Beauty & The Data Beast: Consumer Obsession Meets AI

[00:00:00] Tessa Burg: Hello, and welcome to another episode of Leader Generation, brought to you by Mod Op. I’m your host, Tessa Burg. And today I’m excited to welcome Irina Kulikova. She’s a global business leader at Estée Lauder, and we are excited to jump into a few topics that are really gonna, are trendy now, but are gonna be a focus for marketers and business leaders moving forward.

[00:00:22] Tessa Burg: Uh, including: what does it mean to be a customer-centric business, and what will be the state of beauty/state of retail in general as we enter 2026 in an ever-evolving era of AI and massive technological, um, development. So Irina, thank you so much for joining us today. We’re excited to have you.

[00:00:41] Irina Kulikova: Hi Tessa, and uh, I’m very happy to join, uh, this broadcast and happy to, uh, to share my experience.

[00:00:49] Tessa Burg: So you have had quite a journey, uh, very impressive background, and you have been a marketing and executive leader for a long time, over two decades, which is just incredible. Tell us a little bit about your background and your journey to Estée Lauder.

[00:01:05] Irina Kulikova: Absolutely. I actually joined Estée Lauder five years ago now this December, that’s exactly five years.

[00:01:11] Irina Kulikova: And, um, prior to that, um, I spent most of my career in, um, in strategic consulting. And I worked on, on very different projects with the strategic focus transformation, but also go-to-market marketing, different types of things and across various industries, because I started as more as a generalist working on various types of, of projects and industries. But then in the last years I’ve been focusing primarily on, uh, luxury, fashion, beauty, uh, retail consumer products to a certain extent. And I worked across, uh, different markets including Russia, Middle East, uh, UK and, and some others. And few years ago when that was exactly during the COVID time, I, um, I left consulting to, uh, to join the industry.

[00:02:00] Irina Kulikova: I started my career many, many years ago. Back then, right after the university with L’Oreal, that was my first job and I started in trade marketing and somehow to, like many years in consulting, I rejoined the beauty industry, which I’m very much passionate about because it has a lot of, um, interesting elements, which I appreciate a lot.

[00:02:20] Irina Kulikova: It’s, it’s the industry which is in between, for me, a consumer goods and uh, and a fashion luxury type of industries because it has these dynamics of the consumer goods type of industry. But at the same time, it has all like the interesting elements of, of the luxury fashion, you know, like with the beautiful models, with all these like amazing products, amazing advertising campaigns, et cetera.

[00:02:47] Tessa Burg: Yeah.

[00:02:47] Irina Kulikova: And, um, yeah, and maybe to, just to complete, uh, my background in Estée Lauder. Currently I work on multiple topics. So I, um, I work on strategy for, um, for the company, specifically for Europe, uh, UK and I, and emerging markets as well as transformation, but also I’m focusing on consumer insights, market intelligence, pricing, and various different types of projects, um, whether it’s entering the new channel or entering new market, bringing the brand to a specific market, et cetera.

[00:03:21] Tessa Burg: I, I think it’s funny when you said that beauty has the best of retail and then all sort of the fun stuff with models and great campaigns and you know, there’s a brand.

[00:03:30] Tessa Burg: That’s actually what my kids think I do. Every time you see a commercial, they’re like, oh mom, were you a part of that? I’m like, no, but it is why I love working in marketing and advertising. Even though I’m on the data and tech side. I love that the output of really understanding the customer, how they operate their behaviors does eventually lead to an amazing and fun commercial or creative campaign.

[00:03:54] Tessa Burg: I’m just not personally developing them. Wish I was. So let’s dive into that a little bit more about, you know, the data, the insights. We’re seeing a lot of companies put out statements that this year they’re gonna be customer-centric or customer-obsessed. In your experience at Estée Lauder, really companies, even before then, ’cause you’ve always been working in strategy and transformation, what does that mean and what are some of the elements of successful customer-obsessed or customer-centric companies?

[00:04:24] Irina Kulikova: I think from my previous experience, the big element of this consumer or customer obsession is, is that when you start every single meeting or every single project, you actually start with your consumer. You think first about your consumer, not about the financials, because the financials will come and will follow as long as you bring all the right elements for your consumer.

[00:04:47] Irina Kulikova: And, um, this consumer-first mindset, you know, like. Every single time that that’s actually what defines the consumer-centric company. And then of course, when you have this consumer-centric mindset, you build all the right infrastructure and all the right elements, which helps you to know more about your consumer.

[00:05:07] Irina Kulikova: Right. And, and you mentioned a lot on about the, um, basically the, the consumer studies, the consumer research, you know, all this like analytics, et cetera. I mean, I live with it as well. Like that’s part of my job because. When I look at the consumer insights part of, of my role, that’s exactly what my team and I were, are working on, and we are bringing this to life.

[00:05:29] Irina Kulikova: Even those markets where we don’t have a lot of consumer data, but we really need to understand what consumer, what consumer is, is doing, how they’re feeling about our brands, where they’re shopping. What, um, what kind of like channels they’re using to learn about, about the brand, et cetera. So there’s a lot of different types of indicators, which actually help us to understand what’s the right way to approach this consumer.

