Tata Group is Planning to Open 20 ‘Beauty Tech’ Outlets, in talks with foreign brands

Tata Group is planning to launch at least 20 “beauty tech” stores where it will utilise virtual cosmetics kiosks and digital skin testing to entice young, affluent consumers to buy high-end cosmetic products, according to a business document and a person familiar with its strategy.

The Tata Group of India is planning to build at least 20 “beauty tech” stores where it would use virtual cosmetics kiosks and digital skin tests to persuade young, affluent clients to purchase high-end cosmetic products, according to a business document and a person familiar with the plans.

The plan sets LVMH’s Sephora and homegrown rival Nykaa against Tata for a share of the rapidly expanding $16 billion beauty and personal care sector in the second-most populated nation on earth.

Tata’s target demographic is described as “beauty enthusiasts” between the ages of 18 and 45 who love shopping Western brands like Estee Lauder’s M.A.C. and Bobbi Brown, as per the document, which names The Honest Company, Ellis Brooklyn, and Gallinee as prospective partners. The person with knowledge of the plan, who made no specific brand mentions, asserted that Tata is in talks with more than two dozen companies to provide exclusive goods to the new stores.

Tata declined to comment on the facts in the document seen by Reuters, as well as the potential beauty boutiques. Gallinee, Ellis Brooklyn, and The Honest Company personnel did not respond to requests for comment.

The store launching plans, which are currently a secret, come in the wake of Tata’s recently released Tata CLiQ Palette beauty shopping app. The company has joint venture ties with international brands like Starbucks and Zara and is already engaged in brick-and-mortar retail in India.

According to a Tata whitepaper, 70% of the items sold in the stores would be skincare and makeup. The businesses’ bright red facades will have Tata CLiQ Palette branding. According to the document, Tata intends to install technology inside the stores that would enable consumers to virtually put on a variety of lipstick hues on screens and receive digital skin analysis to determine which items might work best for them.

Despite the fact that the technology is not brand-new and is utilised by other beauty retailers across the world, this excursion into “experiential retail,” as it is known among industry insiders, is still a relatively new concept in Indian malls and high street shops.

Pankaj Renjhen, joint managing director of India’s Anarock Retail consultancy says, “Experiential retail is going to be a significant phenomenon in India since more customers would spend their free time at such businesses.” “Experiential retail helps spark impulse spending and can entice customers in the premium sector, where they are looking for things beyond price.”

However, Renjhen emphasised that “the product and the brands have to be exclusive and good – if they are not, she (the customer) would not come back.”

The Target Market is Millennials

Tata is aiming to attract relatively young and affluent customers who enjoy shopping in cosy settings and are prepared to shell out the asking price for high-end international brands as India’s economy expands and consumers return to stores following coronavirus lockdowns. In the document obtained by Reuters, Tata labels these customers “non-bargainers,” in contrast to the majority of Indians who purchase locally made, budget-friendly lipsticks and skin creams from mom-and-pop shops where asking for discounts is normal.

The Expected Hurdles

According to a person familiar with the idea, Tata will probably establish its first “beauty tech” store by the end of March. The business will then likely expand during the remainder of the current fiscal year, starting in April, and could open up to 40 stores overall.

Another person with first-hand knowledge of the conversations claims that Tata is having trouble persuading owners of upscale malls, where space is limited, to take on a new beauty retail shop where one already exists if it doesn’t offer enough exclusive products or another differentiating feature to attract new customers and increase foot traffic to the mall as a whole.

In addition to the introduction of exclusive products, Tata is focusing on in-store technology, which is referred to in the memo obtained by Reuters as a “key differentiator.”

Tata’s “skin analyzer,” a device with a mirror that can scan and analyse a customer’s skin to disclose 25 to 30 features that might aid in product selection, will be one of the technological tools available. Additionally, there will be kiosks for eye and face makeup “virtual try-ons.” One of them will have a circular stand with slots for lipsticks; when a customer raises one, a digital mirror screen in front of them will begin automatically revealing how the colour shade would appear on the face, doing away with the necessity for numerous manual try-ons before a purchase.

The person familiar with the plans added that Tata is also testing the usage of so-called geofencing technology to enable its store personnel to recognise when a client using its app enters and share the buying history and wish lists with staff to make better recommendations.