Inside the Beauty Store of the Future

Advances in technology fueled the e-commerce acceleration as retailers around the world were forced to close their doors because of the coronavirus pandemic. And now, as retail slowly reopens, digital is expected to be a key component for reigniting sales in the brick-and-mortar channel, too.

Say you want to find new eye shadow in store these days. You’re wearing a mask and likely don’t fancy touching anything on shelf because of COVID-19. To make the situation even trickier, a real-life makeover is out of the question.

Six months ago, an accurate in-store virtual try-on wouldn’t have been a go either, since AI technology worked best with unmasked faces. But now, that’s different.

New technology, called the Face Mask Detection, from Perfect Corp., allows people to experiment virtually with makeup on their masked faces.

“We had to develop some solutions to allow people to test products without touching even the screen,” said Sylvain Delteil, assistant vice president, business development Europe at Perfect Corp., who explained touchless technology can be motion or voice activated.

You May Also Like

Brick-and-mortar beauty retailers are increasingly lassoing recently developed tech and other means of making their in-store experiences more experiential than before, while conforming to the sanitary constraints and concerns caused by the ongoing health crisis.

View Gallery

Related Gallery

Marni RTW Fall 2021

Pre-COVID-19, in-store experience was important, but now it’s paramount to differentiate shopping in brick-and-mortar from e-commerce, which has been booming.

“Digital technology can enhance the in-store experience in several ways, either removing all friction points across the consumer journey or by adding rich, playful experiences to make products and services come to life,” said Martin Brok, president and chief executive officer of Sephora. “We also recognize the role that technology can play in simplifying the last-mile experience, whether in-store, online or a blend of both.

“Stores are and will remain an important channel in the beauty industry,” he continued, arguing that tomorrow’s in-store experiences will be driven by three imperatives.

“First, the capacity of the store to surprise, delight and entertain customers,” Brok said. “Physical retail is more and more about what’s new and what’s happening ‘live’ in the store.”

Second is the ability to build and personalize relationships with clients.

“In today’s world, leveraging data in the right way to understand who our customer is, what their needs are, their expectations, is key to creating deeper and richer relationships,” Brok said. “Third, [is] the connection between the store and the other channels, to be able to provide a seamless consumer journey to our customers.

“At Sephora, we have been innovating over the years to integrate brick-and-mortar and digital into an omnichannel experience,” he continued. “Today, our customers expect a seamless, fully omnichannel journey to match their shopping needs anytime, anywhere and from any device. We believe that the future of the beauty retail experience lies in bringing the best of both worlds together.”

Lubomira Rochet, chief digital officer of L’Oréal, agreed.

“We have always considered that the future was not online versus offline, but online plus offline,” she said.

So when L’Oréal is developing new digital services such as shade finders or skin diagnostics with ModiFace, the augmented reality and artificial intelligence provider the group acquired in 2018, it’s not only for online and mobile phones, but also for in-store use.

“It’s with a b-to-b-to-c approach, in fact, whereby we are more and more investing into back-end functionalities that allow the BAs to be able to capture data,” Rochet explained. “We are also investing in services that are gluing the online and the offline.”

L’Oréal has, for instance, begun working with Canadian start-up Booksy, specialized in bookings. That allows clients, for instance, to reserve appointments in hair salons.

“But you can also book a master class at a store, a makeup session, a skin consultation,” Rochet said. “You can book online and create opportunities for people to go offline. This is what we call the ‘drive to store.’

“We are really investing in experiences that you can live alone or as a community,” she said.

Outside of beauty, Rochet cited companies such as Apple, Starbucks and Nike as creating retail environments like community centers.

Nike has been expanding its House of Innovation concept. In the summer of 2020, the brand inaugurated its third such location on Paris’ Avenue des Champs-Élysées. The four-level, 26,000-square-foot emporium is intended to be a digitally powered immersive retail journey, including tech features such as a number of Nike app services in store, including Buy Online, Reserve in Store; Nike Scan to Learn; Nike Scan to Try, and Nike Shop the Look.

