Korean cosmetics giant Innisfreethis week embarked on a head-to-toe digital makeover in China, with one of its Hangzhou stores introducing New Retail features to secure its leading position in the country’s imported beauty sector.

Near the city’s famous West Lake, inside the Li Xing Shopping Plaza, is Innisfree’s first full New Retail store, kitted out with interactive technologies from Tmall to make shopping easier and more appealing.

WATCH: Innisfree Revamps With New Retail

New Retail is a business model developed by Alibaba founder Jack Ma in 2016. It uses technology to merge online and offline shopping into one comprehensive channel to benefit consumers and brands. For those consumers, New Retail means added convenience and fun whether buying through an app or at a physical store. For merchants, the model offers a holistic view of their customers’ shopping patterns both online and off. These insights help brands more precisely target their product offerings and marketing campaigns.

“Brands that remain fashionable over time are those which best understand consumer behavior, and that is why we think New Retail is so important for businesses in the future,” said Mike Hu, the president of Tmall Fast-Moving ConsumerGoods.

As the spending power of China’s middle class has climbed, so has demand for quality beauty products. In 2017, the market value for skin care and makeup in China jumped 17% and 30% year-over-year, respectively, outpacing the 4.3% increase for the FMCG sector as a whole, said Kantar Worldpanel. Millennials (born in the 1980s) are the main engine powering this growth. They are buying skincare products as early as 20 years old, much earlier than consumers born in the previous decade.

Digitization of Beauty

In the Hangzhou shop, recast as an “Innisfree x Tmall New Retail Store,” customers get a feel for the Innisfree brand through games, entertainment, education and personalized offerings. Innisfree’s makeover follows that ofIntersport, a Switzerland-based sports retailer who fully digitized its Beijing flagship store through New Retail in May.

“Tmall’s technology and experience will undoubtedly play a vital role in formulating our New Retail layout in the Chinese market,” said Filipp Cai, general manager of Innisfree China. “We have introduced digital, entertainment and interactive technologies in our physical stores, merged online and offline membership and enhanced consumer insights through upgrading our stores.”

The New Retail features include:

• Magic Mirror: This augmented-reality (AR) technology allows consumers to experiment with different makeup virtually. Customers have the option of making the purchase in-store or ordering immediately from Innisfree’s flagship store on Tmall by scanning a QR code with their Mobile Taobao app.
• Smart Skin Analyzer: By placing the high-precision camera on different parts of your face, the device analyzes the images and instantaneously generates a detailed report of your skin condition. It also recommends the best Innisfree products to suit your skin. A scan of a QR code lets customers to keep the report in their Taobao account.
• Vending Machine: Using the Mobile Taobao app, customers can scan a QR code and purchase a face mask at a steep discount.
• Smart Shelf: When a customer picks up a product from the sensor-equipped shelf, product details pop up on a touchscreen. This allows customers to learn more about the product before buying.
• Cloud Shelf: This technology is most suitable for stores with limited space. It lets customers see all the products available on the Innisfree Tmall flagship store, not just those on display at the brick-and-mortar location.
• AR Interactive Photo Booth: Innisfree’s members can take photos through the AR interactive big screen with its brand ambassadors, popular Chinese boy band Nine Percent.
• Claw Crane: By scanning the QR code on the machine, visitors can opt to participate in Innisfree’s membership program and win three tries at grabbing a free sample

The Marriage of Two Giants

Just as Alibaba is a leading innovator in global e-commerce, Innisfree is popular for its all-natural ingredients sourced from the Korean island of Jeju. It is often touted as one of the most-creative beauty brands, one that is constantly moving the bar higher for competitors worldwide.

“This is really a case of two innovators coming together,” said Danielle Bailey, the head of APAC at the New York research firm L2. Innisfree’s ability to harness social media platforms and the popularity of Korean celebrities are reasons why it sits comfortably atop the list of the five most-searched cosmetic brands in China, she said.

Tmall’s data shows the same trends. Since opening a flagship store on Tmall in December 2013, Innisfree has drawn the most sales in the Korean beauty category on the platform for five years in a row.

Another reason for Innisfree’s success, said Bailey, is a highly trained and knowledgeable staff who offer a top-notch service when at the store. With the added New Retail technology, the shopping experience at Innisfree will be “super powered,” she added.

Currently, Innisfree has over 500 stores in China. The brand says it will further explore and collaborate with Tmall on a number of New Retail-related initiatives, including online reservations for in-store treatments, more customized services at stores and flexible online order pickups.

–Additional reporting by Jing Wang