Last updated on March 6th, 2024
Change is constant and brands, regardless of their industry, must embrace it to stay competitive and thrive. Unfortunately, many organizations in the recent past have failed to keep up with the change and ended up frittering away the little opportunities they had. Inadequate understanding, limited resources, fear of complexity, and resistance to change are some common reasons that brands fail to embrace new technologies.
But there are some brands that have made history by drastically transforming themselves through advanced technologies such as AI and AR. Sephora, the sought-after beauty and cosmetics retailer, makes a prime example that has leveraged the power of artificial intelligence (AI) and data analytics augmented reality (AR) to become a digital trailblazer.
Today, Sephra stands at the top spot as the number one beauty retailer specialist in the world. It serves the beacon of innovation in the beauty industry. The beauty retail giant is accredited for transforming retailing through a forward-thinking approach and customer-centric focus. By embracing cutting-edge technologies, particularly AI and AR, it stands out and has cultivated a loyal customer base globally.
While the specialist beauty brand uses AR to allow its customers to virtually try its range of beauty products, it leverages AI to offer personalized recommendations. This blend of AI and AR and exceptional products make Sephora a trendsetter in the beauty retail industry.
Let’s explore in detail the company’s digital transformation journey, the role of AI and AR in its success, and what you can learn from it.
Also Read: Sephora’s Journey To Success: Unveiling The Beauty Of Innovation and Strategy
Sephora’s Digital Transformation Journey – A Glimpse
Here’s a rundown of how the brand has digitally transformed the beauty landscape to better meet the needs of customers and dominate the market in the swift and ever-evolving retail environment.
Sephora’s digital journey began in the US in 1999, with the launch of its website. The company also invested in mobile early on and introduced its mobile app in 2010. It was more than just a place to make purchases. The Sephora to Go app is currently one of the top 25 retail offerings in the Shopping Category for Apple’s App Store.
Sephora equipped its app with some of the latest AI tools like a virtual lipstick assistant and unique reward programs to enhance the customer experience. It also set the perfect example for other companies to utilize data-driven technologies. Sephora believes that offering customers the tools that help them make informed purchasing decisions encourages more spending from them. This customer-centric approach has helped the retail brand build an incredible customer base.
As Mary Beth Laughton, Sephora’s VP of Omnichannel said, “If a customer browsed online then bought in-store, we can see that. We just weren’t looking at it before, but it’s a win for both channels. We had good relationships across our channels, but we weren’t collaborating or finding synergies, and we were maximizing business in isolation. We’re more aligned, and we can move faster across in-store, online, and mobile strategies. Mobile is the glue that holds it all together.”
As of early 2024, Sephora’s strategy has resulted in its mobile app having over four million downloads in the U.S., and more than 988,000 downloads in France. On the social media side, 19 million Facebook fans, 21 million Instagram followers, and over 600,000 Apple Passbook registrations.
Sephora has also digitally revolutionized its in-store experiences. In 2015, it opened its innovation lab with the aim of enhancing its app with technology. It explored and strategized using different types of artificial intelligence such as machine language, natural language processing, and computer vision. The aim was to fill the gaps between its online and in-store experiences.
The launch of the Sephora Innovation Lab enabled it to develop a broad range of digital experiences for informing and enhancing shopping across the web, mobile, and in-store. Further, the retail brand merged its digital and physical retail teams to look at customers from a 360-degree perspective and use AI better to target the customer.
Laughton says, “The power of using that data to better appeal to her at every touchpoint and understand her in a deeper way enables us to create these experiences that she cares about across our channels. Loyalty is a data-driven ecosystem, so that’s hugely powerful.”
Role of AI and AR in Sephora’s Digital Strategy
The company recognized the potential of AI and started integrating it into its digital strategies in early 2013 and continued thereafter. While other global brands were still trying to guess whether AI was just a fad or a lasting innovation, Sephora had already started leveraging AI.
The brand’s ability to work with AI and AR technologies speeds up its progress across multiple touchpoints. Whether it’s offering a reliable online customer experience or enhancing their in-store experiences even more, Sephora has been exploiting these technologies.
Some of the AI/AR technologies used by Sephora are:
Virtual Artist
Also commonly referred to as Virtual try-on, which allows shoppers to virtually test different makeup products, such as lipsticks, eyeshadows, and foundations, using their smartphone cameras. Visual Artist not only makes buying products easier and more fun but also help customers visualize how products will look on their skin and make informed purchase decisions.
