On July 8th, Alibaba unveiled its experimental unstaffed store, Tao Café, at the 2nd Taobao Maker Festival. The Tao Café is an unstaffed, 200 sqm offline store for selling products and food. The compact outlet can accommodate up to 50 customers at one time. This latest opening marks another milestone in a boom year for retail innovation that has seen the growth of unstaffed retail outlets, shared bikes and other share services.
A growing number of companies have raced to test unstaffed stores this year. Unstaffed convenience stores such as BingoBox, F5 Future Store, and Eatbox have made their debut across China. These retail innovations raise the question of if and when similar unstaffed retail outlets will open to serve the cosmetics market.
Smart Payment, No Lines, and Fast Checkout
Mobile phone-based payment apps are already capturing a growing share of offline cosmetics transactions in China. Platforms such as Wechat Pay and Alipay have been quickly adopted throughout China’s cosmetics retail sector.
Smart Management and Big Data
The 22nd Edition of China Beauty Expo in May saw a growing number of exhibitors selling solutions instead of products. One example was 1Haomei’s facial recognition solution for professional beauty applications. The expo also showcased a radar-powered data tracking system that integrates sales tracking and predictive analytics.
Another provider of retail and marketing management solutions was Yolipai. The company focuses on serving cosmetics retailers with a range of software and mobile marketing products. These were just a few examples of how smart technology is streamlining store management and transforming front-line customer interaction.
In April, T3C launched its first smart make-up experience store in China – a breakthrough in a sector plagued by little differentiation. One of the store’s biggest innovations is the use of large space for providing consumer experiences and services. In the store, customers are able to experience virtual make-up mirrors, skin and scalp monitors. The store not only offers products, but serves coffee and provides make-up and manicure services.
Sephora, the French cosmetics retail powerhouse, also is emerging as a leader in the application of AR technology to retail experiences. By using AR inside its stores, Sephora is able to create a more appealing shopping experience. The company is opening Sephora Beauty Tip Workshops where customers can use simulators to virtually apply make-up and see how specific make-up products will look on them by simply scanning a QR code.
Retail industry insiders see technology-enabled, personal experiences as one of the most powerful tools that offline stores can use to retain consumers. This is particularly important in the cosmetics industry where make-up retailers sell 80% of their products through consumer trial and experience. So, VR and AR technology can play a major role in transforming the cosmetic customer experience.
Smart Shopping Guides
Although many consumers may expect “smart technology” to mean a steady stream of recommendations from persistent, virtual shopping guides, the intelligence shopping experiences that cosmetic retailers are developing actually attempt to reduce forced recommendations and give consumers more freedom to make independent choices.
In addition to retailers, brands such as Elixir and Laneige are also providing their outlets with virtual make-up application technology. This is intended to empower the consumer to control her own shopping experience instead of facing the sales push of in-store beauty assistants.
How Far are We from Unstaffed Cosmetics Stores?
Although they’re not here yet, unstaffed cosmetics stores are on their way. Payment is being streamlined and in-store staffing is likely to be gradually reduced as intelligence technology changes the shopping experience and the role of the traditional beauty assistant. The growth in smart cosmetics stores is likely to challenge and transform the number and function of traditional offline beauty retailers.