[00:05:53] Irina Kulikova: And, uh, on the top of this, like with a lot of AI tools at the moment, you can also look into, into more details, analyze a lot of data around also like the social listening type of things, the trends. Um, analytics, et cetera. So there’s a lot of information that you can bring on the table from the different parts of, um.

[00:06:12] Irina Kulikova: Of the organization as well, including the consumer care, you know, like what our consumers are complaining about, you know, because that’s also part of, uh, of the study and the journey of understanding, like how, how do you build this consumer experience where consumers don’t have to complain, you know, then they’re happy with, uh, with what they’re receiving.

[00:06:28] Irina Kulikova: They’re happy with the brands, they’re happy with the services, et cetera. So, so you, you’re totally right there. There, there’s a lot of elements, right, in terms of consumer insights, consumer study, consumer analytics will help you to get this information about the consumer, and once you get this information, the next step is to build all your processes.

[00:06:48] Irina Kulikova: With, uh, consumer experience that you want to reach in, in mind, you know, even your, like your front, front office part, it’s quite obvious, right? Of course, you need to, to think about how consumer will, will see your store, your brand, how your beauty advisors will approach the consumer, what they will say and, you know, but there’s also the back office part, which you also need to build with the intention to, uh, to have the right processes for the consumer, for the consumer journey, and for the consumer experience.

[00:07:19] Tessa Burg: I think a lot of companies would say that their vision and mission is to be consumer-first and, and say things and give lip service to, well, we we’re only in business to serve our customers, so of course we’re consumer-first. But I would challenge listeners that if you start a campaign based on when a new product’s gonna be ready to launch and when you are going to go into the market.

[00:07:45] Tessa Burg: Or based on a goal that you have to reach or the company has to reach in order to meet stakeholder expectations, that when we start with that, here’s what we’re we need to accomplish internally, or here’s our timelines on when R&D is gonna be finished, or new products gonna be finished. That that takes away from being truly customer-centric.

[00:08:10] Tessa Burg: And what you are proposing is that. You really look at what is to differentiate on the experience that you’re delivering. How have you seen that pattern before where people say they’re customer-centric, but really they’re like, oh my God, we’re gonna launch on this day and I wanna blast out an email to everyone, or I wanna like tell everybody about this because I just finished this work.

[00:08:33] Tessa Burg: And, and how can people make that change while still being able to measure that the focus on customer experience does generate revenue and growth for the business?

[00:08:45] Irina Kulikova: Well, I’ll tell you something. I mean, you don’t start with the product in general. There’s a consumer before the product, right?

[00:08:53] Irina Kulikova: Everything that you built as a, as a new product, ideally you actually, you have the consumer which actually have the need for this product, right? And, and you’re looking into what consumer needs, what the consumer trends. If you look at the brands right now, which are very successful in, uh, in beauty industry.

[00:09:10] Irina Kulikova: They are very much monitoring the trends and they understand what the consumers want, and they bring their products quickly to market in line with these trends in line with this consumer expectation. So this is basically this reverse cycle. First, you see what your consumers are looking for. You understand, you know, what, what the needs, what the, especially like the, the, the younger generations of Gen Z.

[00:09:34] Irina Kulikova: You think of what it means in terms of your new product development. You bring this product to the market, but meanwhile, you also, you also need to understand what are the channels of consumer use to, to learn about the product? What are the right influencers? Uh, when is the right moment for this product?

[00:09:48] Irina Kulikova: Because probably that’s not the right moment. Again, like you’ve been building this product, but there might be, you know, tons of other products coming on the market at the same time. And you know, you might even have difficulties to differentiate it. So you also have to look into. What’s going on in the market where the consumers are still passionate about this product?

[00:10:04] Irina Kulikova: Or maybe like you, you also need to, uh, to think on how to position it in a different way. Because sometimes you may have amazing product that you built with some ingredients, et cetera. And one specific ingredient is trending at the moment, but not the other one, you know? And then how you position Nick, how you, you, you bring your product to the market.

[00:10:24] Irina Kulikova: It’s also like knowing what the consumer wants at this point. What is it like, what is important for, for consumer, which kind of benefits, which kind of ingredients, et cetera. But, but it’s, in any case, like as you said, you need to, you need to plan everything with your consumer-first mindset. Then you don’t have a question like whether it’s just like, oh, okay, I’ll bring something which is like super cool at the market in this moment, et cetera, et cetera.

[00:10:52] Irina Kulikova: ’cause it’s very difficult to bring something on the market where you don’t have the right demand from the consumer and, and, and you know, and that’s probably not something that consumers need at this point. You might spend a lot of money, but you might not get the exactly the results that you want.

[00:11:08] Tessa Burg: Yeah.

[00:11:08] Tessa Burg: And I like that you said you have to see what the consumers are doing. I mean, there’s so many different ways to see behaviors and patterns, but sometimes it even means like getting out into the world, really talking to them, looking at channels online and offline, and understanding the drive behind the behavior.

[00:11:30] Tessa Burg: And that can be like a massive unlock and is a very human activity. You know, we can use AI to gather all the data to help expedite analysis, to pull out suggestions, but I think true customer-centric businesses and customer-centric leaders are actually also there in partnership with consumers and continuously asking why are they having this blocker?

