Ulta Beauty Presses On with AI and AR Technologies
A beauty supply giant Ulta Beauty continues making strides. As of today in late 2019, Ulta Beauty operates 1,200 stores nationwide and plans to keep opening new stores at a rate of more than 70 new stores a year. In the midst when most offline retailers are in a slump, what is driving Ulta Beauty’s aggressive business strategy and continued growth?
Though many internal and external factors should be considered, retail industry experts are paying attention to Ulta Beauty’s latest attempt to blur the boundary between online and offline retail using cutting edge technologies. Lately, Ulta Beauty has adopted advanced technologies including Artificial Intelligence (AI), Internet Of Things (IOT), Virtual Reality (VR), and Augmented Reality (AR) for its beauty retail business. In late 2018, Ulta Beauty acquired an AI start-up, called QM Scientific, and an AR start-up, GlamST, in its effort to bring technologies to its retail floor. Let’s find out how Ulta Beauty is applying AI and AR technologies to its beauty retail business.
How actually using AI technology?
QM Scientific, acquired by Ulta Beauty in November 2018, is a developer of shopping assistance technology based on artificial intelligence. The AI can analyze individual customer’s preferences and habits to provide an optimized suggestions and product information as well as to recommend products. The AI technology is channeled through a mobile application, a robot, or equipments installed in a store. The AI tools can provide personalized information based on customer-provided data. In addition, the consumer’s shopping behavior data can be collected and analyzed to predict when and how the customer would make purchases, making development of individualized marketing strategy possible. The AI can talk directly to customers and find out their desires in order to provide customized shopping assistance.
Based on the AI technology, early this year Ulta Beauty’s website (www.ulta.com) started offering a virtual beauty advisor service. This service is also available via Ulta Beauty’s smartphone app GlamLab. This AI beauty advisor can be also tapped into from any computer or mobile devices. It prompts users with questions, and from their answers, data is collected to make individualized product suggestions.
Also, a service called “store-to-door” was launched to help customers visiting a store to find items currently not available at the store. Under this program, employees can place online orders on behalf of the customers. Through this service, customers can also purchase online exclusive products, and it reportedly resulted in a 20% boost of online sales this year compared to last year.
How actually using AR technology?
On the other hand, Ulta Beauty also launched a VR make-up service via an augmented reality application GlamST, which could be accessed using a mobile app, web, or in-store starting earlier this year. The augmented reality technology can overlay images selected by customers over an object captured by a camera. Through virtual reality experience of products, customers can obtain accurate product information and thereby make better choices. Currently, the augmented reality technology experience is being offered at six pilot locations with respect to make-up and hair color products. Customers visiting those stores or salons can use Ulta digital stylists to see their virtual try-on images on the screen. Following the completion of the field test, it is anticipated to roll out to all stores in 2020.
AI & AR in Ulta Beauty mobile app
Let’s find out how the AI and AR technologies developed by start-ups are implemented in Ulta Beauty mobile app in detail. Currently, mobile app users can take advantage of the following convenience features.
First, customers can download discount coupons or get birthday gifts via Ulta Beauty app. Signing-in for a royalty program, earning and managing bonus points, and getting promoted to a diamond or platinum customer can be all done through the app. The app also provides a location-based service that notifies the user of special deals at nearby locations
Second, Ulta Beauty app provides augmented reality experience enabling a virtual try-on of make-up, eyelashes, and coloring products. Smartphone users can virtually try certain make-up products on their face captured via a smartphone camera. For example, lipsticks and eye shadows can be applied virtually on their faces, and the app visualizes the effect
Third, customers can talk to the AI. By simply talking to the app, customers can find a product that satisfies their needs and desires. Assisting the customers with a detailed product location within the store is now a standard feature.
Lastly, customers can use the mobile checkout feature to avoid lining up at the cash register. Mobile app users can utilize their stored mobile payment such as Apple Pay and PayPal as well as pay with their credit cards to check out items in their carts. Of course, they can place online orders via app.
Through AI and AR customer services, Ulta Beauty is increasing the number of its royalty members. Ulta Beauty says more than 95% of their sales are being generated by those royalty members. In 2018, Ulta Beauty boasted about 30 million royalty members, and the number keeps increasing. Many are paying attention to the outcome of Ulta Beauty’s move forward with the cutting edge technologies