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  • 1. Angelique Holguin Cecilia Serrano Elizabeth George Emily Wiley Lauren Fletcher 3750 Spring 2011
  • 2. Introduction In the past the only place to buy high-end make up was in a department store. Specialtystores that only sold make-up did not exist until the 90’s. Sephora stores were a brand new idea,never had a store been designated exclusively for make-up for multiple brands. This conceptspread like wild fire and has become one of the most popular stores for make-up. Understanding Your Retailer The Sephora concept began 42 years ago under the name Shop 8. Founded in 1969 inFrance by Dominique Mandonnaud, Sephora first started out as a new and innovative concept fora beauty retail store. The idea of Sephora was meant to offer the consumers a more “hands on”experience while shopping for cosmetics. In 1993 the name changed from Shop 8 to Sephora, itcame to be through a blending of two ancient concepts of beauty. Mandonnaud chose the nameof Moses’ beautiful wife Zipporah and then proceeded to merge it with the Greek word sephos,meaning “pretty”. The end result: Sephora. In December of 2009, it was reported that Sephora had 986 stores in 23 differentcountries and over 250 stores located across North America. Sephora.com was launched in theUnited States in 1999 offering more than 13,000 products and more than 200 brands. In 2006,the relationship between Sephora and JCPenny began. Today, across the country, there are 155Sephora stores located in the middle of JCPenny stores. Sephora offers products in categoriesranging from makeup to bath and body. Looking at their webpage, categories include makeup,skincare, fragrance, bath and body, hair, tools and accessories, men, and natural. Sephora alsooffers over 200 brands, including popular beauty brands such as Nars, Urban Decay, Stila, andtheir exclusive Sephora Collection (sephora.com, 2011).
  • 3. Sephora’s perception in the marketplace is that they are seen as a higher-end beauty retailstore offering designer products alongside expert and knowledgeable advice from employees inthe areas of beauty. Sephora University was created to educate product consultants on all beautyproducts. This expertise aspect that comes along with the brand name Sephora brings addedvalue to the products being offered for the consumer. Since many products made available toconsumers are more expensive than other beauty brands, this encourages the consumer to engagein aspirational shopping which is related to reaching one’s ideal self. Their image can also beperceived as being more fashion forward compared to their competitors. Many products that areadvertised are being used in fashion shows, which support the notion that Sephora can beconsidered a trendy and even luxury beauty retailer. ULTA is pinpointed as Sephora’s main competitor among in their market. ULTA waschosen and analyzed as their main competitor because the beauty retailer offers a differentassortment of products, half of the make-up that ULTA carries is drug store make-up. The onestop shop beauty retailer also offers hair salons located in all ULTA stores. On their website,they describe themselves as a retailer that “provides one-stop shopping”, since all ULTA storesoffer a salon, skin care spa and make-up of various price points it gives the consumers autilitarian benefit of getting everything on their beauty list done in one place. Sephora’s main advantage compared to ULTA is their global exposure. As stated before,Sephora has stores located in 23 different countries and is still expanding. ULTA only has 389operating stores throughout 40 states. Another advantage that Sephora has over ULTA is thatthey offer exclusivity on some of their higher-end products. Exclusivity carries the notion thatprestige comes along when shopping at a certain retailer. However, the fact that Sephora wants
  • 4. to be considered a high-end retailer can hurt them as well. Many consumers are not willing tospend more on designer beauty products. Store Visits and Evaluations ULTA and Sephora both cater to a predominantly female clientele of all ages. Theirclientele all share a love of make-up, a need for beauty supplies, and skin care. However,Sephora’s customers have a need for more well-known designer brands such as Dior, St. Tropez,and Laura Mercier cosmetic lines, and skin care products. Sephora’s customers are not wealthierthan ULTA’s customers; rather they do not mind spending more on cosmetics. ULTA’s layout is fragrance and weekly ad specials in the front with a full service salonin the back. The store is organized so that one side is more mainstream low price point cosmeticlines such as L’Oreal and Cover Girl, as well as make-up and hair tools; the other side of thestore carries make-up that has a higher price point. The salespeople tend to have a vastknowledge of the products offered and experience with make-up application. The salesassociates are always willing to give customers their personal opinion on what they feel to be thebest product for the money. The store is clean, spacious and carries an aroma from scented ofburning candles. As the consumer walks to the back of the store she would catch the smell ofhair products from the full service salon. The signage is very basic and similar to that of big boxretailers, in that it is computer generated in black bold typing to catch their guest’s eye of thespecials being offered that week. The price points of ULTA vary from a $1.00 lip balm to a $200hair dryer. Displays in ULTA consist of tables topped with featured products or beauty tools; thestore layout is very simple compared to other retailers. Sales and promotions are offered weekly,and guests who are members of the ULTA program receive coupons and points towardspurchases.