[00:11:58] Tessa Burg: I, I always think of it as if, if people go into your store, and especially in beauty, there’s aisles and aisles of options. And let’s say, you know, your conversion rate is 10%. Then getting curious about what happened, the other 90%, you know, like, and that’s, yeah. You know, that’s where you could start to pair that in-house experience.

[00:12:22] Tessa Burg: Is it the merchandising and the shelving? Is it not reading the moment and emphasizing the right ingredients, emphasizing the right positioning. But I love that part of the exercise of really trying to understand the 90% of no, instead of what the trap that I see a lot of businesses fall into, which is just trying to think about how to get from that 10% to 11% to 13% and just increase conversion.

[00:12:52] Irina Kulikova: Yeah, I, I totally agree with you and, and for me, I always, when I, I thought about consumer in the past also in some of the projects that I did in the past, you know, there’s always like this magic of the big data, right? And you have a lot of, uh, different types of statistics, um, data, et cetera, which you can analyze and you can derive a certain trends, et cetera, which is great.

[00:13:12] Irina Kulikova: But, um, the real magic sometimes hap happen with what is called like small data. You know, like the observations that you can make in the store, for example. Like how, how your consumer, for instance, move in the store, what they look at, what they like, what they don’t like, and from the simple conversations that, that you might have with the consumers, you know, with a certain group, like focus groups, et cetera.

[00:13:33] Irina Kulikova: This is more kind of like a small type of data, right? Because you have like a smaller group of people with whom you’re having this conversation and, and you’re making the observations. Or as you rightly said, like, you know, you, you may have like 10% of yes, but then there’s 90% of no. Why? You know, that also gives you a certain answers in terms of like what, what consumers do not like.

[00:13:53] Irina Kulikova: But um, but it’s true that we sometimes behind, um, all like this massive data analytics, et cetera. We, uh, forget about very simple things, which you can only observe when you’re in the store, for instance. And, um, whether than I, I was in, uh, in L’Oreal is my first job. There was, uh, I, I, I found it is a very good practice in the company back then that, you know, whomever gonna work and marketing was supposed to spend first six months going to the stores and being a sales representative and basically observing how the store works from the operation perspective, but also having an opportunity to see the consumers, et cetera.

[00:14:30] Irina Kulikova: And, um. In the same way in, um, in, in the current company as well. I see this opportunity for people to go and work in the store for a few, for a few days or even for one day. You’re actually getting so much information from this also from some of the previous clients of, of Bain when I worked in consulting.

[00:14:49] Irina Kulikova: Um, I, I’ve, I’ve observed it. All the time for the retailers, for instance, then the CEO of the company or the general manager of the company would spend time during the weekend to go to the store and, you know, and look what’s going on in the store and taking these data into account as opposed to just all like the financial, you know, the cool tables, et cetera that you see on the slides.

[00:15:12] Irina Kulikova: Another thing which I really like in, um, uh, for instance, Net Promoter Score, right? The, the NPS, which was also like introduced like many, many years ago by, by Bain and which is used by the companies quite a lot in order to understand and, and have this, uh, clarity in terms of how consumer feel about their specific product, about a specific store.

[00:15:33] Irina Kulikova: There is always an element of, um, when. Leadership team and some of the companies also use the opportunity to call their consumers directly. And I observed it again in the past when the CO or like the general manager would just take the phone and call one of the consumers who is actually detractor or another way who is a promoter, just to understand why they like the brand of the company or why they don’t like it, and what has to be changed.

[00:15:59] Tessa Burg: Mm-hmm.

[00:15:59] Irina Kulikova: So all these elements together, that’s actually, that creates, um, much better understanding of, of your consumer in general.

[00:16:08] Tessa Burg: So how do you take that deep understanding of the consumer and the insights and translate it into a truly unique and ownable brand experience?

[00:16:21] Irina Kulikova: Well, there are different ways of, uh, leveraging consumer insights, right?

[00:16:25] Irina Kulikova: Because also you need it for, for different reasons. One, for instance, when you have your, um, your campaign like advertising campaign, you have like the great materials that you develop, like the potential models selection or the potential visuals. You actually can, uh, use the consumer panel or like also the smaller focus group, depending again on what you’re trying to clarify to, uh, to have this, uh, this view from the consumers, whether they associate themselves with the specific assets or like for, for the campaign of the specific model of the specific visuals, et cetera.

[00:16:59] Irina Kulikova: That actually gives you pretty good. Um. Understanding, you know, and, and you, in the same way, you can also do like the online testing, like when you like leveraging some of the assets to understand how the consumers react on this. So that’s, that’s one of the ways of doing things. And the other thing is obviously when you’re building the, the, when you’re developing the new products.

[00:17:19] Irina Kulikova: You really need to have this consumer input in terms of what are the, let’s say the, the shades of, of, uh, of the lipstick that will be popular in the next, uh, you know, months. And what are the trends in terms of, um, um, because sometimes it’s, it’s the colors, but it’s also the texture. Like, whether it’s like a stick or whether it’s, uh, it’s like the blush, which is more kind of, uh.

[00:17:43] Irina Kulikova: I say powder type of thing. So you, um, you try to understand which kind of products you, you want to develop, which will be popular with the consumer by taking into account the analysis of the trends. And, and that’s quite often like you do, uh, using also AI as I mentioned, and, and, and looking through the social media.

