Sephora: Bringing Beauty to the People

Sephora, frequently lauded for its digital innovation in retail, has found a way to not only participate in the beauty industry’s digital revolution, but to push the envelope through various technological initiatives, both in stores and online. This is manifested in the retailer’s approach to marketing and internal organization, ultimately resulting in a seamlessly integrated online and offline shopping experience for the consumer.

Context

There is more beauty content online than ever before, leading to an extremely informed generation of shoppers. Their purchasing decisions are 1) extremely responsive to the type of visual media they see on social platforms like Instagram and Youtube, and 2) often made long before they step into a store. In 2015, for example, there were 45.3 billion total beauty video views on Youtube [1]. These videos often show young women, referred to as “beauty gurus” in the parlance of the internet, candidly reviewing and trying on products and brands. One such guru, Jaclyn Hill, collaborated with beauty brand Becca to create a highlighter – one that generated an estimated $20 million in sales during the second half of 2015 and was the biggest single-day seller in sephora.com’s history [2]. Researchers found that 54% of women say branded visual content makes them feel interested in a product, and that 58% of in-store shoppers would rather reach for their smart phones for a quick check on a product’s reputation or price comparison rather than ask the salesperson [3], [4].

Marketing

In response to these changes, Sephora’s marketing strategy has fully embraced the types of digital media that are already prevalent online. Sephora’s Youtube channel has 690,000 subscribers and produces content that’s very familiar to the average Youtube beauty video consumer [5]. Instead of glossy, professional-looking content, it features personable store employees against a simple white background who give useful advice directly to the camera – all while shilling their favorite products (example: this video, with over one million views). By producing content that’s similar to what its customers regularly consume, Sephora gains credibility, trust, and mindshare.

Internal Organization and Investment

Sephora has been able to maintain its impressive digital dominance in retail in part because the company has made digital a core component of its internal organization and strategy. Julie Bornstein, a former Sephora executive, held both the CMO and CDO (Chief Digital Officer) positions. In her own words, “By merging teams, we make the most of our investments across all channels and do things more efficiently, more powerfully. We also move faster — which, in this day and age, is what makes all the difference. I firmly believe that this will be the way of the future. Marketing and digital must be hand-in-hand” [6].

Sephora also brought web development in-house, allowing it greater control and flexibility to adjust its online presence to emerging trends. As a result, it was one of the first retailers to develop a mobile site, which has seen +100% growth in mobile sales each year for 3 years running [6].

Integration of Online and Offline Customer Experience

Sephora has now moved on to the next phase of innovation: seamlessly merging the online and offline experiences of the typical beauty consumer. For example, Sephora is using bluetooth Beacon technology to push personalized messages to shoppers when they enter a brick and mortar store [7]. Its app also enables customers to scan physical displays in stores with their smartphones in order to view content online, such as product reviews and tutorials [8]. Finally, Sephora has begun to digitize personalized recommendations through its Pocket Contour app, which allows a customer to upload images of her own face and virtually try on products while receiving advice tailored to her face shape [7]. Each of these innovations demonstrates a deep understanding of customer desires and an ability to adapt quickly to route customers’ changing behaviors through Sephora-owned digital properties.

What’s Next?

Who: Appealing to Diverse Customers

Women of color have historically been underrepresented in the beauty industry’s marketing and product development. These women often resort to specialized “ethnic” aisles or alternate brands as the shade ranges offered by mainstream brands rarely serve this market. With the increased democratization of beauty content and knowledge, Sephora has a rare opportunity to attract and retain a whole new set of customers through more diversity in its digital content.

Where: New, Unfiltered Channels

While Youtube and Instagram are certainly more accessible than the magazine or television ads of the past, they still require a level of filtering and editing that serves to show beauty products in a positive light. In contrast, emerging digital media like Snapchat, Periscope, or Facebook Live embrace spontaneity and unfiltered, real-time imagery. Sephora should capitalize on these platforms to further promote the authenticity of the beauty claims of the many products it carries.

What: Augmented Reality

Though “Pocket Contouring” is a start, there is much more opportunity in the realm of augmented reality that could allow Sephora’s customers to try on products and shades before they ever step foot in a store. (Word Count: 817)

Sources:

  1. Beauty on YouTube 2015 | . 2016. Beauty on YouTube 2015 | . [ONLINE] Available at: http://www.pixability.com/industry-studies/new-beauty/. [Accessed 18 November 2016].
  2. WWD. 2016. Social Media in the Beauty Landscape – WWD. [ONLINE] Available at: http://wwd.com/beauty-industry-news/beauty-features/beauty-industry-social-media-10347599/. [Accessed 18 November 2016].
  3. Ann D’Adamo. 2016. Beauty Trends 2016 | WMI. [ONLINE] Available at: http://www.womensmarketing.com/blog/2015/12/beauty-trends-2016/. [Accessed 18 November 2016].
  4. Beth Shapouri. 2016. The Way We Buy Beauty Now – Racked. [ONLINE] Available at: http://www.racked.com/2016/5/26/11674106/buying-beauty-sephora-department. [Accessed 18 November 2016].
  5. YouTube. 2016. Sephora – YouTube. [ONLINE] Available at: https://www.youtube.com/user/sephora. [Accessed 18 November 2016].
  6. Harvard Business Review. 2016. How Sephora Reorganized to Become a More Digital Brand. [ONLINE] Available at: https://hbr.org/2014/06/how-sephora-reorganized-to-become-a-more-digital-brand. [Accessed 18 November 2016].
  7. Forbes Welcome. 2016. Forbes Welcome. [ONLINE] Available at: http://www.forbes.com/sites/barbarathau/2015/03/06/sephora-grooms-digital-leaders-with-innovation-lab-debuts-mobile-experiences/#344db384553e. [Accessed 18 November 2016].
  8. Hilary Milnes. 2016. How Sephora blended a stand-out beauty video strategy – Digiday. [ONLINE] Available at: http://digiday.com/brands/sephora-blended-stand-beauty-video-strategy/. [Accessed 18 November 2016].

