Coty Inc. is looking to bring in digital inspiration from the outside.
The beauty giant is launching a Digital Accelerator start-up program where companies can pitch their ideas to Coty in exchange for cash and the possibility of implementing their technologies in Coty-owned brands. The group owns Cover Girl, Wella, Philosophy and a slew of other lines.
Inside Coty, the idea is not just to gain added technology but to spread the idea of acting like a start-up, according to Jason Forbes, Coty’s chief digital and media officer. “By fostering these relationships with an ecosystem of start-ups we’re seeing much higher levels of cross pollination, really helping our Coty teams to think and act more like a start-up,” Forbes said.
Coty is not the only beauty company to work with start-ups — L’Oréal has a technology incubator, and Unilever invests in start-ups through Unilever Ventures.
What Coty is really trying to do, according to Forbes, is foster a community. “Two start-ups, three start-ups, you’re actually kind of creating this ecosystem of capability that becomes really exciting in constructing new ways to go to market,” Forbes said.
“We’ve seen increasing traction over the past 18, 24 months working with a growing number of start-ups,” he added, citing a recent partnership that enabled Coty to bring new technology to market for Cover Girl, which allows users to try on looks online and then check out through the Wal-Mart web site, all without downloading an app.
The first round of start-ups should submit entries by March 12 for the company’s quarterly Digital Accelerator Summit taking place March 27 and 28. From the start-ups that submit entries, Coty intends to select a subset of eight that will present in person to a digital accelerator community across Coty of more than 400 people.
For the first round of the program, Coty is accepting pitches related to artificial intelligence. Interested parties need to provide a description of what differentiates their AI business, how that technology can benefit a specific Coty brand, and demonstrate how the innovation would work in the beauty market.
“Success looks like those turning into a set of pilots or trials with specific brands to bring AI technologies to market,” Forbes said. Entrants can also win money — between $10,000 and $50,000 — that will be awarded depending on how well the start-ups aligns with the brand and the potential expansion opportunity of the technology among multiple Coty brands.
After that phase, “there’s a whole set of options,” Forbes said when asked if Coty would consider acquiring the companies that develop the technology. “Ultimately it will depend on the stage of growth that start-up is at, how they are viewing their growth opportunity not just in beauty but in CPG or across the marketplace. But for sure, if there is a start-up that we see that we like, then finding the right type of partnership or relationship that allows them to grow and us to partner with them to drive growth across our brands is very much how we approach the whole spectrum of options.
“We’ve seen impressive levels of e-commerce sales growth in the past year, so really, this is all about bringing agility to Coty across a defined, pretty specific set of digital capabilities — for example, artificial intelligence, augmented reality and 3-D printing,” said Forbes, who was the chief executive officer of digital agency Beamly when Coty acquired it more than two years ago.