools to help customers purchase products, and your staff easily search and compare products that you carry. These include:
Tejo allows customers to track their skin progress from anywhere in the world. You can send reminders to check in, track their skin and suggest additional treatments.
Tejo offers customization to help you create an experience that is unique to your spa. You can choose what questions to ask and what features to detect and show customers.
All you need is an internet connection. No need for a commitment or an expensive machine.
Due to Advancements in facial recognition the need for a special device to do skin analysis are diminishing. Let’s compare machines to Tejo.
Machines offer a consistent way of taking pictures and lighting the face. However Tejo uses algorithms to automatically account for the lighting conditions so that consistency is no longer needed.
Most light spectrums are visible to your standard camera. Advancements in AI are able to detect the same or similar things to the expensive machine.
Unlike machines, Tejo has a vested interest in your success as a company. Our primary goal with this technology is to help you foster better relationships with your customers and sell more products.
Tejo uses the latest standards to make sure your data is secure.
Unlike other companies with Tejo you are able to download and keep your own data.
Tejo can be translated in to any language. It can support most languages and currencies.
Watch it here:
https://www.youtube.com/watch?v=U1Q95099WHY
This transcript was computer generated and might contain errors
Rachel Baker: I guess. I'll start by introducing myself. Hi, I'm Rachel Baker, the founder of TEJO.CA, We provide an AI skin diagnostic tool for the cosmetics industry and spas. So we help spas and brands make more money and get more conversions. I have two lovely speakers with me today. Who've agreed to do webinar. Alan Kaufman and Stefan. How about Alan? Would you like to introduce yourself?
Alan Kaufman: Hello everybody. I'm Alan Kaufman and my history over the years. I ran a family business for 30, Some odd years, in jewelry. Manufacturing, I sold that business to Berkshire Hathaway and worked for them for 10 years. And today I do some consulting.
Rachel Baker: And Stefan.
Stefan Pagacik: Hi everyone, Stefan Pagacik, I've had a career in technology product development. I've worked for Apple and Adobe have also worked as an entrepreneur started. A Marine Science accelerator here in Massachusetts and for the last 15 years, I've been Focused on impact and sustainability from a technology perspective.
Rachel Baker: Okay, my first question for you Stefan is why should beauty and cosmetic companies care about sustainability.
Stefan Pagacik: How come Alan doesn't get the first question?
Rachel Baker: the two of you can answer it has
Stefan Pagacik: Not. Go ahead,…
Alan Kaufman: You want me to answer first Stephan? ie,…
Stefan Pagacik: Alan. Go ahead.
Alan Kaufman: because their customers want them to So, research is showing that 75% of shoppers, regardless of their generation. So many people believe that, it's just the younger generation who care. But when you see the breakout amongst all the different age categories, it's pretty constant. say they care versus how many people say? They don't care. 75% of their customers. That's pretty driving reason.
Stefan Pagacik: That makes a lot of sense, I would have Alan, I think I would have gone with the 21 to 34 demographic. And again, I don't have your background in the cosmetics industry.
Stefan Pagacik: But I would have gone with that graphic. Why people should care. it's because as businesses we don't operate in a vacuum, everything that we do is connected through communities that we work in that are employees and our leaders work and live in and so It may not be readily apparent to a lot of people, but the actions that we take the decisions that we make the policies that govern our businesses do have an impact in these communities and they can be felt either from An environmental perspective or a social perspective and we need to start paying attention to it. Because as Allen said, The customers care about it and they care about it enough to switch brands.
Stefan Pagacik: So that's, one of the many reasons why we do need as an industry to look at this and say I want to produce a product that's really great for my customer base but I want to do it beyond just making We want everyone looking good but we want to do it in a way that's sustainable and healthy for our planet.
Rachel Baker: So what specific areas of sustainability should cosmetic companies pay attention to and make certain that they report on regularly?
Alan Kaufman: I can start with that. it starts with their supply chain.
Stefan Pagacik: Yeah.
Alan Kaufman: So there are so many issues that they can work on to reduce the energy that you use, reduce the water that they use etc, then it drives to the design of their products. And they can use AI to forecast, how all these things will help drive this sustainability.
Stefan Pagacik: So Joanne had a question. I don't know. Rachel, are we going to take questions during the presentation? I'm happy to, answer.
Rachel Baker: I'm sure we can also, I think it might be easier if the questions get put into the chat, and I can, Feel them.
00:05:00
Stefan Pagacik: Okay.
Rachel Baker: Joanne,…
Stefan Pagacik: Yeah, no, no. Go ahead.
Rachel Baker: if you want to just put your question there and that'd be fantastic.
Stefan Pagacik: Yeah, so I just following up on what Alan said. I think that I look at it from a product perspective, being a product developer myself, I would look at what goes into building and making that product and
Stefan Pagacik: whether or not the materials or the ingredients we're locally, sourced does it have to travel a great distance? Then you start to get into scope three emissions if you're measuring your carbon footprint, which is a tough thing to do which is very important. So I would look at How the product is built. If it's if it's, makeup what is it that you're putting into this product? How is it being sourced?
Stefan Pagacik: The people that are providing you with the base for creating that product, how sustainably are they acting or not? And that's often the toughest hurdle for companies to overcome whether you're in the cosmetics industry or really any industry is going into your supply chain is Alan pointed out and finding out how they are treating sustainability and how they're reporting on it and what their policies are and whether they line up with what you consider to be good sustainable business practice.
Rachel Baker: Can you talk to me about what type of research process a company should go through in order and Validate their third party suppliers.
Stefan Pagacik: Allen, do you want to jump in?
Alan Kaufman: I think the key here is for them to have someone on their team or a third party. That's Got the expertise Because most management teams accept in very. Large companies wouldn't necessarily have that expertise
Stefan Pagacik: Yeah.