Nike emphasizes the experiential. Courtesy of Nike

Samsung in summer 2019 debuted a 20,000-square-foot experiential space in London’s King’s Cross shopping district, called Samsung KX. With it, the South Korean electronics brand aims to redefine traditional retail with a more multisensory, community-based destination.

The store features a massive curved Samsung screen, an entertainment stage and a kitchen fueled by the brand’s tech. Envisioned here were yoga and mixology sessions, and a gaming area for live and streamed events.

“With the retail sector facing immense headwinds, the traditional store concept is increasingly being reexamined to stay relevant to consumers,” Samsung said in a statement. “Couple that with the exponential rise in e-commerce, the rise of ‘smart shopping’ and demand from consumers for more flexibility when shopping, it’s clear that brands are having to do more to close the offline/online gap. Samsung KX bridges this with a focus on brand experience, the space itself and on showcasing the company’s latest technology innovations.”

Samsung is far from alone in showcasing its tech. Ever smarter mirrors and screens are having a moment in retail.

Ombori, a company enabling digital experiences in physical spaces, created the Interactive Voice Mirror that went live in H&M’s Times Square location in May 2018. It allows people to take selfies and get fashion inspiration based on the latest trends and looks from the retailer’s website.

The screen’s camera can detect the presence of a face. If someone gets curious and approaches the screen and looks at it for a few uninterrupted seconds, the mirror then starts up a conversation.

Prior to the H&M mirror, people tended to be hesitant about trying out screen technology in public, for fear of looking foolish, or if they’d tried an interactive mirror elsewhere and found it gave little added value, according to Andreas Hassellöf, Ombori’s CEO.

However, the H&M screen was a game-changer: People felt weird if they didn’t reply to it, he said.

So Ombori integrated that learning into the Store Assistant it recently created for Dufry travel retailer, which implemented the technology last year, pre-pandemic, in the Madrid and Stockholm airports.

This screen iteration goes a step further than H&M’s. When it stands idle, it has a dark background, but once motion’s detected, the screen turns white.

“It becomes almost like a flashlight that goes off in the corner of your eye,” Hassellöf said. “If it manages to capture your attention…then it opens up and starts to talk and present you with options.”

Those can be voice- or touch-activated and include advice such as helping people hone in on what skin-care products to purchase.

Alibaba’s Tmall worked with Intersport on a retail megastore in Beijing, where people can use a smart mirror to virtually try on clothing.

“You can buy it in store. If they don’t have what you want at that moment, you can still complete the purchase digitally in store and have it delivered,” said David Lloyd, managing director of Alibaba Group in the U.K., Nordics and Netherlands. “It will be fulfilled from the Tmall store, from the online presence.

“We do not just online to offline, but offline to online,” he said. “And we’re increasingly thinking about that, particularly this year and last year.”

Another example is how for peak travel times for the Chinese (outside the time of the pandemic), such as Chinese New Year and Golden Week, Alibaba through its Fliggy travel platform livestreamed tours in real time of the British Museum and Natural History Museum in London with informed guides. Viewers could ask questions and virtually interact.

“These livestreams have been watched by millions of people,” Lloyd said.

However, there’s not always room in store for large screens, and that’s where the ability to scan a product’s barcode or QR code with a smartphone comes in.

Perfect Corp. technology, for instance, allows people to use a barcode scan to trigger virtual product try-ons. In Asia, it worked with Dior to enable people to scan QR codes that redirect them to a website where they can select several stock keeping units.

“The trend is to move from bar codes to QR codes to get a full experience,” Delteil said.

Such tiny tech has a lot of pluses.

“You can’t put screens everywhere in a space, and that’s why these small hand-off points you can put throughout a location make it easier to get an interaction going,” Hassellöf said.

L’Oréal has deployed QR codes in many stores, with Rochet reporting that between June and December 2020 more than 1 million such scans had been done in Europe alone.

