• by Sarah Mahoney , March 7, 2015

Sephora is vowing to take its digital game to the next level, unveiling a series of innovations that include beacons, augmented reality, and an inventive new makeup app.

The company included the new digital initiatives as part of its announcement about the new Sephora Innovation Lab, opening in San Francisco. The new facility “will tap the collective creativity of our 14,000 employees nationwide, grow the next generation of leaders, and elevate Sephora's digital future," says Calvin McDonald, president and CEO for Sephora Americas, in its announcement.

Sephora, which has about 1,800 locations and is owned by LVMH Moët Hennessy Louis Vuitton, is introducing four new digital experiences, including:

• Beacons: These will be in stores nationwide, delivering personalized alerts to shoppers who have opted in.
• Pocket Contour: In a partnership with Map My Beauty, “the first-of-its-kind cross-platform personal virtual make-up artist application takes the mystery out of contouring,” it explains. The mobile app analyzes a photo, then gives personalized, step-by-step advice to achieve a contoured look.
• Augmented Reality via the Sephora-To-Go mobile app: Starting next month, shoppers can view custom content in stores by hovering their phone over such famous cosmetic faces as Josie Maran and Laura Mercier. AR content includes brand founder interviews, product videos and YouTube playlists.
• Sephora Flash: A new shipping program offers free two-day shipping to Rouge Beauty Insider members, and a $10-per-year fee for non-Rouge members.

While Sephora continues to gain market share from other retailers and to increase its online sales, there’s evidence that women are shopping less for beauty products. The NPD Group’s latest Annual Beauty Consumer Economic Indicator says that while eight out of 10 women shop for beauty products, the total number has fallen 4%, reaching the lowest level since 2008.

“Consumer attitudes have changed, and beauty is viewed differently than it was in years past,” writes Karen Grant, NPD’s global beauty industry analyst, in the report. “Today, there is more competition among beauty brands and retailers, and more competition between beauty and other products, services, and even experiences, such as vacations, entertainment, and dining. The consumer's desires outside of beauty have become just as important as those inside.”

The study reports an important distinction in women’s attitudes. While about half say that spending on beauty products is the first thing they would pare back if money got tight, “an almost equal proportion say they would continue to buy beauty products in such a situation because the products make them feel better about themselves.”

Women were about one and half times as likely to say they’d cut spending on fragrances and makeup, which they view as special-occasion products, than on skin or haircare. And if given $100 for beauty purchases, the majority says they’d splurge on fragrance or color cosmetics.

“If the industry responds to the consumer in new and exciting ways,” writes Grant, “these opportunities will drive growth in 2015.”