Alan Kaufman: So I think that's kind of a driving factor, for me and I would add going back to the last conversation that Stefan was just saying. I think it's also important to know that many of the larger retailers Part of when they're working to their supply chain. They're looking at their vendors to meet certain sustainability.
Alan Kaufman: Areas in order to help the retail and meet their goals. So for all those, in the cosmetic industries who are vendors to retailers, if they're not already, they're going to be challenged to bring certain sustainability levels to the table in order to maintain their relationships with those retails.
Stefan Pagacik: Yeah, one of the hardest parts, Rachel in this area is trying to not only quantify but validate what the supply chain is doing, what these vendors are doing because very often they'll just report on what they can control or what they see benefits. Them makes them. Look better. Ie greenwashing And that unfortunately gives it distorted picture from a cosmetics industry perspective. It gives it distorted picture as to how sustainable your business really is but it's really critical to find out and,
Stefan Pagacik: Part of the problem that this industry having is around verification and authenticity of data. It's very, very tricky, it's time-consuming. And as Alan just pointed out, You've got to have the resources. You've got to have people who have expertise who know how to ask the right questions and you can't be afraid of asking those questions If you're afraid of a supplier dropping out of your ecosystem, simply, because you're asking tough questions. That's the wrong motivation. You need to be prepared to say, Look, These are our governing principles. If you're not in alignment with those principles, whether it be fair wage, whether it be sourcing, materials and fair, working conditions, whatever that might be, you've got to be able to ask those hard questions, and not be afraid of the supplier getting up and saying, sorry, I don't agree with that. I'm going on my separate way. You have to be okay with that if
00:10:00
Stefan Pagacik: A really truly going to build in and bake in sustainability into your operations.
Alan Kaufman: and if you look at the pattern over the years of where the retailers have focused in, requiring the vendors to meet certain conditions, it all started with social compliance, And in supply chains around the world. Many of the factories, of course using child labor. We're using Unworkable conditions and there are many situations such as fires that caused issues and that brought along, I want to say about 10 years back to where many of the major retailers created their own.
Alan Kaufman: teams that each vendor was required to show what their total supply chain was. And then inspectors would go into these facilities around the world to check out the conditions and firsthand. I saw that, if there was a problem, they would give you an opportunity to fix it, but if you didn't fix it, you could no longer use that vendor and they were willing the major retailers that I worked with. we're willing to not take a product that was very important to them. If the social compliance goals couldn't be met and I think sustainability now is stepping into that same area. And if
Alan Kaufman: As time goes on it, then design able to throughout the whole supply chain. Confirm this, that the meeting sustainability goals, no matter how good their product is, and how much money the retail is making on it. Because the retailer needs to reach out to their consumers and assure them. That this sustainability goals are getting accepted and met, then you could lose that customer.
Rachel Baker: What are some good examples of questions that? You should be asking with respect to sustainability.
Stefan Pagacik: .
Stefan Pagacik: If you're trying to determine, how sustainable a company. if you're asking somebody in your ecosystem and your supply chain, you want to ask them how they source their materials. First of all, in terms of building the product base that you're eventually going to acquire you want to ask them about their fair, labor rates. I mean, they're fair, labor practices, wage rates,
Stefan Pagacik: You want to find out what carbon accounting they're doing for their carbon footprint. There are just a whole list of questions that come under ESG and it depends if it's an environmental question, if you're asking, How do you treat waste common? how many gallons of water do you use? Do you recycle, do you do any of these things and then you have to prove it and that's the other big part of this is you've got to be able to ask for some proof and that proof usually comes in the form of documentation or management, data collection that can be verified by a third party. Usually, in audit firm
Stefan Pagacik: so you've got to be able to, and this is time consuming. It's painstaking, it's not cost-effective at least initially, but once you get going on this, and you bake it into your own operating practices, it becomes after the 10th company, it becomes so much easier. and once you get a system and a process in place, You can then make it part of your whole sustainability agenda and it just becomes simpler to determine whether or not you want to work with a vendor.
Rachel Baker: Great.
Rachel Baker: So, Sabrina asked is animal cruelty a part of sustainability.
Stefan Pagacik: Yeah, For sure.
Rachel Baker: Yeah.
Stefan Pagacik: I mean, I always like to give the example Rachel of A company that uses animals for testing for products. And then chucks the carcasses in a river that's used for drinking water. and I mean these kinds of practices have happened in the past, And you really have to. Stand up, it because companies are forever trying to increase their margins, right? So it might be more expensive to go with another supplier that doesn't do that. But at the same time you have to ask, is your What hit Are you willing to take by continuing to go with the supplier that is demonstrating cruelty to animals, but gives you your product at a lower price.
00:15:00
Stefan Pagacik: And is it worth the five or seven percent hike in margins vis? The PR reputational risk And hit that, you'll take from that.
Alan Kaufman: and reputational risk, I think, is You can put it at the highest level, so I'm just going to share an example, from my experience of working for Warren Buffett, He sent all of his executives every year in the first week of January, a letter that you were required to sign and send back in. Basically, it said The worst thing you can do on behalf of our company is to create a PR mess. So do not in any way, shape, or form ever do. Anything that if it was reported on the front page in the New York Times, you wouldn't be proud to have them. that was the one thing. We heard from him every year. And so apply that to sustainability. If we were to put carcasses in the river, I think we would not have met the signature. We put on the letter.
Rachel Baker: So sort of to that point what are the branding and positioning advantages for cosmetic companies that engage in sustainability reporting?
Stefan Pagacik: I think they're tremendous. I mean, Alan you want to take that first? And I mean, I'll just
Alan Kaufman: I think if you look at All the different materials and PR there to put out by major companies. Right now, you see How well, they know and understand this and how they go about it. And I just brought one example with me but many of us Receive multiple.