  • 5. Sephora’s layout is different from ULTA’s; Sephora has designed their stores in a gridformat. Similar to a grocery store, Sephora has aisles of make-up products, beauty tools,fragrances, and skin care products. As a customer walks into a Sephora she will see the make-upis in the center of the store, the fragrance runs along the sides of the store, skin care is in theback, and the checkout is in the middle. Sephora was smart to design their store this way; itdraws the customer through the store winding around until she gets to the register. The gridformat keeps Sephora organized so the small stores do not have a cluttered feeling; the customermust make her way to the checkout by passing an abundance of products. Once at the checkoutthe customer is again surrounded by point of sale merchandise. The sales associates in Sephora are all trained at the Sephora University; each associate istrained in basic make-up, skin care, and perfume knowledge. After that Sephora’s employeeshave the option to become an “expert” in which ever field they want to learn more about (AboutSephora, 1999). All of the product consultants at Sephora are always more than happy to assistwhoever wants help or needs advice; the convenience of the knowledgeable consultants is thatthey offer advice based on product knowledge and usage. The consultants do not push certainbrands on to their customers. The stores play pop music that doesn’t overwhelm their guests, Sephora does notintentionally have their stores smell a particular way; rather customers spray the fragrancescausing the aromas in the store. All Sephora’s have a white tiled floor, giving the impression of aclean establishment, also throughout the store there are stations that guests may deposit trash intoafter testing their products. The signage within Sephora is small and simple; there are large images over each of theproducts displays that case the products. In the front of the stores are large hanging posters and
  • 6. window signage about certain products that the Sephora is pushing at the moment. Throughoutthe store guests can test all of the products; on occasion there are small samples that are featured. Sephora’s price points range from $10 to $350, the make-up store offers products that canfit every budget. Sephora sends out weekly emails to its members about upcoming promotionsand benefits to beauty insider card holders. Sephora members get points on every purchase andcan use those points for free products. The only sales that Sephora has are online; Sephora doesoffer free samples with certain purchases. ULTA and Sephora both utilize customer relationship management; however Sephora’sloyalty program surpasses that of ULTA. Sephora’s customer service tends to be moreknowledgeable and friendlier than ULTA’s. Also, if a customer is a member of their rewardsprogram the computer stores their information and previous purchases helping to make a hasslefree shopping experience. The employees at ULTA at times appear to be rushed, and will assistseveral customers at one time making for a more impersonal shopping experience. ULTA has amore open store layout making it easier to peruse the aisles whereas Sephora tends to havesmaller aisles and a more cramped store layout. ULTA is deficient on their assortment. They offer mostly products that can be found atany big box retailer or grocery store. Their price points tend to be higher than other retailers dueto their low turnover of products. Sephora, unlike ULTA offers certain lines that cannot be foundat some department and specialty stores. Products are not always in stock at ULTA making itfrustrating for customers who come in looking to purchase their favorite foundation or perfumecausing for lost sales to competitors. MarketingTraditional Marketing
  • 7. One of the best ways for any company to market themselves is by using celebrity endorsers and Sephora is no stranger to celebrity endorsers. Stars like Kim Kardashian and Jennifer Aniston have both launched successful fragrance lines at Sephora. Tattoo artist and reality TV star, Kat Von D has her own successful make-up and fragranceline at Sephora. With ads seen on blogs, magazines, store displays even racecars, it was almostimpossible to escape Kim Kardashian’s fragrance ad.Also, there are the traditional advertisements placedin magazines such as Vogue, Glamour and People’sStyle Watch. Just recently, Sephora by OPIcollaborated with the popular TV show Glee for a set of limited edition nail polishes with colors such as Slushied, Gleek Out and Mash Up ("Sephora by opi," 2011) . There are not very radio or television advertisements for Sephora, at least not in the United States. However, Sephora supports many charitable causes through their product purchases. Sephora supports Breast Cancer Awareness with pink themed products such as brushes, make-up palettes, compact mirrors, and Clarisonic Skincare brush. They alsosupport Canine Companions for Independence, Get One Give One Campaign for City of Hope,Fight Against Prostate Cancer and their own charity The Sephora Project. The Sephora Project is “…Our beauty-full initiative created to educate and empower women whose mission, like ours, is to make the world a more beautiful place. For each in store and or online
  • 8. purchase of special The Sephora Project items, well make a donation to Girls for Change, a national organization that empowers girls to create positive social change” ("The sephora project," 2008).Untraditional Marketing “So much of the beauty and personal care industryrelies on word-of-mouth for success. Women turn to friendsand peers to learn about trusted products. Increasingly, that viral communication is happening online in communities like MySpace, Facebook and Twitter” (Renfrow2009). Sephora utilizes the concept of Sephorauses untraditional marketing in many ways such as YouTube videos, their Facebook and Twitterpage, and Sephora’s Beauty and the Blog. Sephora’s YouTube page includes 148 videosdemonstrating make-up tutorials by Sephora’s Pro Team make-up artists, new product launches,exclusive celebrity products, and make-up trend reports. Kat Von D also has her own make-uptutorial videos using her products from Sephora. There are also many make-up enthusiasts thatcreate their own tutorial videos and use Sephora make-up exclusively. Sephora’s Facebook pagehas over 1,000,000 likes and over 142,000 followers on Twitter. Their posts include one daysales, hottest new products, product reviews, contests/sweepstakes and store events. Facebookalso has a way of giving virtual gifts to your Facebook friends in order to create buzz and virtualmarketing on the newest products. In other forms of untraditional marketing, when you purchase