QR coded scanning has already become commonplace in Asia, but not so much in the western world. Yet people there are becoming more accustomed to the gesture, since during the pandemic many restaurants have made their menus accessible through the technology.

L’Oréal has an initiative called “augmented products,” where packaging is getting QR codes, which can help create a narrative.

“It could be for having access to virtual try-on,” Rochet said. “But it can also be to share content around the sourcing of our ingredients. We’re really thinking of QR codes as the beginning of a relationship, as a conversation.”

Creating that human connection and conversation is key, and L’Oréal is exploring multiple ways of facilitating it. “Today, people want more,” Rochet said. “Services such as tele-consultations, FaceTime — the type of interaction you an have with a human you trust — is something that has a very bright future.”

L’Oréal has doubled down on both, and most recently linked livestreaming with its virtual try-on technology, a combination Rochet called “very powerful.”

Others are exploring similar avenues. One new such example is Perfect Corp.’s BA Beauty Advisor 1-on-1 technology. “This allows a consultant to call a customer using video — a basic tool — but the beauty is that on top of that, we allow the adviser to take control of the customer’s video” and apply makeup on the face of the person, explained Delteil.

“While you are talking, the adviser has the possibility to apply makeup on your face [virtually] and in real time you will see how you look,” he continued. “It gives you exactly what’s offered in store, and you can do it during virtual calls.”

The technology launched in Ulta in May 2020.

Touchless tech will remain key for beauty sellers of tomorrow. Last August, Tom Ford Beauty inaugurated its largest freestanding beauty store, at 1,720 square feet, in Guangzhou, China. Digital components abound, including an exterior 40-foot screen showing the brand’s campaigns. People can digitally delve into the Private Blend collection’s fragrances and experience bespoke perfume services. There is a radio-frequency identification sensor that sets off a fragrance-focused visual sampling video that’s narrated by Tom Ford.

“With the increase in foot traffic in the Guangzhou store, the tools that are being most heavily utilized are the touchless experiences, such as our RFID Private Blend fragrance discovery tool, touchless fragrance sampler and our virtual try-on tool,” said Guillaume Jesel, global brand president, Tom Ford Beauty.

Jesel wouldn’t share proprietary conversion metrics, but said, citing Beauté Research, that Tom Ford Beauty sales productivity per store figured in the top four in China’s beauty industry in the fourth quarter of 2020.

“We attribute this achievement to the seamless integration of technology…into the brand’s luxury codes,” he said.

Perfect Corp. has been rolling out a series of touchless tech experiences for beauty. There is gesture-activated technology. So, for instance, if someone moves their hand in front of a screen, they’re able to change makeup skus being virtually tried out.

Voice activation is a possibility, as well. And Perfect Corp’s Virtual Lipstick Arm Swatch allows people to virtually try lipstick colors on the skin of their arm.

New technology is enabling everything from try-ons to transactions. Shiseido’s flagship in Tokyo’s Ginza neighborhood spans three floors and mixes tech and human interaction.

There, people are given smart bracelets upon entering, which can capture information on products they’re interested in purchasing and are swiped for checkout.

Alibaba’s Fresh Hippo supermarket in China also has a seamless digital physical environment, where people scan products with their mobile phones and put them in virtual baskets. At the digital checkout, one scans his or her phone.

Orders can be placed through Fresh Hippo’s app, as well, and speedy deliveries are available from a physical store at up to 3 kilometers distance.

“We have absolute visibility of the store inventory, the store operates as a warehouse,” Lloyd said. If something is out of stock, another suggestion is made to the client.

He said this is an example of brick-and-mortar and digital stores moving closer together

“It genuinely starts to feel like the two things together are more powerful than [when] you have two different experiences,” Lloyd said.

Retail industry experts are noting that today, bigger isn’t generally considered better.

“What we see now is that there is a lot of movement toward smaller spaces, more and more empowering the visitors so they can choose to be more independent in store, using their own phone to navigate the space,” Hassellöf said.