Alan Kaufman: Catalogs in the mail every day, every week, from all the different, cruise companies and everything. And one of the better-known cruise companies being liking, I know everybody can see this but here they are in a catalog that they're trying to sell cruises on and they position a two-page article on their sustainability issues in the middle of that. so, I think
Alan Kaufman: When you have a product, that's in the marketplace, adding your sustainability points. Very concise, and very direct on the packaging. Is critical because you want to bring it to the consumer's attention because the consumer cares. I think that'd be my driving point in the cosmetics world.
Stefan Pagacik: Yeah, I think having worked for product companies. The branding and packaging and labeling. And of course, you got to be careful with your packaging to make it sustainable too. it's really bad If you splash all over the packaging that, you're sustainability conscious. but the packaging is plastic that eventually makes its way into the ocean. that really doesn't help you. You have to think about this from again. the moment the product is formulated to when it gets packaged and delivered to the consumer, and you have to think about that journey that the package is going to take everything from
Stefan Pagacik: the materials that you use to package it to how it's being handled transported, and then eventually put on the shelf and with that Effort. You can create a great branding, mechanism that will separate you from other cosmetics companies by demonstrating and showing that you really think through this entire journey. And I think from a consumer perspective you'll get greater appreciation and consumers will be willing to pay a higher price if you give them that journey and you tell them that you are making this investment. in sustainability for your product, everything from the packaging to the transport, to the shelving
Stefan Pagacik: They'll pick up on that and they'll be willing to pay a higher price for it because they know that what they're getting is a product from a company that really does care about this topic.
Rachel Baker: Awesome.
Rachel Baker:
00:20:00
Rachel Baker: Joanne. Fowler in the chat was talking about how there's Pfas is the Can. be quite harmful, how should
Rachel Baker: Brands.
Rachel Baker: Manage if regulation isn't up to par with their own personal standards.
Alan Kaufman: I think one of the best marketing tools that you can have is,…
Rachel Baker: Of.
Alan Kaufman: if you can say that you reach well beyond the standards that exist, And so if their standards aren't there to assure that then I think individual companies, there's an opportunity to say we go beyond. we don't believe the standards are challenging us to the true level that they should. And we reach way beyond those and then they share what they are doing. That's above and beyond whatever the regulations are.
Rachel Baker: All right.
Rachel Baker: Are there any worldwide rules for ESG?
Stefan Pagacik: yeah, they're different standards for SFDR which is in Europe now, which is on climate risk reporting. The SEC is going to come out with their own set of climate disclosure. In fact I just read this morning that California is introducing a bill Specifically, for climate risk and climate disclosure reporting their own statewide disclosure. So in addition to Potentially reporting to the SEC. If you're a California-based company, you would have to also report to this particular legislation that Governor Gavin Newsom is trying to push through in California, and in all likelihood, it will pass
Stefan Pagacik: Because they deal with GHG emissions more so than other states here in the US.
Alan Kaufman: And I think history shows that if you want to know where regulations gonna go, you watch California, it takes the rest of the country,…
Stefan Pagacik: Yeah.
Alan Kaufman: a long time to catch up with California's so far ahead and some people think overly but if you want to know what you got to prepare for in the future watch, California.
Rachel Baker: Yeah, so is it fair to ask whether sustainability reporting is important to top and bottom line growth for companies? why not?
Alan Kaufman: One repeat that please.
Rachel Baker: Is it fair to ask whether it's sustainability, reporting is important. To top and bottom line growth for companies.
Alan Kaufman: I don't know what the reporting itself. I mean, it's an indirect factor. I think if the reported it helps them with their customers. So I think it's an indirect line versus direct line.
Stefan Pagacik: Yeah, it's important. if it shows that there are ways for business process improvement within the company,…
Rachel Baker: Okay.
Stefan Pagacik: And that means And when I say materially, I mean financially. What are the material and Ramifications for that, those might not be readily available, they might not jump out at a company right away. And it may have to be something that happens over time. And that's something that The company will have to weigh short-term gain or loss versus long-term gain. From something like that. And only the company can answer that.
Alan Kaufman: And at the beginning of the conversation, I jumped out and said customers with a main reason for brands to look at sustainability. But in a report put out by Deloitte, they referred in addition to the customers to board members and regulators as being key drivers of this, So, most of the larger companies of course have outside board members and…
Stefan Pagacik: Yeah.
Alan Kaufman: these board members are truly concerned about this and so that can tie to the reporting, the reporting can keep their board members comfortable and begin to show the regulator. If a regulator comes in I don't know how it works in Canada, but in the US
00:25:00
Stefan Pagacik: Just make sure you can back it up. You gotta back it up…
Rachel Baker:
Stefan Pagacik: because you're not going to fool these people. I mean, I was on a conference call with the SEC and There were about 300 chief executive officers, from different companies here in the US. And the overriding question was around scope three. And they said, How is the SEC going to treat scope Three emissions? And these are indirect emissions. These are emissions that come from your supply chain from anyone. You do business with they can encompass, things like business travel And that was the overriding question. Me. And the woman who is an assistant director at the SEC. Was very transparent. She said, we haven't decided that yet but know that we are thinking about it and we will come to some conclusion on it. So if you're not measuring it or if you're not making,
Stefan Pagacik: A good faith effort to measure it know that we will punish you for it. So Having a legal and compliance officer or a law firm that has experience in this area. Is going to be extremely important to you and getting out in front of it. Is a whole lot better than having to answer for it. After the fact,
Rachel Baker: And so what you retailers expect from avenger regarding sustainability reporting.
Alan Kaufman: Absolutely.
Alan Kaufman: I think. That depends on who the retailer is, but every retailer is going to have their own different way of looking at this.
Alan Kaufman: I think they're going to look for most importantly, transparency. when a vendor's contractor doesn't allow the retailer through their doors. That is the worst thing that can happen to transparency total outdoor open door policy and…
Stefan Pagacik: Yeah, I think it also depends somewhat on the size of the vendor.
