When Sephora launched in the U.S. in 1998, it radically changed the cosmetics buying experience, replacing the controlled department store counter transaction with a hands-on, candy store-style field day for makeup lovers. In recent years, the brand has aggressively integrated digital and in-store retail, and today opened its new Innovation Lab, a team and facility focused on "envisioning the future of retail for Sephora, and making sure that we're staying ahead of our clients and the different trends that are out there," says Bridget Dolan, a 14-year digital marketing veteran of the company whose title is now VP, Innovation Lab.
The Innovation Lab itself is a converted warehouse near San Francisco's Mission Bay district, previously used by Sephora to build and evaluate in-store display models, now configured to develop and test a broad range of digital experiences designed to inform and enhance shopping across web, mobile, and brick-and-mortar. In addition to open meeting and brainstorming spaces, the lab includes a full model of a Sephora store, including display windows. The Innovation Lab team will spend two days a week in the space, as well as hold testing and feedback sessions with store associates (known as the "cast") to ensure that digital in-store experiences align with sales staff's knowledge of customer needs.
"Our digital innovations have always been developed with the client in mind—what will be useful and helpful to her," says Dolan, "as opposed to trying a bunch of technologies to be buzzy and interesting."
The opening of the Innovation Lab corresponds with the rollout of four new digital programs. The first is Pocket Contour, a product that, using a mobile device, provides a tutorial on contouring (applying highlighting and shading makeup) to complement the user's specific face shape. By uploading a selfie to the app, the customer gets step-by-step contouring instructions and product recommendations. "Contouring is a bit tricky for the average client—you can watch a tutorial for how to do it, but what I need to know is where to apply the makeup on my very own face," says Dolan. "This is a 360-degree approach to contouring. If we're going to tell our clients that contouring is the next trend, we better teach her how to do it. 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."
Second, Sephora is launching Beacons in all locations, after beta testing the program in two San Francisco-area stores. The location-aware, opt-in mobile notifications activate in the store through the Sephora to Go mobile app, which is linked to a customer's online account, to notify them of promotions and birthday month benefits, remind them of in-store services like mini-makeovers, and display information such as a customer's point balance with Beauty Insider (Sephora's rewards program) before they reach the register so they know how much they would need to spend for the next reward. Beacons also prompt users to set their mobile app to "store mode," which displays a menu limited to in-store-relevant information such as a customer's saved online shopping cart and the bar code for their Beauty Insider card to use at checkout.
"The truth is, not everyone knows that, for example, you can get a free makeover at Sephora," says Dolan. "We want to give the customer the confidence to pursue these benefits, give her permission."
Also in-store in about a month will be an augmented reality front-window display featuring female founders of numerous cosmetic brands that Sephora carries, such as Laura Mercier and Kat Von D. When a customer hovers their phone over a founder's face, a video telling the story of the founder and the brand will automatically play, and stop when the phone is moved away. The videos will also link to any makeover tutorials that the founders have on Sephora's site.
Finally, Sephora is introducing Flash, which is essentially the company's version of Amazon Prime—for an annual enrollment fee of $10, customers get free two-day shipping, or overnight shipping for $5.95. For VIB Rouge members—those who spend $1,000 or more at Sephora in a calendar year—Flash is a free benefit. "We found that when women hear about a product they want, they just want to buy it, they don't want to amass a basket, or put it on a list to think about later," says Dolan. "So this is how we are fulfilling that need for instant gratification." In a pilot of the program, says Dolan, clients who signed up for Flash spent twice as much as other clients who had previously been comparable shoppers.
Dolan says there will be no set schedule for the launch of new Innovation Lab projects, but development will be guided by "what we're talking about as an organization. So for example right now we're focused as a company on contouring and brand founders, so we're leveraging technology to communicate those themes." Specific shopping innovations like Beacon and Flash, says Dolan, "may be less common, but will have staying power and be very important to us in the long run."
While the high-styled "innovation lab" concept has become popular among retail and technology companies to highlight their experimental activities, the separate, customized space outside of Sephora corporate headquarters will have specific value given that, despite Sephora's long-time investment in e-commerce, in-store shopping and personal interaction is still extremely important to the brand's success. "So much of what we're doing is focused on technology and how it leads to the in-store experience, or how a client will use her own phone in our stores," says Dolan. "We created this space for that reason. It's also meant to be a place where we can get outside of our four walls and think about big ideas and test those ideas, meet vendors, test their technologies. A place where we can stand things up and come in and try them, in a legitimate Sephora experience."