Minimum space is necessary for Italian furniture brand Natuzzi’s most recent high-tech concept. In 2019, it launched its first “augmented” store in New York. That combines virtual and augmented reality, holographs, advanced 3D modeling and an interactive product configurator.

The concept was created with Microsoft and Hevolus Innovation, and allows Natuzzi to show its full range of products without a large physical space. Wearing Microsoft’s connected glasses HoloLens, people can see holograms of miniature furniture. There’s a digital exhibit space with lifelike scale, too.

“Natuzzi is an interesting case, because it can apply to a lot of FMCG companies in general — and especially for beauty,” said Stephanie Achard, managing director of retail, luxe, FMCG, hospitality and travel at Microsoft France. “In that specific case, the question is: ‘How do I bring maybe smaller, temporary shops everywhere I want?’

“It’s all about getting visibility around the products in a digital fashion,” she said.

Natuzzi emphasizes the experiential. Courtesy of Natuzzi

L’Oréal has also been focusing on subscription-based models and how they can disrupt the delivery aspect of the retail cycle, which during the pandemic has diversified with options such as click-and-collect.

“There is no one way of getting your product,” Rochet said. “There are multiple ways, and this is something we want to work on, and also to integrate a story of optimization and sustainability. That’s clearly the next frontier — for e-commerce, click-and-collect and the go-to market in general.

“Optionality of delivery will be key in building this omnichannel experience with sustainability in mind,” she continued. “What’s costly from an environmental point of view is also the last-mile delivery, the management of returns. All of that is where the store will have a key role, as a fulfillment center and a last-minute delivery through click-and-collect also. A lot of it is a completely new chapter that we have to write.”

Microsoft has another type of subscription model in mind for retail. Achard believes that with so many people shopping online now one might question whether it still makes sense to have a lot of low-priced products taking up a lot of stock space in store.

She suggests possibly considering having some kind of services, like Amazon Dash buttons, linked to a buying pattern, and then shipping products via a subscription model. That way, a store can physically stock more high-margin products, and events can be created around some of those to create newfangled in-store experiences.

It’s also interesting for retailers to find new ways of getting cash flow into their business. Microsoft worked with Kroger in the U.S. to embed digital displays in the retailers’ shelving.

“It’s more than just giving you the price,” Achard said. “It’s providing a source of advertisements, having the FMCG companies pay for this media, and maybe also allowing [them] to say: ‘If you’re buying this pack of pasta, then why don’t you consider these additional products.’”

That project, which was initially just for Kroger, became such a strategic asset to the group that it opted to form an affiliate company that developed into an independent software vendor reselling those solutions to other retailers.

Data garnered from the different technologies deployed in store will also be invaluable for future growth.

“Brands are getting better at using data and working with a platform like ours to say: ‘How do I create a product for the market?’” Lloyd said.

The Tmall Innovation Center allows some brands on the platform to use consumer feedback — Alibaba culls real-time data from hundreds of millions of consumers — to help come out with products exclusively for the Chinese market. That’s how Spicy Snickers, the candy bar, was born and sold out.

“Consumers were craving something with a bit more of a Chinese flavor to it,” Lloyd said. “We do [increasingly] more of this kind of work with brands. You can get a product to market really quickly, which is meaningful for consumers.”

For its part, Walmart operates an Intelligent Retail Lab in Levittown, N.Y., which includes AI-enabled cameras, interactive displays and a huge data center. There, new ideas are tested in a 50,000-square-foot brick-and-mortar environment.

Inventory is tracked in real time, and kiosks are set up to educate consumers. An interactive wall shows people how AI can estimate where a body is positioned.

Microsoft’s Dynamics 365 cloud application uses cameras and AI to identify where a technical interventions need to be done in store and can also help retailers understand how people travel through the aisles and therefore the optimal product placement.

Experts say this is just the beginning. Brick-and-mortar and online beauty retailing are fusing faster than ever.

“We envision that the fusion of creativity and analytics will unlock a new level in omnichannel retail beyond convenience and services, where the luxury client experience online and in-store echo and inform each other,” Jesel said.

Source: Read Full Article