[00:18:02] Irina Kulikova: With, uh, the most trending like TikTok videos, what people starting to talk about such and et cetera. So trying to really to see trends in the future. Then of course, I mean like if you have your Net Promoter Score, um, regarding your stores and, and you clearly see. What consumers like or they don’t like.

[00:18:20] Irina Kulikova: You can action quickly in your stores. Sometimes it might be a systematic problem for all your stores, or sometimes it might be like specific to one, uh, store and you can like, you can fix it. I mean, uh, from my, uh, previous experience, you know, it’s, it was one of my projects in the past, uh, when we, uh, we did a net promoter score for, um, for.

[00:18:41] Irina Kulikova: For big, um, uh, hypermarket player. Um, we, we discovered that, for instance, there was not enough space. Like consumers were complaining constantly. There’s not enough space in the parking or the, the toilets were like closed or something like this. This is something which is very specific to this store and you can solve it potentially quickly.

[00:18:59] Irina Kulikova: Right? But that. Dramatically increased potentially your consumer’s satisfaction with the experience in the store. Or the other thing like the, uh, consumers were not finding, um, specific products because there were no proper indication where they can find it. So they were spending a lot of time going through the store trying to find a specific, uh, category.

[00:19:22] Irina Kulikova: Which could have been solved pretty easily if you just put the right indicators there. So these type of signals, like, you know, you take them into account and you can actually solve, uh, the whole problem of the, of the consumer journey in the store. So very different ways of, uh, using then of course, I mean for media, right?

[00:19:39] Irina Kulikova: Like you decide on which media channels you gonna, um. Leverage for your advertising campaign to get the max return on investment. But that’s also pretty much based on the consumer data, because you do, um, you have your consumer data, you, the, the media agency normally do all this, uh, classification, putting the, uh, channels, which consumers are there, which profile, et cetera, et cetera.

[00:20:02] Irina Kulikova: And then you decide on where you invest your money in order to. To bring, uh, this advertising to, to your consumer that you want to target. I mean, many different ways of like consumer data is, is basically everywhere, you know, across the whole organization. You can leverage consumer data to, uh, to build the processes around it in the right way and to get the most of efficient.

[00:20:25] Tessa Burg: Yeah, I think it’s. Interesting. You know, we’ve seen AI have such a big impact on businesses, but for the most part, what’s really taking up the headlines is using AI to cut costs. Uh, there’s been staff reductions and people have said it is because of AI or because of automation. But in everything you are saying, it’s really the benefit of AI is to better understand the consumer and be able to react to those signals and changes and trends faster and to expedite resolving points of tension in their journey.

[00:21:02] Tessa Burg: Uh, what other big areas have you seen AI impact? The beauty industry either this year or what do you see it impacting next year as we head into 2026?

[00:21:16] Irina Kulikova: I think, um, what you mentioned is, is totally right, right? You use AI of course to improve efficiency and also to cut cost. That’s not, uh, but the thing is, it’s not the only use, right?

[00:21:29] Irina Kulikova: And it’s probably not the primarily use because. As a, as a company you’re normally interested in, in growing your top line and everything that helps you to, to bring your net, your, your retail sales and your net sales to the higher level, um, it’s, it’s very important. But at the same time, of course, you’re also managing your net operation profit, and this is where you need to cut costs.

[00:21:48] Irina Kulikova: So like you can apply AI in both direction. And as I said, that there is a front office and there is a back office, right? So if you take marketing. From the marketing perspective even you can use AI in both directions, right? So. Using AI to better understand the consumer and the massive amount of data help you basically to better target your consumer, to create the right products from, um, even like you can, you can use AI to, uh, to develop the, the formulations for your products, knowing which ingredients are most efficient for the specific consumer needs, et cetera and such, and going through all the library of, of the ingredients using the AI models to pick the right things and, and do the right formulations. But then, um, as, as, as we mentioned, you can also select the right channels. You can basically bring the efficiency of your money to the different level with, with AI. And at the same time, for instance, when you do your creative assets, you can potentially dramatically reduce the costs.

[00:22:50] Irina Kulikova: Because just imagine in the past you used to, uh, let’s say produce your creative assets, making like the, the, you know, the photos in different locations with the different models like with, uh, with the different product setups. Now using AI you can actually from one shoot. You can build multiple options that you can use for the different, uh, online retailers or like, uh, you know, you can, you can change the model, for instance, but keep the setup, or you can, you can change the setup and, and, and keep the model or the same from the product perspective.

[00:23:23] Irina Kulikova: So that’s both the cost saving, because it’s, it’s cheaper compared to what it used to be before. At the same time, it’s also the opportunity to grow your sales with producing like, um, a bigger number of assets. Then, uh, of course everything that is related, for instance, to, uh, quality control. Also in the supply chain, you can also use the AI to, uh, to do better quality control of the products.

[00:23:46] Irina Kulikova: So, uh, that’s a different way of how you can, um, cut costs as well. But at the same time, you also ensure that you have less of your products coming back to you. And the consumer satisfaction is, is much higher potentially because you, you, you don’t have faulty products, uh, once you, once you receive them. So.

