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As consumers continue to demand more interactive ways for brands to connect and to provide them with an enjoyable customer journey, purchasing has now become much less about the transaction and more about the experience. Shopping has become a journey and brands have been keen to let their consumers experience the latest advantages technology can bring to the beauty industry through augmented reality (AR) and artificial intelligence (AI). These recent innovations are set to transform the international retail industry. America and China have taken the lead, but the rest of the world has been quick to follow as brands have begun to realise the limitless potential for AR in the beauty industry.
Major Chinese brand, Alibaba, used technology similar to a Pokémon Go style game (Catch the Cat) as part of their 11:11 Global Shopping Festival which took place in late 2017, to actively engage their audience and to drive foot traffic into their physical stores. According to a report by CreditCards.com, retailers still consistently report that transactions which take place in stores rather than online are higher than average due to the customers being more likely to be tempted by impulse buys. Therefore, as long as brands are providing new or niche services which allow the customer to interact with the products, physical stores will always be an asset regardless of how far technology enhances the online shopping experience.
In the fall of 2017 Amazon also got inventive with its AR offerings and launched a feature on their iOS shopping app which allowed their customers and potential customers to visualise how products would look within their home. The feature was built using Apple’s ARKit and is set to dramatically reduce the amount of returned products.
But while technology is aiding some brands, it can have a dramatically adverse effect on others, which means many brands are having to find inventive ways to cope with 21st century problems. In 2017 Heidi O’Neill, president of Nike’s direct-to-consumer business, announced details of her SNKRS AR app which was designed to help prevent bots from buying all the limited-edition products online. A consumer wishing to buy certain products was required install the app and to point their phone at a pre-specified Nike image either online or on a poster to view and complete the purchase.
Aside from imagery, voice tech is also on the rise across every branch of retail, especially within the beauty and personal care industry. Recent studies Location World and Global Web Index show that 40% of adults now use voice search once per day and 25% of 16-24 year olds use voice search on mobile. This is a growing global trend. So how does it affect brands and businesses? With an increased reliance on innovative technology to provide information, the chances are that the information provided is likely to be biased, and the intuitive assistance could have major influence the consumer’s choice of retailer. Research and advisory firm, Gartner, predict that 75% of US households will have smart speaker devices such as Google Home and Amazon Echo by 2020. Not unsurprisingly many brands such as Walmart have made a bid to partner with Google to enable consumers to voice shop using Google Assistant.
However, Amazon have taken innovation to a whole new level by launching the Echo Look; a take on the room-based devices. The voice assistant now comes with a screen with a depth-sensing camera, LED lighting and computer-vision based background blur. Using the Style Check feature, the Echo Look operates as the user’s very own stylist, allowing each customer’s outfits to be evaluated by a combination of complex algorithms based on the advice from fashion specialists and stylists. The feature also allows Amazon to build up an inventory of the customer’s preferred wardrobe.
Technology Trends Will Set The Direction For The Cosmetic Industry Worldwide
While it may seem unlikely that an industry-leading chain of cosmetic stores would have been at the forefront of a digital transformation, Sephora has leveraged the power of digital and used it to become the number one specialty retailer across the globe. First founded in 1970 and acquired by LVMH in 1997, Sephora operates over 2,300 stores in 33 countries. Since the launch of their U.S. website in 1999, they haven’t looked back; constantly moving expanding their digital footprint and amongst the first to make their shopping experience available on mobile devices.
Whilst digital innovation has always been integrated into their DNA, Sephora’s obsession with technology stems from their desire to provide the best customer service possible. Sephora understands that customers’ lives are becoming ever more reliant on digital, which is why they are keen to meet their clients in their space to offer tools and experiences which meet their needs.
Sephora are constantly working alongside partners to create services their customers are not even aware that they want yet. Their AR app features allow customers to try on makeup virtually; matching their skin tone to the perfect foundation, while in stores, they are helping customers to sample perfumes via a touchscreen and scented air. The Sephora Virtual Artist allows customers to try on thousands of beauty products; however it’s most innovative AR feature allows users to experience digital beauty tutorials, using the customer’s own face, to learn how to achieve certain looks – a major step forward from watching YouTube tutorials. While customers may be overwhelmed at first, they soon discover that finding their perfect or favourite shade is easier and quicker than ever. Sephora’s AR app demonstrates the need for visualization technology within beauty retail.
The app was released in 2016 and since its launch, every four months in partnership with Modiface, Sephora expands the app to more platforms or adds new features to keep their customers’ attention. The app tracks facial features accurately; measuring in real time where the lips and eyes are, and then once those elements of the face are detected, the lipstick or eyeshadow can be applied and matched to one of the 20,000 Sephora products. It also includes independent product ratings and reviews, making it even easier for customers to decide before making a purchase. The Android version even allows customers to try out different hairstyles.
