Wal-Mart Digital Makeup Trial: It’s the Inventory, Stupid

Written by Evan Schuman
May 18th, 2010

Wal-Mart this month quietly began a 10-store trial of a cosmetics system—called the Wal-Mart virtual mirror—that uses a barcode reader and a digital camera for the virtual application of makeup. What’s interesting in this 90-day trial are the ROI benefits beyond mere increased sales, such as reduced shrink (no need to throw out lipstick after a test), better availability of product and some natural social-shopping benefits via E-mail.

The Wal-Mart trial involves IBM, Sprint and EZface. It is being tested at 10 very different locations—with four units at each store—based primarily on demographics and somewhat less on connection speed. A list of the 10 locations includes each store’s distance from signal source, with all stores in strong 3G signal areas. An early list of potential stores included a 4G candidate, but it didn’t make the final cut because the chain decided to stick with the more common 3G for more reproducible results.

The tests are being done in three areas identified as rural general market (Maryville, MO; Emporia, KS; and Decatur, TX), three pegged as suburban general market (Fishkill, NY; Hamilton, OH; and Sioux Falls, SD), two considered higher income (Amherst, NH, and Pembroke Pines, FL) and two labeled empty-nesters (Payson, AZ, and Livingston, TX).

(See related Wal-Mart stories this issue: Wal-Mart: “It’s Time For Chip-And-PIN In The U.S.” and Should Wal-Mart Digital Signage Use Near-Time News, Weather, POS Data?)

The trial offers a wide range of barcoded cosmetic containers coupled with a digital camera and a screen. The customer looks into the camera and takes a picture of herself and then scans the barcodes to virtually apply various makeup products to her face. The customer is asked to remove glasses, brush hair away from her face and remove any hats before taking the photo.

After the customer’s selections are made and applied, the image is saved and E-mailed to her.

During the trial, the images are not linked to the customer, who is not identified, nor are customer E-mail addresses saved. That means there is no testing of the CRM implications, such as whether the machine causes an action (either that day or on a subsequent visit). Given that Wal-Mart doesn’t use loyalty data anyway (it seems to thoroughly detest even saying the words “two-tiered pricing”), it’s hardly a surprise.

There’s also no attempt—again, limited to this 90-day trial—to allow purchases at the point of the demo. That certainly may change if Wal-Mart ultimately decides to deploy. For the trial, the only return-on-investment information is on a store-wide basis. If cosmetics sales increase sharply at the 10 tested stores, that’s the best ROI Wal-Mart will have.

Psychologically, the chain is hoping these devices will push sales for reasons beyond efficiency. “Today, people may try one or two things (makeup) and they tend not to look at the full face,” said one official involved in the trial. “With this system, the potential exists for much stronger increased sales.”

The trial is using Sprint CDMA for data connectivity, which made it easier for Wal-Mart to do the tests. Sprint CDMA didn’t require any of the test systems to interact with the chain’s LAN, thereby bypassing questions such as “Do I want to put in a separate WiFi network in the stores?” said that official, adding “With this, all we have to worry about is power.”


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