NLP, ML, and Computer Vision
Sephora utilizes different Artificial Intelligence techniques, including Natural Language Processing (NLP), Machine Learning, and Computer Vision. It allows the retail brand to understand customers better and improve the overall customer experience.
For instance, by gaining insights into customers’ search preferences and order history, Sephora sends them personalized recommendations. This enhances the overall shopping experience and increases the likelihood of customer satisfaction.
Further, Sephora’s Beauty Insider Program uses data analytics to understand customer behavior and preferences. Through the program, Sephora can offer personalized rewards, discounts, and exclusive access to products based on a customer’s purchase history and engagement with the brand.
Similarly, AI-powered chatbots on Sephora’s website and mobile app offer real-time assistance to customers. These chatbots can provide information about products, help with troubleshooting, and offer beauty tips. This not only improves customer service but also ensures that customers receive timely and relevant assistance.
Based on the above AI-based technologies, Sephora creates customer experience strategies, including:
- Predicting what customers want based on their preferences.
- Providing the customers with the right tools.
- Implement unique customer loyalty programs
- Addressing the most common and existing customer beauty concerns.
- Personalized product recommendations based on the customer’s behavior.
Fragrance IQ System
Sephora offers a Fragrance IQ experience to its in-store customers. It uses the first-to-market sensory technology called InstaScent, which lets clients test 18 different scents using a dry air delivery system. This way, customers can test scents without actually trying them on.
ColorIQ Technology
Sephora uses the ColorIQ technology to read the skin tone of its customers. It then matches the skin tone with all the possible product color options available in the store. This makes it easier for customers to choose the right product for their skin, without experimenting with multiple products and saving them valuable time.
Read More: How to Develop a Cosmetic Shopping App like Sephora?
Benefits of AI and AR For Sephora
No doubt, Sephora is keen on taking its beauty retail brand to the next level by exploiting advanced technology. It has contributed immensely to shaping the beauty retail industry. Here’s how leveraging AR and AI has benefited Sephora over the years:
Stay Innovative
Integrating AI and AR to enhance its in-house and mobile experiences and staying consistent at it ensures Sephora remains a pioneer in beauty retail. These tools improve the customer experience and provide interactive and personalized features such as virtual try-ons.
By embracing these technologies, Sephora not only sets itself apart from competitors but also attracts modern-day customers seeking innovative shopping experiences.
Enhance Beauty Shopping Customer Experience
Using high-end technologies like AI and AR has helped Sephora improve its customer experience, both offline and online. By integrating features and services such as virtual try-ons and skin tone matching, the retail brand is able to provide a realistic preview of its products.
Further, personalized recommendations, Live Beauty Assistants, and Beauty Quizzes ensure that customers find products tailored to their needs. This way, Sephora offers immersive and interactive experiences that improve customer satisfaction, boost confidence regarding their purchase, and ultimately transform the way people shop for beauty and cosmetic products.
Adding Value Via Education and Inspiration
Sephora understands well that beauty is an art and should be mastered over time. To help customers use its products in the right way, Sephora offers make-up tutorials, product information, and trend guides. It leverages AI and AR to provide such educational content, helping customers stay informed and up-to-date with the latest beauty trends.
By enhancing their knowledge and inspiring creativity, Sephora adds value beyond just selling products, creating a more engaging and fulfilling shopping experience for its customers.
Build A Massive Customer Community
By offering what customers in a way they expect using AI and AR, Sephora has cultivated a strong and loyal community of beauty enthusiasts. These technologies allow Sephora to offer tailored product recommendations, virtual try-on features, and interactive beauty tutorials, promoting a sense of belonging and engagement among customers.
As a result, Sephora establishes lasting relationships with its customers, driving repeat business and advocacy within the beauty community.
Increase Revenue and Profits
Sephora has been breaking records year after year when it comes to revenue and profits. It does this by offering exceptional customer experience, winning the trust of customers, and increasing revenue. Highest product quality, outstanding customer services, and unparalleled experience with the use of AI and AR – all lead to increased sales, ultimately boosting revenue and profits for Sephora.
Sephora & Other Premium Brands – How Others Are Leveraging AI and AR for Their Business Growth?
Here’s how other brands in different domains are using AI and AR to their advantage:
Google Photos (Image Recognition and Organization)
- AI-Based Image Recognition: Automatically categorizes and tags photos.
- Facial Recognition: Identifies and groups photos of individuals.
