Sephora is a Gallic trade name and the largest cosmetics retailer in the world. In 1969, Dominique Mandonnaud built the first Sephora shop in Gallic Limoges. He chose an open-sell environment to sell his cosmetics.
In his shop, customers could experience a completely different shopping journey, including exploring and trying out different cosmetics in a free-sell format. His unique merchandising model was very popular at that time, and he subsequently opened a couple of chain stores. Until now, Sephora still retains this useful and comfortable merchandising model in its stores.
In 1994, the cosmetics shop adopted the name “Sephora”. “Sephora” is derived from the Greek word “sephos”, which means beauty, and “Zipporah”, which was the name of Moses’ wife in the Bible. This name is perfectly fitting for the store’s mission statement. In 1997, Sephora became a part of the French luxury conglomerate LVMH (Louis Vuitton and Moet Hennessy). Currently, Sephora has around 1,300 stores in 27 countries worldwide. It provides different types of products ranging from skincare goods, fragrances, to hair care and makeup items.
As a beauty industry leader, Sephora’s mission is to deliver superior products, help people look and feel beautiful, provide value, and make a significant difference in the beauty industry. To achieve this mission, Sephora employs the 4Ps marketing strategy.
Regarding merchandise, Sephora chooses to sell multiple brands and covers different types of products, such as makeup, skincare, fragrances, bath/body, hair, tools/accessories. They also sell men’s products. These brands include Sephora’s own brand—Sephora Collection—and other brands from different companies worldwide, such as DIOR, YSL, BENEFIT, and ORIGINS, among others.
Offering multiple brands enables Sephora to cater to different customers’ needs. Additionally, Sephora has a unique product offering, which is beauty and stylish services. For example, customers can receive professional makeup, hairstyling, and nail manicure and pedicure services in Sephora’s stores. Furthermore, customers can stay updated on the latest trends in the beauty industry, such as new nail and makeup trends.
By utilizing these services, Sephora has more opportunities to reduce competition in the beauty market. Particular shopping experience is another successful aspect of Sephora. Sephora provides a range of products for clients to freely browse, including makeup, skincare, nail care, and fragrances.
This is a smart marketing approach that can help Sephora attract more potential clients, especially for beauty products that customers need to touch and experience firsthand. Sometimes, customers may visit the store just to browse, but if they try some products, they may end up purchasing them.
Over time, this can bring more and more customers back to the store for repeat purchases. Furthermore, Sephora’s fresh and unique shopping experiences not only create value for the company but also provide many benefits for the clients.
Sephora uses multiple channels to operate its shops. The first channel is physical stores, which are generally located in shopping malls or metropolitan areas with high foot traffic. For example, Sephora’s physical store on Fifth Avenue in Manhattan, NY, attracts a large number of tourists.
A study about the first Sephora shop in downtown Manhattan reported that it generated $10 million in sales in its first year of operation. In 2006, Sephora partnered with JC Penney and operated mini-stores in certain locations of JC Penney. By 2010, Sephora had opened 161 store-in-store locations that generated $1 billion in sales.
The second channel is the online shop. In 1999, Sephora built its first online beauty website, sephora.com, which provides comprehensive beauty products and customer feedback. When customers search for products online, they can also get information about the products from other users. This is a useful and practical way to help customers choose products.
The third channel is the Sephora app for iPhone and iPad. As iPhone and iPad are so popular in our lives, Sephora also provides a Sephora application for customers to download on their iPhone and iPad. Customers can use the application to shop for beauty products, know about the latest trends, and check their orders anytime and anywhere.
Presently, customers can also download their VIB member card in their iPhone bankbook, so when they go to Sephora, they only need to show the member card through their phone, making it very convenient.
The fourth channel is the use of automatic vending machines. A study showed that automatic vending machines sold Sephora’s top 50 products from 2006 to 2010. Currently, their effectiveness is being assessed.
Promotion
Sephora uses Twitter, Facebook, bi-weekly emails, and their website to gain publicity and influence customer’s minds. Facebook and Twitter are two very popular social networks. On Facebook, there are 4,531,995 likes for Sephora, and 75,981 people talking about it. In addition, Sephora has 290,000 followers on Twitter.