Alan Kaufman: then they'll all have their own goals as to what you need to meet.
Alan Kaufman: But in what time period and…
Stefan Pagacik: so, if it's a mom and…
Stefan Pagacik: pop shop,…
Alan Kaufman: many of them will have teams that will help their vendors achieve those goals.
Stefan Pagacik: or if it's a smaller vendor, that's in a specialty area of cosmetics,…
Alan Kaufman: Because then they realize that the vendors may not have.
Stefan Pagacik: as opposed to a larger vendor or somebody who wants to private label,
Alan Kaufman: The expertise on their own teams.
Stefan Pagacik: I guess you really have to consider and think about What that means for the growth of your company, and what it means, going forward. I always err on the side of caution, it just, make sure that you've got all your eyes done and your t's crossed and just, pick the right partners. when you're doing something like this,
Rachel Baker: So benchmarks and standards for ESG. Reporting seem to be diverse and somewhat confusing. What would you recommend to companies seeking to align with one or more of these reporting guidelines?
Stefan Pagacik: Wow, pick one. And just, really get to Really understand what they're asking for.
Stefan Pagacik: They can be really confusing. I had the opportunity to utilize a saspy, which is Michael Bloomberg's. Version of FAZBE it stands for Sustainable Accounting. Standards Board. And SAS be breaks down their reporting by pharmaceutical automotive construction banking, I happen to look at the pharmaceutical vehicle and they had 20 companies that were reporting in using SASBY Navigator. Company. The company that Failed to answer about 15 of the questions. The company that was ranked 15th.
00:30:00
Stefan Pagacik: Failed to answer only seven of the question. No it was the other way around the company the company number three answered all but seven the company that ranked 15th answered all but 12 to 15 of the questions. But here's what got really interesting. SASBY had a waiting system for Some of the questions. So the company that finished third Answered questions even though they left key questions blank.
Stefan Pagacik: They were not penalized for those questions because they weren't waited as heavily as the company that finished 15th That didn't answer.
Alan Kaufman: He?
Stefan Pagacik: Four key questions and got penalized for it. I don't know if the company's new that or not, it became apparent to me as I dug into it. And I saw that, these gaps and reporting Some of it could have been intentional that the company just said, we don't have the data on this or we're not going to collect it. But they may or may not have been aware of the fact that Saspy was waiting. Those questions based on how they were going to rank the companies. So company number 15 could have been looking at it and said, Wait a minute, We answered the really tough questions. But you penalize us because we missed three or four questions that we couldn't get data for how the heck is that fair. So you really have to be careful and understand.
Stefan Pagacik: what you're responding to and part of the problem with Summit with all these frameworks is they ask the same question but they ask it in a different way, they're asking for the same data but they're asking it in a different way or they have different restrictions on how they weigh the question. Overall in terms of their scoring So, I would get to know each of the frameworks. I would align it with the data that you collect. That you're able to collect and authenticate. And just start there, don't worry about leaving things blank.
Stefan Pagacik: it's much better to answer the questions that you can answer and that you can fully justify the data. You can fully justify where it came from and build upon that rather than trying to just give glorified answers because I trust me, You will be. Unmasked, as it were.
Stefan Pagacik: Yeah.
Rachel Baker: What regulatory agencies, monitor your products and how do you work with them?
Alan Kaufman: Yeah, and that just goes back to the word I used before. Transparency. I think that's the most important thing you can do in any of these regulatory issues is be transparent,…
Stefan Pagacik: Yeah, yeah. Go ahead Alan.
Alan Kaufman: because once you're not transparent, it will come back.
Alan Kaufman: In my world, it was the Federal Trade Commission. In the FDA.
Alan Kaufman: basically, in terms of working with them, it was more of them working with The Federal Trade Commission in the United States, Often, let's industries monitor themselves as long as they do it. and so in several of the parts of the industry that I worked in over the years, we had our own groups that monitored and the Federal Trade Commission was happy. So they stayed away. The FDA was another story. And working with them, could be a little bit more challenging we had. production, This is a whole different category. Now we have production of ear piercing products that were made in the Dominican Republic. And they were sent into the United States and cassettes that included.
Alan Kaufman: Alcohol pads. it turned out that Someone in China had sent in. Huge quantities of alcohol, pads that had issues. So the FDA shut down everything to do with alcohol pads. And we had
Alan Kaufman: an issue where every shipment in from the Dominican Republic was held in quarantine by the FDA trying to work with them. directly was a little bit of a challenge trying to work through an FDA attorney that we thought would then be, maybe we chose the wrong one, but that made things worse, and at the end of the day, It was challenging enough that we stopped putting the alcohol pads in the product. Which was a major communication issued all of our customers because that's what they were expecting.
00:35:00
Alan Kaufman: And so sometimes it can be difficult you have to. But that's an example of a workaround. We just had a change the way we handled our product and our supply chain, have a go account when the FDA showed up at the door for an unannounced inspection.
Rachel Baker:
Rachel Baker: Can you talk to me about…
Alan Kaufman: That's where the transparency and…
Rachel Baker: how you use sustainability to position your brand and…
Alan Kaufman: just stopping everything and letting them take control because it was very clear.
Rachel Baker: build a competitive advantage?
Alan Kaufman: The first time we had that experience that when they come through the door, if you don't do that you're not gonna have a good experience.
Stefan Pagacik: I think
Stefan Pagacik: there are many companies. there's different ways to answer that question. Rachel, It can start with packaging, just in terms of the packaging that you use for the Sourcing of materials. Again, Fair wage rates fairly, sustainable labor practices. There are a number of different ways that you can position and it depends on the audience, really it's like, You have to know your customer and know what they want and what they care about. if they care about things like, are you sourcing or building your product in a factory which
Stefan Pagacik: Hires children and basically makes them work 12 hours a day with no bathroom breaks. That's not a good thing and maybe you can get away with it for a while because nobody's really checking up on you. But in this day and age, that's a hard thing to do because we have so many outlets for news and for people uncovering, bad corporate behavior that it's really risky to do that.