- Object Recognition: Recognizes objects and scenes within photos.
- Smart Albums: Automatically creates albums based on content.
- Target Audience: General users looking to organize and manage their photo libraries.
Amazon Alexa (Voice-Activated Assistant)
- Voice Commands: Users can interact with the device using voice commands.
- Smart Home Integration: Controls smart home devices based on voice instructions.
- Personal Assistant: Provides weather updates, news, and other information.
- Skills: Third-party integrations for additional functionalities.
- Target Audience: Users seeking a hands-free and voice-activated smart assistant.
Netflix (Content Recommendation)
- AI-Driven Content Recommendation: Recommends movies and TV shows based on viewing history.
- Personalized Profiles: Each user gets personalized content suggestions.
- Trending Now: Displays popular and trending content.
- Content Discovery: Helps users discover new shows and movies.
- Target Audience: Entertainment enthusiasts, movie and TV show streamers.
Duolingo (Language Learning)
- Personalized Learning Paths: Adapts lessons based on user proficiency.
- Gamified Experience: Incorporates game-like elements for engagement.
- AI Assessment: Evaluates user performance and adjusts difficulty.
- Daily Goals and Streaks: Encourages consistent learning habits.
- Target Audience: Language learners of all levels.
Tesla Autopilot (Autonomous Driving)
- Autopilot Mode: Enables semi-autonomous driving on highways.
- Navigate on Autopilot: Guides the car from on-ramp to off-ramp.
- Traffic-Aware Cruise Control: Adjusts speed based on traffic conditions.
- Auto Lane Change: Automatically changes lanes with driver confirmation.
- Target Audience: Tesla car owners interested in autonomous driving features.
IBM Watson (Enterprise AI)
- Natural Language Processing: Understands and processes human language.
- Machine Learning Models: Supports the development of custom machine learning applications.
- Predictive Analytics: Analyzes data for predictive insights.
- Chatbots and Virtual Agents: Provides conversational interfaces for businesses.
- Target Audience: Enterprises and businesses seeking AI solutions.
Fitbit (Health and Fitness Tracking)
- Activity Tracking: Monitors steps, distance, and calories burned.
- Heart Rate Monitoring: Provides real-time heart rate data.
- Sleep Tracking: Analyzes sleep patterns and provides insights.
- Personalized Goals: Sets individualized fitness targets.
- Target Audience: Fitness enthusiasts, and individuals monitoring health and wellness.
Future of AI and AR in Sephora’s Digital Strategy
Digital innovation has always been a part of Sephora’s growth strategy, placing high importance on AI and AR. With Sephora’s innovation in using and optimizing AI and AR, it has proven that there is room for AI and other intelligent models, even in relatively simple industries like cosmetics.
In the recent few decades, Sephora has digitized its entire business strategy, including its in-store, in-app, and online solutions. It is still one of the few brands that has a dedicated section on its website where you can go in and personalize the experience for yourself. What Sephora showcases or offers helps the beauty retailer understand their customers better, and deliver the kinds of experiences that exceed customer expectations.
Talking about the future, “If you walk into a Sephora five or ten years from now, every aspect of your experience, from what you see to the products you are recommended will be customized based on your face shape, your sales history, and your preferences,” says Parham Aarabi, CEO of ModiFace. “That personalization will really make life easier for shoppers. But it’s also better for beauty brands, because they can increase conversions by making sure their products are relevant to each shopper on a personalized level.”
Sephora is continuously trying to promote a lot of innovation within the company as a whole. Businesses that are on their journey to digital transformation should learn how to understand the pain points of their customers. They should then determine how their customers’ pain points can be fixed using and leveraging digital technology to offer the best solutions.
Important: Sephora Insider: Exclusive Offers, Discounts, and VIP Access
Do You Want To Build an AI-Powered Solution Like the Sephora app?
Sephora’s tech strategy is successful because it embraces innovation not just for purchasing digital solutions but also for creating digital environments and experiences that meet customers’ needs and preferences.
Our team at iTechnolabs is known to offer exceptional AI and AR solutions and integrate them into your business model. We are a leading tech organization that builds AI-powered solutions to help you with your digital transformation journey. Our AI and AR solutions aim to make your shopping experience faster, easier, and more fun.
So, if you too want to kickstart your digital transformation journey for your beauty and cosmetic business, get in touch with us. We will connect with you, discuss your requirements in detail, and offer our services accordingly.