[00:24:05] Irina Kulikova: There’s, there really AI is, is everywhere across the organization. Starting from, from the marketing piece, from content creation piece, uh, supply chain. It’s, uh, it’s also in your financial analytics and strategy. You know, like framing certain problems that you can leverage. Definitely AI to analyze the massive amount of information and data to, to come up with, uh future, like future framework for your strategy, for instance.

[00:24:34] Irina Kulikova: So many, many ways of, uh, of applying, uh, AI. But the other thing, I think what is really important to take into account is not only how we as a company use AI, but it’s also how consumer use AI. Because this is where you need to, um, build this knowledge and understanding.

[00:24:53] Irina Kulikova: And there is a lot of consumers which use AI today. Um, in the store, for example, instead of by the dermatologist advice or the beauty advisor advice because they come, they have their ChatGPT or um, you know, whatever it is, like Perplexity, whatever they use with them. And, um, they just look at, at, uh, at the product on the shelf and they ask like whether this product will actually benefit their skin or like, whether that’s the right product for them, because they have a specific, um, things, um, you know, like allergy or whatever it is.

[00:25:26] Irina Kulikova: So they even check the ingredients, like, which ingredients are great, which are not, you know, so, so all these things, and I think more than, I mean, at least like the statistic that I’ve seen that I, I’ve seen that more than 50% of Gen Z population actually using today. ChatGPT and different types of similar, uh, models to, uh, when they’re doing the, the beauty shopping.

[00:25:48] Irina Kulikova: And this is where the companies need also to be smart in a way on how, um, how they bring, uh, the right recommendations to the consumer and, and their products are not lost, even if these are the most amazing products. And they could have been super helpful for the consumer needs. Um, in terms of the benefits for the skin and the problem solving for the skin.

[00:26:11] Tessa Burg: Yeah, that was actually gonna be my next question was, you know, what is the difference between how generations use AI and are there any new emerging channels because AI exists, like for example. The way that I use social media and the social media channels I have are dramatically different than my teenage daughter.

[00:26:33] Tessa Burg: You know, and like even the way that we look at and use ChatGPT is different. And what makes from the technical side, when I think about those differences. You really have to understand the why behind it’s different and the context in which they’re using it in order to optimize your content to show up consistently and accurately across channels, because a lot of people don’t know that if you prompt chats or LLMs differently, you’re going to get different answers and there is a lot of inaccuracy.

[00:27:08] Tessa Burg: So I guess I have a two part question. Are there new channels emerging as people start to set preferences and do those change or are there differences by generation? And then how can businesses make sure they’re taking that into account when they’re looking to optimize their content and brand experience to still deliver in a consistent manner?

[00:27:31] Irina Kulikova: To answer your first questions on the new channels. Um, yes, in general, the new channels are emerging, but this is not related necessarily to AI only. It’s more about the generational preference in a way people shop or some of the recent, I mean, for instance. One of the channels which been emerging in beauty and has been growing quite significantly, particularly in Europe, is is Pharma Channel recently, and the reason for that was also the situation with COVID that pharmas were open for people to buy and they started to source from their also their beauty products.

[00:28:03] Irina Kulikova: And somehow also we’ve. This element of people looking for the efficiency and for the solutions for their problem, their skincare products. Pharma channel became one of the, of the channels where out of the sudden a lot of people started to buy more and more beauty products. But that’s not exactly AI related.

[00:28:21] Irina Kulikova: It’s more related in terms of this specific trends and changes which are happening in the way people shop and what they’re looking for. But then. From the younger generation perspective, like more than 90% of the younger generation today, like Gen Z, they’re using TikTok. And this is why the TikTok is emerging, one of the shopping channel as well, which was not in, in, in the past like, but currently TikTok shop is one of the channels that people really do like, they, they really acquire and they, they purchase, uh, things, et cetera.

[00:28:53] Irina Kulikova: So that’s obviously, um. That’s obviously another example. Then online channel in general, I think the whole like Amazon topic, that Amazon is not a new, new thing, but there is more and more beauty purchases, which are actually also happening in Amazon and and other online channel. Because prior to, again, like prior to COVID beauty.

[00:29:16] Irina Kulikova: Predominantly for, for many countries it was predominantly brick and mortar channel. Like, you know, we, the people were buying, uh, the beauty products in the stores because they wanted to try it. They wanted to make sure, like, for instance, especially your makeup products, that you, it like, it looks nice on you.

[00:29:33] Irina Kulikova: Like it, it, it works well for your skin, but also with. Artificial intelligence, like with, um, with COVID, with all like all these different types of trends, the online channel became like much more popular. It’s still probably like around 25 to, well, 20, 25% of, uh, of overall beauty, uh, purchases. In some markets, obviously, like, especially in APAC, it’s bigger.

[00:29:59] Irina Kulikova: But it’s, it’s the channel which also allows to use a lot of AI being incorporated in, in the purchasing process from the recommendation perspective, chat bots, et cetera, et cetera. So this channel is also benefiting from AI and the Gen Z, which is much. More savvy in terms of the way they use AI and the way they prompt and the way they create, uh, the requests.

[00:30:22] Irina Kulikova: ’cause it’s not only like, you know, what’s, uh, I don’t know what’s the best, uh, product for the dry skin, et cetera. They almost like creating with, uh, with the help of AI, like their beauty routine, like bringing the data about themselves and asking like very specific questions. And then the more they ask, the more they work with, uh, with ChatGPT essentially, I, I was quite, um.

