This article was originally published as a TechRepublic cover story.

In San Francisco’s Dogpatch district, a research laboratory explores new products that tap augmented reality (AR), artificial intelligence (AI), and RFID technology. Like many Silicon Valley startups, its team develops and pitches cutting-edge solutions and customer service experiences, promising to make life easier for its consumers.

But, this is no robotics company or maker of self-driving cars. It’s Sephora, the industry-leading chain of cosmetic stores that has leveraged digital transformation to take pole position as the number one speciality beauty retailer in the world.

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“Digital and innovation have always been part of our DNA at Sephora,” said Mary Beth Laughton, Sephora’s executive vice president of omni retail. “We are very focused on our customers, and we know that her life is increasingly reliant on digital. So we know to be successful as a retailer, we’ve got to be where our clients are, and give her tools and experiences that meet her needs.”

While other cosmetic companies rely heavily on department store sales, Sephora offers customers a number of tech options that allow them to personalize their shopping experience by trying on makeup virtually using AR, matching their skin tone to a foundation with AI, and sampling a fragrance via a touchscreen and scented air.

Further, in Sephora’s Innovation Lab, launched in 2015, a team of executives hired from the marketing, product development, and technology industries…