All of this information is available on the two networks’ websites. Sephora updates their sites with daily tips, new products, trendy products, and other beauty information every day. Furthermore, people can provide feedback and comments about Sephora’s products.
Customers can use this helpful information to learn more about Sephora and build more loyalty for this company. On another note, Sephora uses bi-weekly email to promote their products. These emails include information about new products, in-store special events, sale announcements, VIB member events, and special vouchers. When I receive these emails from Sephora, I visit their website and inform my friends about special events. The Beauty Insider Loyalty program is another promotional feature for Sephora.
This membership card is free for all clients, and clients can receive vouchers, discounts, and points after spending a certain amount of money at Sephora. For example, clients can receive a free deluxe-size product after spending $100 at Sephora. Customers can also upgrade to the Very Important Beauty Inside card after reaching the $350 benchmark.
I am a VIB member for Sephora, and I can earn points for every purchase. When my points reach a certain amount, I can receive free products. Additionally, I received a 20% off discount during Thanksgiving; it was truly worth shopping at Sephora during that time. Furthermore, Sephora has some promotions on their online shop. For instance, when customers’ orders exceed $50, they can receive free shipping; clients can also receive free returns. Sometimes, clients can also receive free samples with every order. All of these effective promotions increase Sephora’s presence for clients.
Price
Sephora does not only focus on high-end clients who can buy expensive beauty products such as Chanel, Dior, or YSL. It also targets clients at other price points who can buy moderate or cheaper products. I will use mascara as an example. If you choose Sephora’s collection mascara, it only costs $12, but if you choose YSL’s luxurious mascara, it costs $30.
Alternatively, you can choose some moderately priced mascara like MAKE UP FOR EVER that costs $23. Various price points can attract different clients. Moreover, when clients shop at Sephora, they can compare the same products at different prices, which is valuable for knowing which mascara they should purchase.
Although high-priced products are of high quality, clients do not always need to spend more money if they can use lower-priced products to meet their needs. In addition, Sephora provides mini bundles of some products for clients who are traveling or using them temporarily.
The price is reduced to half of the original price or more. For example, Benefit mascara has two types. The mini mascara costs $10, and the original mascara costs $23. If clients want to travel or want some portable mascara, it is a better choice. Therefore, different price ranges help clients make intelligent buying decisions.
SWOT ANALYSIS
Strengths:
The first strength of Sephora is its multiple trade names and merchandise options. Customers can choose from a wide range of products when they visit Sephora stores, which is very convenient and helps clients save time. Moreover, having multiple trade names and price options can attract clients from different income levels.
Additionally, Sephora’s private label brand, Sephora Collection, is another strength. This collection includes high-quality products such as makeup, skincare, fragrance, tools/accessories, and hair care, with affordable prices for most clients. According to the data, Sephora Collection’s sales accounted for 10 percent of the total sales.
The second strength of Sephora is its unique self and free service in the shop. In Sephora stores, customers can enjoy a comfortable buying experience. For example, they can test any products and compare them by themselves, and then choose what they really want.
This experience is unique to Sephora because in other stores, customers have to ask for assistance from the staff before trying out any products. In fact, Sephora uses this special self and free service to ease customers’ shopping pressure because sometimes customers feel pressured if they do not buy the products after the sales representative assists them in trying out the products in most other stores. If the company wants to gain more loyal customers, providing them with comfortable and relaxed shopping experiences is necessary.
Moreover, if clients need some help or suggestions about any beauty products or gifts for their friends or families, there are some experts who can give them useful suggestions and help them make better purchasing decisions. On the other hand, Sephora can collect customers’ shopping habits through the website and the member card. Sephora can use this information to promote specific markets and clients in order to target more effectively.
Weaknesses:
Although Sephora has plenty of strengths, some weaknesses still exist. Firstly, Sephora only uses the internet to promote their products, such as Facebook, Twitter, email, and their website, so they miss out on print advertising and television clients.