[00:30:43] Irina Kulikova: Quite inspired, like seeing also how people build their, um, diets on, on, like with ChatGPT providing like a lot of information about themselves, the ChatGPT can give you like the menu for the next few days of what you actually need to eat. It’s the same way for, um, for instance, for your skin and there’s like quite a lot of devices now as well and, and um, applications which allows you to analyze your skin.

[00:31:08] Irina Kulikova: And provide your recommendation in terms of like, what is the best products for you to use today or tomorrow, or like the day after tomorrow, depending on your skin condition. So, um. As you rightly said, that’s really important for the companies to, uh, be on the top of, uh, what is happening like with, uh, with ChatGPT, Perplexity, like a Google.

[00:31:30] Irina Kulikova: Uh, well, uh, any, any like AI related things, uh, at the moment because, um, if you don’t understand the mechanics of how. The, the people get the advice on specific, uh, beauty products. You might be just somewhere there and you will never be on the top of the list when the certain questions are asked. And my understanding, and I’ve, I’ve read some materials.

[00:31:56] Irina Kulikova: I’m, I’m, obviously, I’m not, I’m not a specialist in that specifically, but I, I was learning this from more from the strategic perspective. And my understanding specifically on AI is that. There’s a lot of information which is used from the different types of forums, um, um, magazines, articles, you know, uh, different types of advice advisors provided, like on different social forums, but it’s by no means normally the the brand pages, right?

[00:32:24] Irina Kulikova: So whatever wonderful, uh, information you put on your branded page, it might not be exactly the one that AI will use. To provide specific recommendations. So you have to become specialist in optimizing the way AI is actually getting information about your product and, and be on in those sources of information, which are being leveraged by ChatGPT, for example.

[00:32:49] Tessa Burg: Yeah, that, I mean, that is a real challenge when, you know, websites like Reddit have a ton of domain value and they are cited. Even when you’re using like a deep, an AI deep research tool and you know, those are just, those are just people talking, but it’s also that opportunity for brands to elevate the stories they put out there to attract the right influencers organically, not just the paid influencers.

[00:33:19] Tessa Burg: Um. One of the things that I always fall for and I, I see influencers, like real influencers use it, and then plus just my peer group influencer are tools like you were saying, to analyze your face, analyze your skin. That is because it’s immediately adding value to my purchase decision. It’s building confidence.

[00:33:40] Tessa Burg: I have the opportunity to test it before I buy. I can click through and read different reviews on the branded website and other websites. So I agree. It’s so important to know how to optimize your content, but it, and it’s also just so important to, again, be customer-centric and say, what kind of tools, content, experiences can we put out there for everyone to touch feel so that when they talk about our product, it’s coming from.

[00:34:11] Tessa Burg: Some valid information, valid and real experiences and not, and hopefully increasing the accuracy of conversation overall.

[00:34:21] Irina Kulikova: No, exactly. And, and the only thing is like, as you mentioned earlier, there is obviously limitations with AI. Depending on how you ask the question, you might get a specific answer.

[00:34:29] Irina Kulikova: Right. That’s why it’s also, um, it’s not fully controllable, even if you are taking care of like the right content being placed in the right. Um, areas like, which are leveraged like websites, which are leveraged by, uh, by the AI tools. The question is also like how the user gonna ask the question, and then the answer is gonna be very much related to the prompt that you are using.

[00:34:54] Irina Kulikova: And then asking the same thing in the different way might bring you the different answers. Which is also like this variability is a bit of a, an interesting thing because that’s not exactly the same as it used to be when you were just using like the Google search, right? Like you ask the, the question and you, and, and basically it brings you on the top based on the specific, uh, algorithms, like, you know, specific, uh, articles or like websites, et cetera, et cetera.

[00:35:21] Irina Kulikova: And then the user is deciding on what makes sense versus what doesn’t make sense in the AI. Depending on the prompt that you formulated, you’re actually receiving like a very much curated type of thing. And, and you know, and, and it’s a bit of a, still a black box on how this whole thing is, is managed internally.

[00:35:43] Tessa Burg: So we’re almost coming up on time, but I wanted to slip in one more question. We’ve talked a lot about the changing audience and generations and their behaviors and how they access and research information and where they buy. We definitely talked a lot about the impact of AI on those generations, on the buying habits, and as a tool to better understand your customers, use those insights to inform products, logistics, operations, and everything across your business.

[00:36:10] Tessa Burg: Are there any other big areas of trends or change that you see coming in 2026 that will impact retail online and or the beauty industry overall?

[00:36:24] Irina Kulikova: I think it’s less on the technology side, but it’s more on the, on the behavioral side because obviously, um, what we also need to take into account is like the macroeconomic conditions and you know, what’s happening overall like with consumer confidence.

[00:36:38] Irina Kulikova: And in the previous years, with the high inflation, high price increases, you can, you can hear it everywhere that many of the brands, you know, push the prices too high to the point that consumers. Um, do not believe anymore that the products are actually rightly priced at this point. And so it seems to be like that the companies push the prices too hard, too, too high.