Stefan Pagacik: So I would say that from a branding and positioning think about your customer, think about what they care about. think about how much additionality and by additionality, I mean from a customer experience perspective from a use perspective, is your product better than somebody else's product. Are you giving the complete experience to your customer? Do they care about it? Will they pay for it?
Stefan Pagacik: And does that position you as a leader is it enough for you to gain brand leadership, by leaning on sustainability? Is this something that really is going to set you apart and enable you to reach a whole different segment of the marketplace that you couldn't reach beforehand? I think those are the questions you have to ask yourself when you're thinking about Brandon Positioning.
Rachel Baker: And do you need a crisis management plan which includes issues of sustainability? And what would that look like?
Alan Kaufman: without question, I think, one of the most important things for all companies is to have a crisis management plan and it should cover all areas that they could potentially have a crisis. The. Last company I worked for Did 24 acquisitions in the period of time that I was there. And we saw the difference between those who had crisis management plans and those who didn't have crisis management plans. In crises, whether it's in sustainability or not, they can happen on the dime. They can happen with one phone call from one major vendor or one phone call from one major customer. And the key is to know what to do next. And maybe you don't. Maybe the answer to that. Is not necessarily that, exactly what to do, but who to pick up the phone and call that will know what to do.
00:40:00
Alan Kaufman: so, I think Going back to what I had said before, were many companies in the industry, may not be large enough to support their own sustainability, experts to have a relationship with somebody…
Rachel Baker: Yeah.
Alan Kaufman: who is and if all of a sudden you have a crisis on sustainability,…
Rachel Baker: Last question.
Alan Kaufman: whether through the consumers,…
Alan Kaufman: whether through PR and article about your company, shows up in the newspaper. You have somebody that
Rachel Baker: Can you comment on the importance of reporting on sustainability activities,…
Rachel Baker: in supply chains?
Alan Kaufman: who to call. and I would encourage anybody that doesn't have a crisis management plan that that's critical.
Stefan Pagacik: Yeah, I think I mean, Alan you've talked about it at length and I think you've really articulated some key issues.
Alan Kaufman: I think. you want to have the reporting in a format. That's appropriate to your customer, when that's the retailer or the consumer and those are two different formats. the retailers, especially the large retailers, they're gonna have their experts,…
Stefan Pagacik: Yeah, I think for the supply chain.
Alan Kaufman: they're gonna want a specific format,…
Stefan Pagacik: And again, you need to coordinate collection data analysis.
Alan Kaufman: they're gonna want hard facts, numbers, etc, and how you got there. The consumers is more a marketing piece,…
Stefan Pagacik: And make sure that everybody in your supply chain,…
Alan Kaufman: the one I showed you from Viking.
Stefan Pagacik: understands how you're going to put this out there.
Alan Kaufman: And
Stefan Pagacik: As a report as Allen said to either a retailer, a consumer,…
Alan Kaufman: I think that's just The two different ways you want…
Stefan Pagacik: a regulatory body. You've got to consider all these different stakeholders.
Alan Kaufman: Look at that.
Stefan Pagacik: And so, the information has to be consistent because at any one time, Somebody could question somebody in your ecosystem and if they give it a different answer or if they are, give a different process than what you're touting on your website or through your 10K filings or whatever. That's going to land you in some trouble. that's going to create
Stefan Pagacik: That's gonna create a situation that you simply don't want to have to deal with. So it's really, really important to harmonize that whole process. It's time consuming. Yes, it is labor intensive. And initially it's not cost effective. But at the end of the day, And if you're playing the long game, it will pay off for you. You'll avoid a lot of what we've talked about here today, especially with legal and compliance
Stefan Pagacik: Yeah.
Rachel Baker: Thank you. Are there any other questions from our audience?
Alan Kaufman: And I would just bring that back to the statement that I shared before. Don't do anything with respect to sustainability of…
Rachel Baker: No. Okay, thank you. before we sign off,…
Alan Kaufman: what you put on paper that you can't back up that you would be concerned…
Rachel Baker: Stefan, you are running a pilot program.
Alan Kaufman: if it showed up on the front page in the newspaper.
Rachel Baker: Right now. Do you want to talk a little bit about that?
Stefan Pagacik: I'm sure I'm actually running a feasibility study which is the front end of a pilot program and I'm looking for companies that are interested in diving into sustainability, finding out what they're doing with their own sustainability efforts. specifically around carbon accounting. Because I'm really interested. I have a model that I think is going to help monetize and put a value. On these efforts. And so I'm going out and asking companies if they want to participate in the study and if anybody would like to learn more, they can do. So Rachel has the information and she can pass it along to you?
Rachel Baker: Yeah, we'll be sending a follow-up email. That will include information about Stefan's feasibility study, as well as the recording for today's information session. So Absolutely reach out to Stefan. Has he's a lovely guy and I think what he's doing is really cool. thank you so much for being here. Thank you, Alan and Stefan for doing this webinar with me.
Stefan Pagacik: Thank you.
Rachel Baker: I really appreciate it and have a lovely rest of your day. Bye.
00:45:00
Stefan Pagacik: Thanks Rachel.
Alan Kaufman: Thanks Rachel.
Allen Donaldson: Thanks.
Alan Kaufman: Thanks everybody.
Meeting ended after 00:45:32 👋
In the ever-evolving landscape of consumer preferences and corporate responsibility, the cosmetic industry finds itself at a crucial crossroads. The demand for sustainable products is not just a passing trend; it’s a fundamental shift in consumer behavior. A recent webinar featuring industry stalwarts, Alan Kaufman and Stefan Pagacik, shed light on why sustainability matters, the challenges faced by cosmetic companies, and the meticulous process of validating third-party suppliers.
