Although consumers find beauty stores less and less attractive (less than 1 out of 4 French women go inside a selective beauty store), Sephora has never performed so well. Driving growth at luxury house LVMH, its parent company, it is the 1st cosmetics seller worldwide (Bloomberg Business) and the 10th best retail brand in Europe, after giants such as H&M, Ikea and Zara (Interbrand 2014). With over 15000 different products in 1780 locations and 29 countries, a strong e-commerce platform (mobile sales: +100% per year) and a successful app (21st on the App Store’s ranking of shopping apps – USA), Sephora has been a disruptor in selective beauty retailing, integrating online and offline.
While many retailers have difficulties with social media and digital in general, how has a retailer in a segment in struggle reached this position?
A strong digital identity.
“Our penetration of digital to physical retail sales is double that of the prestige beauty industry” – Bridget Dolan, VP of Sephora Innovation Labs.
Meeting with success at first thanks to its network of stores, Sephora has moved over the years to make digital as important as the physical products. Through two major steps, it has changed its core identity.
The in-depth internal reorganization of the company: an essential move to take digital seriously.
One of the key drivers to Sephora’s digital success has certainly to be found in the organization of its marketing and digital departments. As early as 2007, and while most companies still struggle to do it today, Sephora has created a single position bringing together its CMO and its CDO. Although this has required a significant shift in their own structure and way of thinking, they have put in huge efforts to make marketing and digital go hand in hand, because that’s what the consumer expects from his brand experience. Contrary to many companies, it has also created an internal digital development team and brought web-development in-house. Thanks to this, they have strict power over their digital strategy and have been able to become a serious digital player.
A strong emphasis on digital innovation.
Being ahead of trends and technology has always been Sephora’s strong intention. As early as 1998, it launched its first website, being then one of the early players in e-commerce. It was also one of the first to develop a mobile site. In this same perspective, the group has launched the Sephora Innovation Lab, in San Francisco, last year. Getting closer from the tech scene to develop strategic alliances (quite like beauty giant L’Oréal), the innovation lab is working on how consumers will shop in five years from now. Projects such as augmented reality, pocket contour and Sephora Flash have been for instance developed.
Key take-away: give your company the means to achieve its goals. If it wants to incorporate digital, empower your teams at every level and change the processes. Imbue the culture of digital and bring the core functions in-house.
Every customer is treated in a unique and hyper-personalized way.
“We’re completely focused on making shopping more efficient, intelligent and fun for our clients.” Julie Bornstein, CMO and CDO of Sephora.
Sephora has developed its presence online and offline to be involved in every step of the consumer’s journey. It has taken action to personalize their customers’ experiences based on demographic and behavioral indicators. Because of the quality of services it has developed, it has managed to access personal data, people being less reluctant to grant permission as they directly benefit from it, through a well-adequate service. If the loyalty program, Beauty Insider, constitutes the beauty ID of the consumer, the Sephora To Go app is it’s everyday companion, providing him advice, coupons, reminders, historic of purchase, etc. In stores, the Ipads enable both the consumer and sales people, who can recommend suitable products with deeper relevance.
Last in is the Sephora + Pantone Color IQ. Sephora counts more than 110 foundations colors, and it takes women about seven tries to find the right foundation. The Sephora + Pantone Color IQ identifies the perfect color for every skin and then recommends first a great foundation concealer and also complementary products such as lipsticks and more. This is a huge gain of time and relevance, which makes consumers want to stick to Sephora.
Key take-away: Deep understanding of the consumers to bring them relevant digital innovation that will make them feel taken care of in a unique way.
A leader in social commerce.
Sephora has also quite early understood the power of social media. It has already developed the tools to be both very active online and have its consumers very active as well, a key strength as social commerce is on the rise.
Thanks to its platform BeautyTalk, members can ask questions to other members and experts, find tutorials videos and publish posts, advice, etc. They interact with peers who have the same interests as them. Members, depending on how many questions they will ask and answer, will get different status going from Scene Queen and Beauty Resident to Hall of Famer and more. They gain social recognition and are in this way valued. The brand, involved in the platform as a moderator, has the key role of not moderating too much in order not to kill the community, which relies on trust and members’ motivation. The hierarchy between members triggers a kind of co-governance and members become actors of the brand, who can make the design, the architecture and the content of the platform evolve.
If Facebook is a critical early-warning system for the company, Pinterest is its platform of choice and also the one that’s the most useful for its development. Pinterest followers spend 15 times more than Facebook fans, as “when you’re in the Pinterest mindset, you’re actually interested in acquiring items. » Julie Bornstein, CMO and CDO of Sephora. Sephora has since then embraces Pinterest power. On their website first, they have incorporated a “Pin” button. Second, they have created campaigns such as the Sephora Color Wash Competition. Users are encouraged to create a board titled Sephora Color Wash in the Hair & Beauty category and pin the competition page on their board as well as 5 images featuring their favorite color for a chance to win one of the ten $250 gift cards.
> Key take-away: Encourage the consumer to get involved with the brand, especially at a time when the support of a network of online peers who indirectly assist marketing though their opinion on products and services matters so much. Mix of social and financial rewards to engage the consumer.
« The minute we stop looking for the next consumer touch point is the minute we become like those who said “mobile shopping will never exist”. » Julie Bornstein, CMO and CDO of Sephora.