Beauty behemoth Sephora recently accelerated its digital drive with a new San Francisco-based Innovation Lab and a newly dedicated team that will imagine the future of retail cosmetics. 

It’s a natural move for Sephora, as upturning standard consumer experiences has long been part of the company’s DNA. When the French brand arrived stateside in 1998, most makeup was sold by commission-driven department store reps carefully gatekeeping their wares from behind a beauty counter. Sephora reversed the model by creating open, explorable stores that put customers in the driver’s seat, attracting a new type of shopper and fueling the company’s massive growth. It now boasts 360 North American stores, among 1,780 total locations in 29 countries worldwide.

Given its large and successful brick and mortar presence, Sephora’s Innovation Lab will focus on interactions at the intersection of digital and physical retail. The team will focus on building discreet, meaningful experiences that put the consumer first. “Our digital innovations have always been developed with the client in mind," Innovation Lab VP Bridget Dolan said. “What will be useful and helpful to her, as opposed to trying a bunch of technologies to be buzzy and interesting.”

Here are the Innovation Lab’s first four projects: 

Beacons

After a successful San Francisco pilot, Sephora is launching Beacon technology across all its locations to create hyperlocal personalized engagements. When a shopper enters the store, the beacons will interact with the Sephora To Go mobile app via low energy bluetooth to alert her of store-specific promotions, direct her to in-stock products from her wish list, and help her check out with her Beauty Insider rewards account. 

Augmented Reality

To help tell the Sephora story, stores will begin rolling out augmented reality window displays featuring female beauty brand founders like Laura Mercier and Kat Von D. When shoppers hover their smartphone over the founder’s image, a video introducing the founder's products will begin to play alongside links to online makeup tutorials. As the shopper moves her phone away from the image, the video will automatically stop playing. 

Pocket Contour

Building on the growing trend of contouring (creating angles with highlighting and shading makeup), Sephora is launching the Pocket Contour app to translate the in-store makeup tutorial to a mobile experience. After uploading a selfie to the app, a shopper will get step-by-step contouring instructions and product recommendations personalized for her features.

“If we’re going to tell our clients that contouring is the next trend, we better teach her how to do it,” Dolan said. “We of course have mini-makeovers in the store where we’ll apply contouring makeup, but if you can’t do it when you get home, we’ve disappointed you.” 

Flash

Sephora’s Flash enables seamless transactions by giving customers free two-day shipping (or $5.95 overnight shipping) for an annual enrollment fee of $10. Flash will help Sephora meet shoppers’ Amazon Prime-driven expectations for instant gratification and encourage smaller, more frequent ordering. In a pilot of the program, clients who signed up for Flash spent twice as much as other comparable shoppers. 

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It’s not enough to simply open up an Innovation Lab and say your company’s digital transformation is complete, but Sephora is intelligently structuring its new initiative to set up the company up to be a leader in omni-channel retail. 

Rather than focusing on a single all-encompassing digital solution, Sephora is building smaller, discreet experiences that are valuable to shoppers in and of themselves. Structuring development like this empowers the Innovation Lab to be nimble and quickly deliver value to shoppers, while rapidly testing and reacting to product successes and failures.

The company’s consumer-first approach also proves that Sephora has done its research and understands the rewards and pain points of the end-to-end shopping journey.

Finally, Sephora's Innovation Center will be a success because it stays true to the company's brand and business model. The emphasis the intersection of digital and physical interactions acknowledges that in-store shopping is a key relationship driver for Sephora customers. By leveraging digital innovation to extend and enhance in-store experiences rather than replace them, Sephora will build a meaningful new model for retail that’s greater than the sum of its parts.

(Originally Published on LinkedIn // May 15, 2015)