Alan Kaufman, drawing from his extensive experience in the jewelry industry, emphasized a critical point – 75% of shoppers, across generations, care about sustainability. This dispels the myth that only the younger demographic is eco-conscious. Kaufman’s insight underscores a simple truth: cosmetic companies need to align their practices with customer values to thrive in the market.
Stefan Pagacik highlighted the interconnectedness of businesses with communities. Every decision, policy, or action taken by a company reverberates through the social and environmental fabric of the communities it operates in. Pagacik emphasized that understanding this interconnectedness is pivotal; businesses need to recognize the impact they have, whether it’s on local economies, the environment, or social well-being.
Both speakers stressed the importance of scrutinizing the supply chain. Alan Kaufman pointed out that reducing energy and water usage are critical areas for improvement. Stefan Pagacik delved deeper, emphasizing the significance of locally sourced materials and scrutinizing the carbon footprint, including scope three emissions. The speakers collectively highlighted that transparency in the supply chain is non-negotiable for sustainable practices.
Validating third-party suppliers emerged as a significant challenge. Both Kaufman and Pagacik agreed on the necessity of having experts in the field or hiring third-party specialists. The speakers emphasized the importance of asking tough questions, even if it means potentially losing a supplier. Authenticity and verification of data are paramount, even amidst challenges of greenwashing, where companies exaggerate their sustainability efforts.
The conversation circled back to customer trust. Both speakers underscored that companies need to ensure that their sustainability goals are not just met but verified throughout the supply chain. Retailers, too, are increasingly holding their vendors accountable, demanding sustainability adherence. Sustainability isn’t just a buzzword; it’s becoming a non-negotiable criterion for success in the cosmetics industry.
In conclusion, the webinar painted a vivid picture of the cosmetic industry's evolving landscape. It’s not merely about products anymore; it’s about responsible practices, ethical sourcing, and genuine commitment to environmental and social welfare. The path to sustainable cosmetics might be challenging, but as Kaufman and Pagacik highlighted, it’s a journey worth undertaking – not just for businesses but for the planet and its people.
In the heart of the rapidly evolving cosmetics industry, sustainability has emerged as a guiding star, steering companies towards ethical, eco-conscious, and socially responsible practices. In a recent enlightening webinar featuring industry veterans Alan Kaufman and Stefan Pagacik, the spotlight was firmly placed on the pivotal role of sustainability in shaping the future of cosmetics.
Aligning with Consumer Values: The Sustainability Imperative
Kaufman, drawing from his extensive experience, emphasized a staggering truth - 75% of consumers prioritize sustainability. This statistic underlines a universal shift in consumer values, highlighting the need for businesses to realign their strategies. Sustainability isn't just a buzzword; it's a fundamental aspect of consumer consciousness that brands can't afford to overlook.
Crucial Questions and Ethical Considerations
Pagacik delved into the nitty-gritty of sustainability, shedding light on the vital questions businesses must ask their supply chain partners. From fair labor practices and wage rates to meticulous carbon footprint assessments, the depth of scrutiny in the pursuit of sustainability knows no bounds. Moreover, he highlighted the ethical aspect, drawing attention to issues like animal cruelty, urging companies to ponder the real cost of compromised ethics for short-term gains.
Transparency as the Cornerstone
Both speakers underscored the paramount importance of transparency in sustainable practices. Authenticity in the supply chain isn’t just desirable; it's non-negotiable. Companies must be diligent in their reporting, ensuring consistency across various stakeholders, be it retailers, consumers, or regulatory bodies. This consistency serves as a safeguard against reputational risks that can arise from discrepancies in sustainability claims.
Navigating the Regulatory Landscape
The conversation also touched on the complex regulatory environment. With different countries and regions having diverse standards, companies face the challenge of harmonizing their sustainability efforts. While the regulatory landscape might seem overwhelming, the consensus was clear - transparency and consistency are key.
From Crisis Management to Brand Positioning: The Sustainability Advantage
In the realm of crisis management, both Kaufman and Pagacik stressed the need for meticulous planning. Crisis situations can emerge swiftly, and having a robust crisis management plan, especially concerning sustainability issues, can be a company's saving grace. Furthermore, they highlighted the transformative power of sustainability in branding. By understanding their customers and aligning their products with eco-conscious values, companies can not only weather crises but also build a loyal customer base willing to invest in sustainable products.
Conclusion: Forging a Sustainable Future
The webinar painted a compelling picture of the future of cosmetics - one where sustainability isn't just a choice but a necessity. As businesses navigate the complexities of supply chains, regulatory frameworks, and ethical considerations, the path forward is clear. Embrace sustainability with unwavering authenticity, align with consumer values, and craft a future where beauty isn't just skin deep but extends to the very ethos of the products we use. The cosmetics industry stands on the brink of a sustainable revolution, and it's time for businesses to lead the way.
How to make sure technical staff won’t hold site hostage
First I want to address the point that any contractor, or employee you have working for you, you should trust. It’s unprofessional to hold a site hostage when you already paid them to make it for you. If you don’t trust someone don’t work with them period. That being said, development is a lot of work, and non-technical people often underestimate how much work simple changes can be. If a technical person says something will cost a lot of money, you should trust them enough that they aren't trying to rip you off. Often people with technical backgrounds have a tough time expressing to other people what needs to be done, and why certain things will be more expensive than others. Try to build a mutual understanding.
You should ask your staff questions about why something will cost so much and what could make it cheaper? Try to get a better understanding of what needs to be done. You can also ask this person how they can give you more access and oversight into what they are doing. Express your concern by asking them something non acuistory like: “What if you get sick. What should I do?”. Any consultant should be willing to walk you though how you can easily transfer the project to someone else.