  • 9. an item from Sephora.com it asks you your hair color, eye color, skin type in order to bettermatch your needs by emailing you possible suggestions that would look and work best for you.Reaching their Target Consumers Sephora is a specialty retailer with a specific target consumer, the make-up enthusiast.Their marketing efforts do not need to be as extensive as a department store or fast food chain.In fact, most of Sephora’s advertisements are not seen in billboards or commercials. Instead theirloyal consumers receive their catalogs, interact on their social media sites and frequently makein-store and online visits. Sephora understands their loyal consumers because they createdcustomer profiling databases through their loyalty cards; this helps them market individuallyrather than assume all their customers have the same needs. Sephora’s loyalty cards help indriving sales across channels and building stronger, more personalized customer relationships(neolane2007). Sephora is successful at reaching their target customer because they are able topredict purchasing behavior across multiple channels which increase loyalty and revenue percustomer (neolane2007). According to one “avid shopper of Sephora” and blogger for FashionMarketing Critic, “The use of tailoring their recommendations based on my past purchases works. They know what brands Ive been surfing on their online site, plus they also record all my in- store purchases each time I swipe my Beauty Insider card at the point-of-purchase. They have enough stats on me to figure out what skin type I have, how old I am and what brands I am a fan of. This means every time they send me something they will try to make it so that I open the email” ("Sephoras Christmas holiday," 2010).
  • 10. Through this method Sephora is able to better understand their consumers and helps them targetconsumer’s individual needs. In turn, customers enjoy receiving discounts and notifications ofitems they might like which causes them to make more frequent purchases. When consumers shop at Sephora, their purchases tend to be more hedonic. If you are inneed of basic make-up, hair or skincare products, you are more likely to purchase these items at adrugstore or a Walmart. However, Sephora’s target consumer has a different need recognitionand when they are in need of make-up, hair or skincare products they are looking for morevariety, better quality, and stylish brands. A lot of their customers are also driven to achieve theirdesired states in their need recognition by perusing the store “out of boredom or because of amotivation to engage in variety seeking” (Babin 2011 p 221). This works out as a benefit forboth the consumer and Sephora; since in reality, Sephora is an experience store. Sephorarecognizes this need and allows their consumers to test make-up eye shadows, foundations,eyeliners, fragrances, nail polishes, blushes, lipsticks, and much more. They have make-upexperts to assist you purchasing decisions or how to apply the products they sell. Sequentially,consumers feel as though they are getting expert knowledge and can feel confident about theirpurchase. This all goes along with the decision making process, that the customer recognizes aneed and gathers external research on the product. In this case, the consumer can view anadvertisement, see a mention in this month’s Glamour magazine, receive a direct email, orpossibly hear about the latest make-up trend through E! News. The consumer can then visit in-store to test out the product or go online and read product reviews that describe the reviewer’sskin type, tone and age. They are then ready to make a decision on whether or not to purchasethe item.
  • 11. Conclusion Sephora’s store design, product differentiation, and marketing efforts have led them to be one of the most successful cosmetics company around the world. Women all over the world flock to Sephora stores in order to receive their beauty knowledge and hottest beauty products. Their consumers trust their input and expertise to make the rightpurchase. Sephora makes sure they retain their loyal consumers with personalizedrecommendations, free samples, and store discounts. Competitors such as ULTA may compete inprice but not in customer service, product assortment, or with such an extensive loyalty rewardsprogram. Sephora has remained the beauty authority for many years and will continue to providewomen with glamour, confidence and luxury for decades to come. Reference ListAbout sephora. (n.d.). Retrieved from http://www.sephora.com/help/about_sephora.jhtmlAbout ULTA. (2000). Retrieved from http://www.ULTA.com/ULTA/common/about.jspBabin, B., Harries, E.G. (2011). Cb. Ohio: Cengage Leaarning.Neolane. (2007). Sephora teams with neolane and spss. Retrieved from http://www.neolane.com/usa/pdf/200709_SephoraTeamsWithNeolaneAndSPPS.pdfRenfrow, j. (2009, April 9). Beautys on the inside at sephora. Retrieved from http://www.responsemagazine.com/response-magazine/beauty039s-inside-sephora- 1358?page_id=2Sephora. (2011). Retrieved from http://www.sephora.com/help/about_sephora.jhtml?location=sephoraSephoras christmas holiday marketing efforts. (2010, November 10). Retrieved from http://fashionmarketingcritic.com/sephoras-christmas-holiday-marketing-efforts
  • 12. The sephora project. (2008). Retrieved from http://www.sephora.com/go/thesephoraproject/index.jhtmlSephora by opi. (2011). Retrieved from http://www.sephora.com/browse/section.jhtml?categoryId=C23880Shopping for a beautiful cause. (n.d.). Retrieved from http://www.sephora.com/browse/section.jhtml?categoryId=C13661