SEPHORA IIM CASE STUDY

1. Βούρτση Κωνσταντίνα - M5AΠ1815017
Δόγια Δέσποινα – M5AΠ1815014
Χαϊδεμενάκη Στυλιανή – Μ5ΑΠ1815038

2.  1000 stores – 23 countries
› 450 in USA & Canada
 In metropolitan areas & shopping malls
 Partnership with JC Penny exclusive
beauty retailer
 288 brands, over 20.000 products
› Prestige brands except for Chanel & MAC
 Target group: 25-35 year old women
 Pricing: MSRP
 Promotion: samples, 2 discounts events
each year (loyalty card)

3.  Sephora.com
› 30% of the U.S. online market
 Beauty Insider Program
› 15 million customers signed up
› 80% of Sephora’s sales
 Facebook  900.000 fans
 Beauty Talk – Q&A forum
 Twitter 100.000 followers
 Online Video/ Youtube
› UGC and Professional videos
 Mobile initiatives
› WAP – optimized for mobile users
› iPhone application

4. Pros
 21.000 products
 Discounted mass-market
products and prestige
brands – beauty
“superstore”
 Strip malls & easy parking
 Full- service salon
 Extended target group 44+
women  tend to be more
loyal
 Approachable & in style
personality
› Considered as “more
down to earth”
Cons
 No niche makeup brands
 “Off-mall” locations
 Less retail stores
 Less loyal customers (only
7 million in loyalty
program)
 Weaker digital presence
› E-shop & Social media
 No mobile offering in 2010
 “Fast follower” of Sephora
› 29% market share

5. Pros
 First to have active
review boards 
posting reviews on
amazon for products
bought on Sephora
 Cheaper prices
 Variety of products
 Recognition
Cons
 Not expert in Beauty
retail products (low
variety and stock)
 No retail shop
› No possible product
testing and
experimentation
 No loyalty program

6. Pros
 Deep discounts in
luxury brands – “flash
sales”
 Prestige brands not
available at Sephora
Cons
 Only online shop
 No mainstream
brands
 Deep discounts only
for a short period
 Limited stock

7. Pros
 Convenient
 Brand expert
employees
 Variety of product
categories
Cons
 Not expertised in
Beauty products
 Limited line
products
 No online shop
 No digital presence

8. Strengths
 Strong brand recognition
 Positioned as an expert in
beauty industry
 “top of the times” products 
customers willing to pay more
 Private label products – value for money
 Open sell, self-service in store setup
 Fun & party atmosphere, no pressure to
buy, free trial
 Animations – Coordinate messages both
offline and online

9.  The biggest online beauty website
 Reward program – VIB
 Engaged & Loyal customers
 Strong content – Talk about things people
care
 Free samples (on-line and off-line)
 Online search advertising (googleAdwords)
 traffic to website
 Strong presence in social Media
 Mobile iphone app
 Integrated exprerience

10. Weaknesses
 No retail stores in rural areas
 Not every prestige brand (e.g. Chanel,
MAC)
 Small staff size
 No saloon experience
 No discounts
 Some app features slow to download
 No android app

11. Budget Category Description/ Programs 2011 Budget Allocation
Video Production
(professional Sephora
videos)
•positioned as expert
advisor
•balance between
Sephora’s and UGC
videos
•More “how to”
videos cross selling
100.000 (10%)
Video/YouTube
Advertising
•Trend: less reading -
more video viewing
•Attract new customers
•Enhance repurchase
•Inform for promo,
services, events
100.000 (10%)
Video Contest •Take advantage of the
UGC video to create
content
•UGC videos boost
credibility of products
•Brand engagement
50.000 (5% )

12. Budget Category Description/ Programs 2011 Budget Allocation
Facebook Development •Maintain our strong
presence
•Continue promotions
50.000 (5% )
Holiday / Viral Promotion •Maintain buzz
•Catch attention
•Enhance seasonal sales
50.000 (5% )
Social Partnerships •Partnership with a
women’s block or site
•Sharing audience
•Boosting digital
presence
150.000 (15%)
Mobile •90% of our clients use i-
products
•Expand and improve
iphone app
•App for ipad
250.000 (25%)

13. Budget Category Description/ Programs 011 Budget Allocation
Store Kiosks •Boosts in-store
experience
•Ability to compare
products, prices
•Ratings, reviews,
information
•No need for more staff
or further training
150.000 (15%)
Twitter •Strengthens social
media presence
•Drive traffic to website,
youtube
•Not everyone has FB
profile
•Promotes events and
contests
50.000 (5% )
Beauty Talk •Promote the forum
and blend it with FB
•Improve platform’s
environment
100.000 (10%)

14. Print Catalogs
 Half length catalogs
 2 times/year
Direct mail pieces  email

15. On Facebook:
 Lack of archival capacity
› Same questions over & over again
› not easy way to save & query responses
 Not recognition of “superusers”
 No way to mask a client’s identity
 24% of respondents said yes!