If you are in the position where you don’t trust some one you have hired here is what I suggest you do:
Github is a version control system. Think of it like a word document that keeps track of all the changes you make but it’s for code. Programmers use this so that they can easily see the changes they made in the code and quickly go back to older versions if there are bugs. Any programmer should be saving their code on a github (or github like).
If you have a git hub account, you have control over where your developers upload their code. This way you always have access to what they have built and can give it to their replacement. Just make sure you get an account with private repositories because you want to make sure that only the people you authorize will have access to the code. If you are unsure you can always ask the developer you are working with to set this up for you. The developer and you should have separate accounts and you should be the account owner, so you can block access to whomever you want.
Good programmers create code that is readable to other programmers. Part of that involves comments and thinking about code in simple terms. As someone without a technical background it can be hard to tell if the code someone is producing is good. Good programmers will do two things: make their code readable to other developers and use existing code rather then build it themselves. In the github account you can see if they added comments to the code as an easy test to see if they care about making their code readable.
Overall I don’t think you should be afraid of technical service providers taking advantage of you. Most won’t, but they maybe a bit awkward and inarticulate. I’m sure if you just have an honest conversation with them they can help find a suitable solution where you both feel comfortable.
GPT (Generative pre-trained transformer) is an artificial intelligence technology that generates text and images from a prompt. It creates content that is unique and tailored to user input. It has a lot of potential applications, but I would be cautious where you apply the technology. GPT: Cosmetic Companies should think critically when applying the tech.
In our previous article (https://tejo.ca/blog/limitations-gpt-cosmetics-industry) we outlined the major limitations of GPT. The core points centered around how you cannot own the copyright for anything generated by AI as the laws stand now. There are also issues around it’s ability to be factually accurate and sound generic. The value proposition of GPTs don’t seem as good if you can’t own the copy write of what is generated and what is generated is not super valuable. Ultimately the value of content for your brand is going to be on its ability to get consumers attention and the inability of competitors to copy it. With GPT you have neither as of writing this article.
This means that use cases for this technology are more limited than what the marketing team and investors of this technology would like you to believe. Gpt replacing most creative work is theoretically possible, but the technology would need to become substantially better and the legal framework of copyright ownership would need to change dramatically.
You could use a gpt image generator to create images that you could quickly test on small audiences on social media. If there are images that have especially good click through rates I would suggest you pay an artist to re-create a better version of the image for widespread ads. This is because a competitor can use a generated image and you would have no legal recourse because AI images have no copywrite.
If you need to write a 100 tailored emails cold outreaching to prospective clients GPT could be the tool to do it. You could write a program that takes in the contacts information, google's their recent activity and then generates an email. Just be sure to proofread all of the e-mails.
One of the best applications for this technology is customer service related. You could train a chatbot to take care of most customer service related tasks. This of course would require oversight and proper training, but I can see a future where most call center and customer support jobs are automated. Rather than a large number of employees doing stressful repetitive tasks, you would have a smaller number of people who constantly monitor and update this automated engine. Currently there are risks associated with automated these tasks, especially if customers have unique requests that the machine cannot interpret even worse, an algorithm could be trained on data with prejudices and exhibit those to customers.
I would recommend using an external service to manage any chat automation, unless your company is willing to invest millions of dollars.
There are a few pitfalls of using GPT for your content exclusively
The value of your content is only as valuable and unique as it is to your consumers. If you want your consumers' attention you need to be able to create content that is unique and interesting. GPT seems to not be very good at either currently.
Google, and social media platforms all have algorithms to decide what content they should promote and what they should demote. They have automatic systems for detecting bots, and those that are trying to “cheat” their way to the top. As a result, if they detect that you are blindly publishing articles a bot wrote, these systems may detect that you are engaging in this behavior and demote all of your content. There is a bit of an arms race where algorithms are built to detect bots, and bots are built to circumvent the algorithms.
Any content you produce by GPT needs to be proofread by someone who has a deep understanding of the topic being written about. Concepts may not be expressed properly, or important points may be missing. All statistics and quotes need to be checked to be true.
Perhaps in the future Instead of using GPT to write an entire article for you, instead you could research a topic, and create an outline with statistics and quotes. GPT could generate an article that way. Currently you can use GPT to flesh out paragraphs which is somewhat useful.
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GPT, or Generative Pre-trained Transformer, is a type of artificial intelligence technology that has been gaining traction in the cosmetics industry. GPT is a powerful tool that can be used to create content, generate product descriptions, and even develop product ideas. However, while GPT can be a powerful tool, it is important for cosmetic companies to understand the potential risks and benefits of using this technology.
Cosmetic companies should use GPT to develop content and product ideas. GPT can be used to generate product descriptions and create content that is tailored to the target audience. GPT can also be used to develop product ideas that are more innovative and creative than traditional methods. This can help cosmetic companies stand out from the competition and create products that are more attractive to customers.
On the other hand, cosmetic companies should avoid using GPT for tasks that require human judgement. GPT is still in its early stages and is not yet capable of making decisions that require complex reasoning or understanding of human behavior. For example, GPT may not be able to accurately assess the quality of a product or determine whether a product is suitable for a particular audience. Therefore, it is important for cosmetic companies to use GPT only for tasks that do not require human judgement.
Overall, GPT can be a powerful tool for cosmetic companies, but it is important to understand the potential risks and benefits of using this technology. Companies should use GPT for tasks that require content creation and product ideas, but should avoid using it for tasks that require human judgement. By understanding the capabilities and limitations of GPT, cosmetic companies can use this technology to their advantage.
GPT: Cosmetics Industry. GPT or Generative Pre-trained Transformer has received alot of hype in the news recently. So we decided to discuss some of the pitfalls of using gpt. We will then talk about various applications and how you can use the technology and still protect yourself from potential problems.