[00:37:01] Irina Kulikova: And, and at the same time, with all these AI tools and the opportunities to research as such, a consumers are definitely. More equipped, more than ever equipped also to recognize, uh, the real like value. And, and they look at this value from very specific perspective as well. Like what are the benefits that they’re getting from this product and whether that’s the ingredients that they want to, uh, to apply in their skin or et cetera to use.

[00:37:27] Irina Kulikova: So the combination of the two, I think it puts quite some pressure, you know, on, on, on the brands as well. We’ll be putting pressure on the brands in the future because you cannot. Any more like, you know, push prices, you really need to be smart in the way you, um, you, you basically, uh, price your products even if, if you have like the significant cost of business increases, et cetera, et cetera, the consumer will not buy just this anymore.

[00:37:53] Irina Kulikova: There has to be a very good combination. The understanding of. The value for money and the benefits the consumers get. So I think that’s, that will be really critical in, um, in the next year. And, and then of course, using the artificial intelligence for the benefit of what you mentioned, like is cutting cost.

[00:38:11] Irina Kulikova: For me it’s more like bringing efficiency, you know, and, and, and, and helping, uh, the consumer also to feel like this efficiency. So it’s not like only in the products, but it’s it’s also in, uh, sorry, in the profits, but it’s also in, in, um. And the prices that consumers see in the markets and the quality of the products that they have in, uh, better, uh, targeting for their specific needs and, and really being like the more consumer-centered companies.

[00:38:36] Irina Kulikova: So that, that would be like the whole combination of these things. It’s, it will be like really critical in the next year. And then from the trends perspective, you know, there are many things which are happening and will continue to happen also from there. Um, geographical perspective, you know, with the Korean beauty brands, like really being on the rise and, and, and, you know, getting popular.

[00:38:57] Irina Kulikova: And, and the reality is like some of the elements that you see there in terms of like research and development and you know, that that’s pretty amazing. But also the Chinese brands, which are also raising quite a lot and, and also have a lot of interest. Interesting elements. So there’s a lot of challenges for the beauty companies.

[00:39:16] Irina Kulikova: There’s a lot of competition and they will continue to be this way and there will be also continuous blurry line in between different types of channels. There’s no such a thing as for, for prestige beauty companies, there’s no such a thing as a prestige channels anymore. It’s like everything is pretty much blurred consumer shop everywhere.

[00:39:35] Irina Kulikova: They have all the information in their hands, like with, with ChatGPT, et cetera, et cetera. So it’s quite, it’s quite a sophisticated environment to, to manage and to navigate.

[00:39:48] Tessa Burg: Well, this has been a very fun, and I would say insightfully insightful packed conversation packed with insights. So I hope that all the listeners can take away.

[00:39:59] Tessa Burg: Some great action steps for 2026 and how to use data and insights and AI to get closer to the consumer, to show up in ways that benefit and value that consumer across channels, everywhere and anywhere. And then also as they look to build out product roadmaps and improve efficiency internally, but also back to the benefit of the consumer.

[00:40:21] Tessa Burg: I know I actually, when you said that, that’s. We haven’t talked about that yet, that consumer expectation that prices should be lower. But we are seeing that not just in retail but across industries because not only do they not trust the price, ’cause they just feel like it’s only gone up and up and up.

[00:40:43] Tessa Burg: But also they’re like, well if you’re cutting all this costs, where, where’s the benefit to me? Like why? Like you just put out this press release that you cut all this costs, you automate everything out. But why am I paying more? So I think that’s something every professional industry is gonna have to think about.

[00:41:00] Tessa Burg: Even though, as we know on the inside, there’s a lot of investment going into reimagining brand experience and reimagining what you can do for customers. So prioritization of how you deliver value and where value, efficiency, or the consumers, uh, benefit from efficiencies is gonna be really interesting to see play out next year.

[00:41:23] Irina Kulikova: Absolutely, and, and I totally agree with you in terms of investments, because artificial intelligence, it’s still, it doesn’t come at for free, right?

[00:41:30] Tessa Burg: Right.

[00:41:30] Irina Kulikova: There is a call to this and there’s also like a lot of conversations at the moment that also like this whole AI element will require significant electricity, like power generation, et cetera. So there’s a lot of things that, and, and a lot of things that the companies will have to think about in the future. But in the short term, you, you’re totally, you’re totally right. And I think the consumers will have this feeling that there has to be a certain fairness in terms of like, you know, we companies been pricing.

[00:41:58] Irina Kulikova: Too much in the past, and you can clearly see this, I hear this about luxury industry, you know, then people just saying like, all these, uh, videos about like Louis Vuitton bags or MS bags being like, you know, produced somewhere else at, at very tiny, like cost comparing to the price that they’ve been sold.

[00:42:16] Irina Kulikova: So it, it’s quite obvious that, uh, consumers think about this. There’s a lot of, uh. Dupes in the markets as well, because people just don’t see the reason why should I buy their original product if they can get something very much similar.

[00:42:30] Tessa Burg: Mm-hmm.

[00:42:30] Irina Kulikova: Much lower price.

[00:42:32] Tessa Burg: Yep.

[00:42:32] Irina Kulikova: So pricing is a big topic, that’s for sure.

[00:42:35] Irina Kulikova: For the next, uh, for the next year. That, that would be one.

