India's Tata Group is aiming to build at least 20 "beauty tech" shops where it will utilize virtual cosmetics booths and digital skin testing to convince young, wealthy customers to buy high-end cosmetics.
With this initiative, Tata, whose business interests range from jewellery to automobiles, will compete with LVMH's Sephora and a domestic rival, Nykaa, for a slice of India's rapidly expanding $16 billion beauty and personal care sector.
Tata is looking to partner with The Honest Company, Ellis Brooklyn, and Gallinee to target what it refers to as a "beauty enthusiast" in India who falls between the ages of 18 and 45 and enjoys purchasing international brands like Estee Lauder's M.A.C. and Bobbi Brown. The source aware of the idea, who did not mention any particular brands, claimed that Tata is in discussions with more than 24 businesses to deliver exclusive merchandise to the new stores.
According to a Tata statement, the shops' bright red facades will display the Tata CLiQ Palette logo, and 70% of the items sold there will be skincare and cosmetics. According to the paper, Tata intends to install technological tools inside the stores that will allow consumers to virtually put on a variety of lipstick shades on displays and receive digital skin analyses to determine which items could fit great for them.
Although the technology is not fresh and is used by other beauty firms across the globe, this move into "experiential retail," as it is known among industry professionals, is still a relatively new idea in Indian malls and high street shops.
"Experiential retail is going to be a big thing in India as more customers will spend their leisure time at such stores," affirmed Pankaj Renjhen, co-managing director of Anarock Retail consultancy in India. "In the premium segment - where a customer is looking for things beyond price - experiential retail helps trigger impulse shopping and can entice them."
However, Renjhen emphasized that the commodity and the brands have to be exclusive and excellent, only then the customer would come back.
Tata must compete fiercely to benefit from the anticipated expansion. There are 26 stores where Sephora sells beauty and scent products in India, where it has been present for around ten years. According to an insider, Mukesh Ambani's Reliance has a long-term plan to establish 400 beauty outlets, with the first one perhaps opening in a Mumbai mall the following month.
According to the source, Tata will probably establish its first "beauty tech" shop by the end of March. The business will then likely expand during the initial part of the upcoming fiscal year, starting in April, and could open up to 40 stores overall.
Tata is also experimenting with the implementation of geofencing technology, which will permit employees to recognize when a client using its application arrives at the store and share the consumer's purchase history and wish list with them so they can provide personalized guidance.
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