Works done only by humans are copyright protectable, and only humans can hold copyright. This means that as it stands anything created by gpt algorithms are not copyright protected. There are also several lawsuits against various ai companies looking to establish precedent for what AI can and cannot train on. Courts will be deciding if AI companies can use other people’s copyrighted works to train their algorithms with out permission. It’s currently unclear if that is fair use. It is also unclear if your company could be legally liable for illegally generated images.
For a detailed analysis I recommend watching this video by Legal Eagle
https://www.youtube.com/watch?v=G08hY8dSrUY
The problem with any computer program, not just AI is that it will do exactly what you tell it to do. It won’t be able to apply good judgment to the task, unless you include those constraints explicitly. For example if you tell an AI to “get as much social media traction as possible” It may discover posting inflammatory things or writing about holocaust denial gets alot of attention. It did it’s job, it gained traction on social media. This is why having the appropriate oversight, and regulation is crucial when using these tools.
Currently gpt will spout out false information when it is compiling its articles. This may change with technological advancement, but as it stands anything that is generated should be fact checked. It should be about something you know well enough where you can correct any obvious mistakes.
Any AI is just as biased as the data it trains on.
Beyond not having any cultural insight into appropriate behavior and the propensity to spew false information, AI is limited by the data it’s trained on. It will carry over any biases or prejudices the original authors had.
Moreover gpt is limited by the data it is given. It can only create things that are based on the data it’s trained on. At best what can be created currently is a fairly average derivation of what already exists. The AI doesn’t seem to be bale to grasp certain concepts, rather it generates text and images based on what has be previously created using those key terms.
Overall GPT is an interesting technology with a lot of potential applications. The main draw back is the current copyright and legal issues at play for these generated works. Other draw backs like poor judgment, false information, and uniqueness may improve dramatically over the next 5 -10 years.
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- Copy-write ownership
- potential legal issues for gpt companies with respect to copy-write
- pitfalls with good judgment
-false information
-generic sounding content
The use of Generative Pre-trained Transformer (GPT) technology is becoming increasingly popular for its ability to generate large amounts of content quickly and accurately. However, there are several limitations to GPT that should be considered before using it.
First, GPT can only generate content that is not protected by copyright. This means that if you are using GPT to generate content that is based on existing copyrighted material, you may be liable for copyright infringement. Additionally, GPT companies may face potential legal issues with respect to copyright if they are found to be using copyrighted material without permission.
Second, GPT can be prone to making mistakes in judgment, especially when it comes to generating content that is nuanced or opinionated. For example, GPT may not be able to accurately capture the tone and sentiment of a particular piece of content, resulting in false information or generic sounding content.
Finally, GPT can be limited in its ability to generate original content. While GPT can be used to generate large amounts of content quickly, it is not always able to generate content that is truly unique or creative.
In conclusion, GPT technology has many advantages, but it also has several limitations that should be taken into consideration before using it. By understanding the potential pitfalls of GPT, users can better ensure that the content they generate is accurate and original.
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Angela wanted to use the new virtual try on service, so she could see what different lip shades look like on her skin. But when she opened it up a message appeared saying “no face detected”. Her friend who’s white was able to see the different products virtually applied on her skin. But Angela, a black woman, could not. This is why companies need to Vet Technology for Diversity.
When facial recognition systems were being initially created, the grad students used pictures of classmates, predominantly white and asian men. Unsurprisingly this technology works especially well for those groups. New technology tends to be tested by those who are most easily available to the creator, leaving room for potential shortcomings with other populations.
In Canada 3.5% of the population is black. Of that most black people have lighter skin tones. That means an algorithm can be 96.5% accurate in Canada and not work at all for especially dark-skinned people. This means that if a technology company simply takes a random sample of a population, their technology will be biased towards the demographics of the population.
This becomes an open-ended technical question. What proportion of the dataset should be of black people? Do you create separate databases for each race and measure performance for each? How should you collect data in such a way that includes everyone? Exactly how well does a product need to address these questions before it’s ready to bring to market? These questions have no definitive answer or protocol. In an business ecosystem that embraces the expression “go fast and break things,” some companies may not be considering inclusive algorithms at all.
On the one hand, inclusivity has costs. It’s expensive to compile vast datasets that are inclusive of all people. It’s easier and cheaper to test products solely with people in your network. This can reduce time to market, technical complexity and ultimately the cost to build a product.
On balance, though, a lack of inclusivity can ultimately be costlier. A company that adopts uninclusive technologies risks branding itself as being more interested in padding its wallet then making the world a better place. Phrased another way: inclusivity is an essential part of goodwill, and goodwill is an essential part of marketability.
The technology partners you choose to work with reflects back on your brand. This is especially true for any customer-facing systems. To vet your technology partners you should:
Is diversity something this company appears to care about? On the company’s LinkedIn pages, websites or advertisements do show images with diverse populations? Do they have any blogs discussing algorithmic inclusivity or diversity?
Any company should be aware of how their algorithms work for people of all races. They should be able to clearly express how they are addressing biased algorithms. Do they have a process they can explain in simple terms? They should be able to tell you where some problems may be and how they are solving them.
Get a diverse group of peers to try the system. See if experience differs in any way. What would ideal behavior look like? If anything doesn’t work, provide feedback to the company so they have the opportunity to improve it.
It can be hard to make sure a product works for everyone. There are 8 billion people in the world, and unless you test with everyone, you cannot be sure it works for everyone. Your voice and expectations can help guarantee technology partners are taking the issue of algorithmic inclusivity seriously.
Angela wanted to use the new virtual try on service, so she could see what different lip shades look like on her skin. But when she opened it up a message appeared saying “no face detected”. Her friend who’s white was able to see the different products virtually applied on her skin. But Angela, a black woman, could not. This is why companies need to Vet Technology for Diversity.
