QuickTake: Sephora to go contactless at POS with FreedomPay

Global cosmetic retail giant Sephora is going contactless at point-of-sale across its 500+ stores in the Americas. Powered by FreedomPay, a white-label e-commerce technology supplier, the brand is creating customizable and tailored experiences at the checkout counter.

Following the integration, Sephora customers will have a variety of contactless payment options through digital wallets like Apple Pay, Google Pay, and Samsung Pay. FreedomPay’s technology also offers flexibility and optionality for enterprises operating across borders.

“Now more than ever, it is critical for us at Sephora to be able to adapt to the quickly changing retail environment and that’s especially important at the point of sale,” said Sree Sreedhararaj, CTO at Sephora. “Our clients desire a seamless experience in every step of the shopping journey, and our partnership with FreedomPay allows us to maximize efficiencies and capabilities at checkout.”

Pennsylvania-based FreedomPay’s cloud-based Commerce Platform was developed for merchants and serves multiple industries like retail, gaming, hospitality, and healthcare. In a unified platform, enterprises are offered solutions that aid a variety of businesses needs, like data security, identity verification, payment rails, loyalty programs, and advertising. The platform is complemented by a suite of business analytics, which help partner firms make decisions driven by data they have collected. 

FreedomPay’s complete set of offerings is a three-step solution. The three steps go like this: demand generation, customer experience, and business intelligence. Its mission is straightforward, they want to help companies revamp their customer experience, helping them navigate the increasingly technical and complex global commerce environment, with data-driven customer-centered solutions.

“This is what Next Level Commerce is about: enabling our merchants to offer their customers a frictionless payment experience, enhanced by speed, security, and personalization at every touchpoint,” a spokesperson for FreedomPay told Tearsheet.

FreedomPay helps generate demand by collecting user data over time and building individual customer personas based on multiple profiles and attributes that reflect their specific behavior and preferences. Once an identity is established, the platform uses features like targeted incentives and rewards to motivate customer action. This is also reflected in the content and advertisement a customer is shown, where they are offered products they’re likeliest to consume when they’re likeliest to purchase them. Through the platform, Sephora will be able to recognize individual customers, which in turn will enable it to present them with targeted messaging and incentives to drive customer engagement and stickiness. 

On the business intelligence side, Sephora will be able to manage commerce operations in one place. FreedomPay’s platform uses Microsoft Azure’s AI and ML capabilities. The firm provides data warehousing services, where firms can store the large amount of data derived from customer engagement, and an in-house compliance team of experts, to help companies manage the legal aspect of handling such data.

FreedomPay believes it can bring value to Sephora’s customers by giving them more control over how they wish to perform a transaction, and what payment vehicle they wish to use — whether by contactless card, or digital wallet. In addition, the system can serve users customized loyalty rewards and discounts.

“Sephora is a household name and we’re excited to count them as a client,” the spokesperson said. “We eliminate the friction that can come with checkout. Instead, we let the customer decides how they want to pay.”

Sephora sees this integration as a logical step driven by customer demand. Over the years, the retailer reports witnessing an increase in the adoption of mobile point of sale systems among its clients, especially as they interact with the retailer’s Beauty Advisors.

In recent months, Sephora has been sort of playing catch up with today’s technological advancements. Sephora has recently undertaken digitization initiatives across multiple facets of its business, including delivery and inventory management.

“As we look ahead, the payments space continues to gain significant momentum in most modern digitally native instruments, such as stable coins and cryptocurrency. What we’ve learned at Sephora, especially in the last two years, is the importance of listening to your clients. We will continue to explore new ways to keep our clients engaged, and equally as important, disrupt and innovate in tech,” Sreedhararaj told Tearsheet.

In March 2022, Sephora entered into a partnership with Target-owned Shipt to bring its customers same-day delivery. Following the partnership, Sephora’s full range of beauty and wellness products could be delivered to Shipt customers in as soon as an hour, according to the firm. And in October 2021, Sephora implemented Relex Solutions, aiming to improve its demand forecasting and automated replenishment. In addition, Sephora will be able to upgrade its management of promotions, slow-moving products, new product introductions, and product ramp-downs using Relex’s technology.

Sephora also announced it will be re-introducing its shopping advisory tool called Live Beauty Help, formerly known as Home Chat, which connects customers with real human experts. The product connects customers directly with a live beauty advisor, who will be an expert in Sephora’s categories, product assortment, and application, and help shoppers find the right products for their needs.