Sephora and LVMH: Beauty Retail Excellence and Strategies

1. Nattasha Hussain Omni Retail Channeling Dr. Robert Woods

2. Table of Contents • History/Background of Sephora and LVMH • Target Market • Advertising/ Marketing Strategies • SWOT Analysis • Omni Channel Analysis • Recommendations

3. History/Background • Sephora is a well-known, luxury beauty store with approximately 2,300 stores in 33 countries. • Sephora was founded in Paris, France in 1970 by Dominique Mandonnaud. The idea was to have an open-sell environment with selected brands and to provide a wide assortment of products carefully chosen within indie brands, classics and their very own Sephora Collection • Moet Hennessey Louis Vuitton, known as LVMH bought Sephora in 1997. LVMH is the French parent company of Sephora. • They carry items including skin care, cosmetics, body, fragrance, nail colors and hair care.

4. Target Market • Sephora's general target market is higher-income women, but the stores are cleverly designed to break down the target market into smaller segments. Sephora tries to appeal to women who value quality and are willing to pay for it • The company tries to cater to everybody no matter the age, race or gender. They keep an open and welcoming beauty community for everyone to enjoy • Certain sections of each store are decorated more brightly to appeal to tweens and teenagers, while other areas are more sedately decorated to appeal to men • Sephora's products are in the medium to high price range, which limits their target market, but it attracts consumers who do not want to waste their money on cheap cosmetics

5. Advertising/Marketing Strategy • Sephora approaches their customers by giving them the best in-store and online experience • The brand researched how their customers like to shop for products as they observed and analyzed what their customers do inside the store. Not only do they run to their phones for further information they try to find cheaper alternatives of products that Sephora carries. • Sephora developed a mobile app • Color IQ/ Skin Care IQ • SEPHORiA

6. SWOT Analysis • Strengths • Sephora has a cohesive brand image that they send to all their marketing channels which they involve their online and social media platforms • Sephora has unlike any other beauty store like their competitor Ulta, is the Color and Skin IQ systems. This helps customers identify their needs and matches within the products that are offered in the store • Weaknesses • Customers are bound to spend about $40-$60 dollars on average a day. Their average purchase would include one to two items because they prices are so high • Customers are not driven to purchase from their private label as much as they go in stores and online for the other brands and companies that are being carried • Sephora doesn’t market or advertise their private label

7. SWOT Analysis Opportunities • The effects of social media and beauty influencers created a massive beauty empire • The growth for potential cosmetics is an opportunity that Sephora has an advantage of by partnering up and selling products that are hyped up on • Women and men have become conscious about how they look especially in today with social media’s impact on ones life. Threats • Sephora’s threats include their biggest competitor, Ulta Beauty • Ulta Beauty carries similar brands as Sephora • They provide low-end and high-end hair, makeup, nail, skincare and fragrances. They have salon’s in every store and a Benefit cosmetics brow bar

8. Omni Channel Analysis • Sephora reaches out to their customers through ads, direct marketing and the overall instore experience • Sephora understands the power of technology, so they infuse their brick and mortar locations with things like the Color IQ, Skin IQ and Virtual Artist, which creates a unique, on-demand experience • The in-store experience is heavily supported by technology. Make-up artists use iPads and other mobile devices with clients to showcase hundreds of different shades, and products • Sephora wants to stay engaged with their customers, their app is where people are able to get a hold of new products, tutorials and keep up with the latest trends • They managed to have connected with their customers on a deeper level though these personalized mobile app experiences, which creates brand loyalty

9. Recommendations • Sephora is great in managing the business because their customers are taking advantage of all the experiences that they have to offer • Sephora doesn’t always treat their employees right. According to various former employees, they express the lack of attention catered to them • Hectic working environment • Multiple former employees also complained about not getting gratis which is where they are supposed to get free products to wear while they work in order to test and better aid the knowledge of their customers • Overall the company to customer relationship is solid, Sephora should work on the experience of their employees with the company