[00:42:39] Tessa Burg: Yes. Yeah. We just got back from New York City. And we missed our subway stop. And when we, the stop we got off of in Soho was the area where all the knockoffs are and my, it’s the first time my daughter had seen like this phenomenon. I mean, it was, it’s Christmas in New York, so it was packed wall to wall.

[00:42:59] Tessa Burg: And I have never seen like that many people in a one place at a time. But it was what really struck me. Was that it was an older crowd, a more mature crowd. And then when we made it through, which felt like forever ’cause the, when we got to the branded stores, it was a younger crowd and my daughter herself really gravitates towards specific brands and at different price points.

[00:43:32] Tessa Burg: But you see, when people really value the brand, they are prioritizing the value they get out of the experience of being seen, of wearing that brand, of being associated to those values. Uh, where she was like, why would anyone buy the knockoff? Because then it’s like, to her, you know, to her she’s like, that’s not the real experience.

[00:43:55] Tessa Burg: Yeah. It’s just gonna like fall apart and be short term. Yeah, and it was like, it was very, it was really interesting to see that play out and she was like, why don’t the brands walk down the street and shut this down? I was like, I’m like, sometimes it’s just a totally different audience, but to your point, like.

[00:44:14] Tessa Burg: Look at all the people in these branded stores. It is a different experience. There’s lighting’s different. We’re not cold, we’re not on a street. We’re able to try things on. We can pull up their app that they gave us and see what it looks like on me with my measurements. To your point, mixing that digital and physical.

[00:44:32] Tessa Burg: But that’s gonna be so, you know, being able to weigh price. Making sure that experience continues to deliver while you’re paying that price is going to, is definitely gonna be the challenge.

[00:44:44] Irina Kulikova: And there is, and there is exactly the question. So where do you invest the money? Do you invest the money into not increasing the price for your consumer, for instance, and, and kind of keep it.

[00:44:53] Irina Kulikova: And try to, to give a bit of benefits to your consumer, or you actually invest your money into bringing more experience in the stores to bring the consumer and to explain the consumer well, you know what is actually, it’s not only a product you’re paying for, you’re actually paying for this whole experience.

[00:45:07] Irina Kulikova: And of course, for the younger generation, the experience is very important and critical because. They, they really all about like this retailtainment, retail experience, et cetera. So this is where I also start seeing like all the brands opening, like the cafes, like serving some, you know, crazy things in their stores and, and you know, imagining different types of events there.

[00:45:27] Irina Kulikova: But that’s the thing because that’s all investment, you know, and then the question is like, where do you put your money? So what’s gonna bring you the, the best result in the future? And this is, and and the answer is also like, you, you need to know your consumer. Yes. So that. That’s the own answer.

[00:45:42] Tessa Burg: It, it is absolutely true, and I would say the brands who are investing in those cafe experiences, the one extreme example I saw was this Jelly Cat Cafe, and this is all my daughter wanted to do, and I don’t understand why a teenager wants a stuffed animal that’s $60 I beyond me, but.

[00:46:03] Tessa Burg: So I waited for the times to be released and I’m usually very good if there is something like, you gotta sign up, you gotta be on it. And we’re only allowing 50 people in, I think 95%, maybe a couple of times that I can remember. I get in, I had six different devices going to get into that darn Jelly Cat Cafe and make my reservation and I did not get in.

[00:46:26] Tessa Burg: And it shows you where you’re at in queue, and I picked different times. Every single one of my times I was behind 200 in line.

[00:46:38] Irina Kulikova: Oh wow.

[00:46:39] Tessa Burg: So that means at the moment when they announced that they were opening up at one store in New York City, just one location, there was over 200 people waiting in each line just to make the reservation.

[00:46:54] Tessa Burg: But it’s. We walked by and I was, you know, like I’m not in this generation. I’m like, I do not understand what is happening. But man, this brand is doing a phenomenal job of creating a highly sought after physical experience that clearly justifies the price of the product.

[00:47:15] Irina Kulikova: Yeah, no, absolutely.

[00:47:16] Tessa Burg: Yeah, so it’ll be exciting to see if more of those experiences come to life.

[00:47:21] Tessa Burg: I actually just appreciated that. We were out and shopping so much and having so many different branded experiences. I mean, it’s Christmas in New York, so there are branded experiences everywhere, but then she was off the phone, off games. Like I also think there’s benefits to, experiences, and it’s a real opportunity for companies moving forward.

[00:47:45] Irina Kulikova: No, absolutely. Absolutely. Totally agree with you.

[00:47:47] Tessa Burg: Well, thank you so much for joining us, and if people want to reach out to you directly, where can they find you?

[00:47:54] Irina Kulikova: Uh, well, I’m in LinkedIn.

[00:47:57] Tessa Burg: Yes. And you, they could see your impressive background. And for listeners, uh, Irina’s name is spelled I-R-I-R-I-N-A, and last name is K-U-L-I-K-O-V-A.

[00:48:12] Tessa Burg: And you can see that spelling on our website at modop.com. modop.com or search Leader Generation on Apple Podcast, Spotify, or wherever you listen to podcasts, to hear this episode and all of the other Leader generation episodes. So Irina, thank you again.

[00:48:30] Irina Kulikova: Thank you.

[00:48:31] Tessa Burg: Have a wonderful end of the year and best of luck as we head into 2026.

[00:48:36] Irina Kulikova: Thank you. Same to you.