Secondly, most Sephora stores are located in metropolitan areas, so they miss out on suburban clients. In America, suburban residents make up a huge percentage of the population. If Sephora stores are only located in metropolitan areas, suburban residents will lack brand recognition for Sephora, which can limit the size of their customer base.
Opportunities:
Sephora has started to open stores in suburban areas such as the Trumbull Promenade in Connecticut, which is an opportunity to increase their suburban client base. Nowadays, green and organic products have become a trend in most areas, and plenty of companies have started to produce and sell green and organic products.
Sephora can also stock some green and organic cosmetic products in their stores. Moreover, Sephora continues to open 30 stores per year in different countries, which will bring a lot of international business. For instance, Sephora has already operated 121 stores in China.
Additionally, Sephora started selling men’s merchandise, which is another possible market. According to research data, four out of ten men use face wash and skin lotion. Furthermore, some men started using decorative products in their daily life. In addition, changing demographics are a new opportunity for Sephora.
A study indicated that from 2005 to 2015, the number of women aged 18 and over will increase, and this is a potential market for Sephora. Women aged between 45 and 64 are also interested in Sephora products to make them look good. In America, the minority population has increased, which is another opportunity for Sephora. Asians, American Indians, African Americans, and Hispanics have strong purchasing power. Collaborating with other companies such as JC Penney is also a chance to increase brand recognition and attract new customers.
Threats:
The first threat is competition. There are other cosmetics retailers that sell the same products, such as Nordstrom, Meier & Frank, Victoria’s Secret, and Bath & Body Works/Body Shop. Customers can buy the same products in any of these shops. Personal selling companies like Avon and Mary Kay can also be considered a threat to Sephora.
Promotion competition is another threat for Sephora. Different retailers take various promotions to appeal to customers, such as discounts, coupons, and some free samples. If customers want to buy products provided by these retailers, they might choose one retailer that has more beneficial promotion for them. So Sephora will face some challenges under these circumstances.
Decision and recommendation:
Overall, Sephora has performed well in most areas like products, place, promotion, and price, but there are still familiar retailers, so the competition cannot be alleviated. In order to confront the competition, Sephora has found some methods for resolving issues, such as partnering with other companies and utilizing different promotions.
Additionally, there are some ideas for Sephora to discover innovative approaches in service that might bring new opportunities for improvement.
First, Sephora can collaborate with some designers to design the package of its private label cosmetics collection. Customers are always attracted to new and stylish items. Second, Sephora can make an innovation on its packaging bag.
For example, they can use four seasons’ themes and certain celebrity days to decorate their packaging bag. Every season and celebrity day use special bags that can display a unique time. After shopping at Sephora, each customer carries the particular bags while walking around on the street or mall, and it must catch people’s attention.
Through this approach, Sephora can also increase people’s brand recognition. In another part, Sephora can change the paper bag to a recycling bag, which is an environmentally friendly product. Actually, Sephora will give free recycling bags in certain times at certain shops, and they should extend it to each shop so people can recycle the bag. It is truly good for the environment.
Mentions
- Hypertext Transfer Protocol: //baike.baidu.com/view/401553.htm
- Hypertext Transfer Protocol: //prezi.com/f4vhjdafelia/sephora/
- Hypertext Transfer Protocol: //www.sephora.com
- “Sephora’s Strategic Revolution” by Wilson, Marianne. January 2000. Hypertext Transfer Protocol: //search.proquest.com.libproxy.Bridgeport.edu/abicomplete/docview/222062776/13AD8B9399C25A96628/18?accountid=26484
- J.C. Penney Co Inc (Holding Co). Hypertext Transfer Protocol: //finapps.forbes.com/finapps/BuyHoldSellAnalysis.make?tkr=JCP
- “Sephora To Install Beauty Vending Machines.” May 25, 2011. Hypertext Transfer Protocol: //www.huffingtonpost.com/2009/12/04/sephora-to-install-beauty_n_380346.html
- Private Label Beauty-US-May 2011. Hypertext Transfer Protocol: //academic.mintel.com/display/542902/
- The Beauty and Personal Care Consumer-US-January 2010. Hypertext Transfer Protocol: //academic.mintel.com/display/482424/