Since the launch the app has been visited over 8.5 million times and over 200 million shades have been tried. Many clients visit the app several times a month to keep up to date on content and to stay connected via personalised messaging.
#Regram @RyanBPotter … TAG YOUR MAKEUP BUDDY!! ???????? Pride month is almost over but I wanted to do one last colorful look this month in partnership with @Sephora! This look started with just colorful lips and then it progressed into some color on the eyes lol! It’s kinda messy but super cute at the same time?? Are we feelin it? PRODUCTS USED: #GiorgioArmani Luminous Silk Foundation in 5.75 #LauraMercier Flawless Fusion Concealer in 2N #NARS Soft Velvet Powder #MAKEUPFOREVER Artist Pencils in 806 300 206 902 702 712 #MAKEUPFOREVER Pro Bronze Fusion #MILKMAKEUP Face Gloss for the Eyes #Lancome Monsieur Big Mascara #TooFaced Blush in Baby Love #VioletVoss Rainbow Palette
But Sephora doesn’t launch digital applications just because they’re edgy and new: each innovation is built to help their customers’ experience become more fun and convenient while helping to engage and educate. For example, Sephora discovered that one of the biggest concerns for online consumers was finding the right tone for foundation. In response, Sephora partnered with Pantone to create a shade-matching technology, ‘Color IQ’, which uses a handheld device, available in stores, that accurately reads skin tones. Customers are then given a Color IQ number to help them choose the most appropriate matching lipstick and foundations.
The company also launched Beauty TIP (teach, inspire, play) workshops in their stores across North America which encourages customers to learn via group classes. The workshops utilise Visual Artist technology on integrated iPad stations and large digital screens which showcase user-generated content.
By far the most impressive technological advancement made by Sephora is their Fragrance IQ experience. Shopping for a new fragrance can be daunting, but now, after filling out an online scent profile, clients can test scents using an air delivery system, Instascent. With Sephora’s new technology clients can sample several fragrances without ever having to try them on.
The brand’s innovative approach appears to be paying off. After their experimentation with front-end interaction with their clients they reported an 11% growth in sales in the first quarter of 2017 alone. The brand shows that simple applications can significantly enhance the experience for the clients as well as adding value to the service. It is not merely a case of pretty promotional front-end bravado. Instead the data gained through the customers’ use of apps helps the company to shape an even more satisfactory customer experience. Given that the US prestige beauty industry stood at around $17.7 million in 2017, a 6% increase on 2016 (NPD Group), Sephora seems set to continue to grow as the beauty industry becomes more personalised in the coming years.
Although many non-technical companies are becoming increasingly digitally aware, most are advancing slowly in comparison to Sephora, which has been dubbed one of the most advanced retailers in the beauty industry. Their diversified approach allows them to thrive in areas where other rival companies are struggling as the company is constantly striving to innovate alongside latest consumer trends and technological advancements.
Perhaps one of the main reasons for Sephora’s success is their ability to create dialogues with customers, not just monologues, whether that be online, in store or via a mobile app. Time after time, they not only meet their customers’ expectations, but they exceed them.
The brand boasts that in five or ten years from now, a client walking into a Sephora store will find each aspect of their experience to be fully personalised. The brand envisages that products will be recommended to the consumer based on skin tone, face shape, sales history and pre-set preferences. The benefits will be felt by both shoppers and retailers as brands see increases in sales conversions and as customers find that products are more relevant and suited to their needs.
Behind Sephora’s Innovation lab is a Think-Tank programme which employs next generation leaders and nurtures their ideas. Innovation is fostered in the company as a whole and efforts are made to hear each and every perspective for a dynamic view of how to better serve their customers. It recognises that customers have unique pain points in their buyer’s journey, which the retailers must endeavour to resolve. Other companies, such as Starbucks have also tapped into this; their payment app allows customers to order ahead to reduce the amount of time they spend waiting in line. Focusing on key problems is the best way to overcome challenges in retail instead of attempting to resolve multiple problems at once. Once the key problems have been identified, it is helpful to plug unto technology and societal trends to understand how innovation could align with current trends.
While a streamlined online experience may once have been the expected standard, now, with many brands embracing the interactive benefits of AR and AI, those not looking ahead may find themselves victims of technological advancements. Consumers now hold a high level of expectation for the buying process to be intuitive throughout; linking their online and offline presences to create a seamless customer experience.
A cleverly designed AR or AI campaign may help to nurture leads that may not have developed if it weren’t for the novelty or niche elements. Yet AI and AR have to be more than just a novelty factor: customers need to feel the benefit of technology by giving them the ability to purchase products quickly and easily, whilst having fun in the process.