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Shiseido Acquires MatchCo. and Its Shade Matching Technology

A digital app turns an iPhone into a diagnostic tool for detecting the right skin shade.

Shiseido Americas Corp. has acquired MatchCo., a California start-up that has developed digital technology designed to help women find the right shade of makeup foundation with precise accuracy, an age-old problem that afflicts 94 percent of consumers, according to the company. Shiseido intends to “leverage” the MatchCo. technology across Shiseido’s other brands, like the foundation-heavy Bare Minerals, and to other makeup and skin-care product categories, a move that might give the company an upper hand in winning over consumers seeking greater product customization and personalization, two prevalent trends.

Marc Rey, chief executive officer of Shiseido’s American subsidiary, described the business possibilities as “humongous.” He declined to say how much sales volume the start-up is doing, neither did he divulge the purchase price. Considering that MatchCo. has been in business a short time, a number of industry sources estimate the annual volume is less that $5 million.

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MatchCo. was founded in 2013 by Dave Gross and Andy Howell, who are remaining with the company. The operation became fully functional in 2015 with the creation of a telephone app that drives the system.

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The app was designed to be used with an Apple iPhone. Using LED technology and an analytical algorithm, the phone is turned into a diagnostic tool that a woman can use to scan three areas on her face to analyze the skin conditions.

After the resulting findings are sent to the company, along with a credit card number, a bottle of foundation arrives in the mail within 24 to 48 hours. A 1-oz. bottle now is priced at $49, but Rey pointed out that pricing will change as the company explores other applications. “It’s going to be a bit of premium, but not crazy. It will be affordable,” he said.

Rey chose to focus on the larger implications.

Not only does the system tap into the customization and personalization trends, two of the biggest consumer movements today, but women tend to stick to a particular brand since foundation can be difficult to match.

“It is a way to get more consumer intimacy and create more consumer satisfaction,” Rey said.

If true, that would be a path to the real payoff, the acquisition of new Shiseido customers “in the millions,” Rey said.

MatchCo. will remain based in California, Rey said, with its engineering squad in Palo Alto and its marketing and operations in Santa Monica. The evolution of the business will take place in an incubator unit set up in Shiseido’s Global Makeup Center of Excellence, based in New York and headed by Jill Scalamandre.

“We look forward to revolutionizing beauty together,” said Andy Howell, who described the system as “AI for beauty.”

Scalamandre said the system has the capacity, with just foundation, to give women some confidence in the selection process. Customers can use it to find the right shade or match shades. Or in the future, when it is applied to other makeup products, like eye shadow, the system can be used to create shades and play with color.

Shiseido expects to increase the focus of customization of cosmetics products, through the ramp-up process. Other goals are to advance the digital technologies aimed at skin measurement and analysis. Not only does Shiseido intend to roll out and evolve the technologies to serve its other brands, but also be applicable to other makeup and skin-care products. Another ambition is to expand direct marketing and improve consumer marketing through insights gleaned from contact with consumers.

Rey suggested that different marketing and selling models could be adopted. The model in use involves transactions shipped to the phone. But business could also be conducted through stores and even TV shopping channels.

In addition to the participation of the Global Makeup Center of Excellence, but other centers focusing on skin care, digital and fragrance also plan to collaborate.

“Creating innovations is an area of special strategic focus for Shiseido Group, and we look forward to offering more unique value to consumers around the world,” said Masahiko Uotani, ceo of the Tokyo-based parent company. “This will now be made possible through accelerated innovation in rapidly evolving digital tools and customized products.”