As retailers seek to compete with Amazon, many have made digital part of the in-store experience. Beauty brands like Birchbox and Sephora have enhanced their retail stores with digital screens and “Beauty Workshops.” Most recently, NYX announced plans for five digital stores in California by the end of 2016.
Even more than their predecessors, the NYX stores revolve around digital. When a customer scans an item, a screen attached to the shelf display comes up with associated user-generated content, as well as price and reviews. A digital content wall showcases makeup trends and featured products, while vlogger videos are displayed at the “Beauty Bar”.
In many ways, the new stores reflect a departure from the brand’s minimalist digital strategy. L’Oréal’s Jean-Paul Agon once singled out NYX as one of the brands that “grew the most” in 2014 by maintaining low investments in promotion and advertising. For example, NYX pays for a miniscule amount of keywords compared with L’Oréal Paris, but achieves significantly higher organic visibility.
NYX follows a similar strategy when it comes to social media. On Instagram, for instance, the brand accounts for 7% of interactions with Beauty brands in L2’s Digital IQ Index: Beauty, despite accounting for a far smaller percentage of posts.
If NYX plans to boost digital spending, stores may be the best investment the brand can make. Brick-and-mortar stores bolster brand equity, site traffic, and financial returns, according to L2’s Intelligence Report: Death of Pureplay Retail. Even e-tailers are finding that digitally enhanced stores hold key advantages over pureplay e-commerce. By establishing the new stores, NYX is making a bold statement about the future of retail.