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7 thoughts on “Sephora: Bringing Beauty to the People

  1. Thanks Ldubs. This is a cool article. Really interesting to see how the consumer is changing. I think it really highlights however, the reduced importance of the sales associate and the in-store, in-person interaction. I 100% agree with your article that customers likely prefer looking on their phone for a review rather than having to speak to an associate but it makes me wonder if physical brick-and-mortar stores will be a worthwhile investment in the next few years.

    I like your recommendation of embracing Snapchat in Sephora’s digital strategy. I’ve seen a few make-up tutorial articles / videos that are based on Snapchat filters (see below). I think Sephora could sponsor this kind of content and use it to lead customers to purchase products that would help them get those looks. Could be a good partnership!

    http://www.popsugar.com/beauty/Snapchat-Filter-Makeup-Tutorials-42274787#photo-42274787

  2. Interesting post, thanks Ldubs. I second Anisa’s comment on the future ROI of brick-and-mortar stores for Sephora. Sephora’s generous return policy makes it easy for people to order products, try them at home, and return them if they’re unhappy. Many beauty/skincare brands that only exist online offer sample sizes so you can try different colors at home without wastage. And with the digitization of more and more of the Sephora experience, from in-house and fan-made tutorials to the Pocket Conturing app, I’m skeptical that Sephora will need as many retail stores as it has, though I do appreciate the show-rooming function of retail stores.

    You mentioned that with augmented reality, there will be more opportunities for people to try products at home. L’oreal created an app called Makeup Genius (https://itunes.apple.com/us/app/id871897775?mt=8) that let’s you do just that. But what about feeling the textures, quality, smells, of the products? While that’s where brick-and-mortar can come in, I wonder if video chatting with a Sephora specialist plus augmented reality and “4D” technology will ever be able to wholly replace that experience.

  3. Ldubs, you talked about how Sephora supports the offline shopping experience with online tools such as the push-notifications and the Pocket contour app. I am now also wondering how it integrates the offline shopping experience into future online purchases?

    I assume there are a lot of hybrid shoppers that buy sometimes offline, sometimes online and, hence, there is certainly a benefit of feeding a customer’s offline purchases back into their online profile. Customers could then receive personalized recommendations based on their offline and online purchases and (like with the Amazon refill buttons) be offered to refill certain products that they purchased a while ago offline by re-ordering them in one click online.

    Is that already happening?

  4. Thanks for the insightful post. I agree that Sephora should leverage online platforms such as YouTube, Instagram, and Snapchat to expand its customer base. However, I am skeptical that applications such as the Pocket Contour app will be successful. I think makeup is such a personalized product line and requires individuals to try before they buy unless they are repeat customers and know what products they want to purchase. In order for this platform to be successful, Sephora will need to spend significant capital on photo analytics.
    I think the Augmented Reality platform will be successful and enhance the user experience if Sephora partners with popular makeup brands and artists and has videos showing the customers how best to use the product.

    http://www.prnewswire.com/news-releases/sephora-announces-innovation-lab-to-usher-in-the-future-of-retail-300046332.html

  5. you bring up a great point: the importance of merging online and offline teams. it does indeed all start from there. breaking down silos is key to ensure that the company speaks with one consistent voice. Another example of a company that operates in a similar space to Sephora and is committed to bridging channels together is Warby Parker. At Warby, the user experience team is one. That means that the same team that does the window displays of the stores, also takes care of the UX of the website. To millenials this may sound like a no-brainer (why would you want to deliver 2 different experiences, when the consumer is the same one?!?), but it is something easier said than done, as very different skill sets and background are required for a graphic designer and a visual merchandiser. To merge these two position in one is definitely the way forward.

  6. Great post! One thing I was wondering while reading this was in what way Sephora was tracking and assessing the “ROI” of investment in some of these apps and digital platforms. While the Pocket Contour app seems like a game changer, I am a little bit more skeptical of the Beacon app and people looking at their smartphones in stores to find reviews, given so many purchases seem premeditated.

    In addition, following up on Nik’s point above, I actually think the retail stores will continue to play an important role for Sephora’s business because I think it’s been an important factor in building brand equity and a loyal customer base. That said, given they’ve achieved such incredible growth to date, a successful digital presence could be the next frontier to increase their topline revenues.

  7. With the onslaught of paid online “influencers”, I do wonder if there is a crisis of credibility with online beauty(1), unless Sephora is able to get real customers to share their feedback online and get the others to like/support/validate them.
    http://firstmonday.org/ojs/index.php/fm/article/view/3731/3132

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