16. Q & A forum
Strong search functionality
Safe and private environment
Recognition of “superusers”  “beauty
master”, “beauty heaven”, “VIB”
“Superusers” become opinion makers
Enhance credibility, brand engagement
& loyalty
Opportunity to provide a wealth expert
advice

17.  Create a banner on Facebook for direct
registration to Beauty Talk
 Use links in Beauty Talk to the other social media
pages
How to
blend it with
Facebook?
How to
promote
the forum?

18. need
Seeking
information
evaluation
of
alternatives
purchase
use
Post
purchase
behavior
Promotion activities,
Advertisment, Social Media,
Website, Beauty Talk, E-mails,
Mobile app
Social media, Mobile
app, Website, Beauty
Talk, E-mails, In store,
Promotions (catalogs),
Advertising
Social media, Beauty Talk,
Website, Mobile App,
Promotions (free samples), In-
store (trial)
Retail store,
Website, mobile
app
Social media (how
to videos), Beauty
talk, Website, Retail
store
Social media, Beauty
talk, Website, Mobile
app, Retail store

19.  Growth of website visits among current
and new users
 Valid and timely update of product
information
 Improve and refresh the functionality
and design of the context
 Constant monitoring and derivation of
website statistics

20.  Raise of customers loyalty
 Customer relationship management-
identify most profitable customers
 Provide users with perks and rewards
 Regular communication with clients by
email
 Coordination of all digital media for an
integrated strategy
 Contribution in promotion acts and
synchronization of media in a digital
campaign
› statistics of preferences and profile of online
beauty shoppers

21.  Enhance page functionality  more
search filters
 No 1 online community for anything
beauty related
 Maintain balance between responses of
sephora experts and other members of
sephora’s community
 Encourage user participation through
gifts and rewards
 Collect useful Feedback

22.  Increase number of fans
 Raise reach per post
 Active management and consistent presence
 Organization and constant renewal of the
content of the page
 Redirect user to the official website
 Immediate response to messages or to user
complaints addressed directly to the company
 Encouraging more users for active presence and
participation
 Continuous rewarding of super-users
 Collect useful Feedback

23.  Increase the number of followers
 Engage followers
 Expand reach and create buzz
 Redirect user to the official website
 Make followers to republish promotions,
messages and information about the
brand or products
 Collect useful Feedback

24.  Organization and constant renewal of
the company's channel
 Emphasis in counseling and in promotion
of the brand
 Combination and balance between
Sephora’s and UGC productions
 Increase number of shares, embeds and
referrals from other Videos in Channel

25.  Optimization of Website’s mobile version
(customized)
 Increase downloads of iPhone app
 Improve download speed of the various
features of the app
 App - Functionality that facilitates mobile
purchases
 App development suitable for
iPad

26.  Collect useful Feedback
 Increase traffic from online search results
 Keep clients for longer duration on the site
 Reduce returns
 Lowering call center visits
 Encourage repeat visits
 Enhance communication between clients
 Consolidation as the main platform for
ratings and reviews regarding the products
of Sephora

27. need
Seeking
information
evaluation
of
alternatives
purchase
use
Post
purchase
behavior
Sustain old customers, attract
new customers, offer
integrated experience(fun,
innovation)
Brand awareness,
feedback (beauty
talk, social media),
UGC videos, in store
traffic
Strengthen brand
image, in store traffic,
strong online presence
attract new
customers,
growth sales,
brand name
awareness, online
& offline traffic,
customer service
Added value by
content in social
media, site & beauty
talk, customer service
Low regret,
consistency, re-
purchase , customer
service, WoM

29. Awareness
Bounce rate
Landing page
First visit
Single page visit
Traffic source
Unique visitors
Interest
Direct traffic
Average time on
site
# Pages per visits
Single page visit
Bounce rate
#Scroll down-up
clicks
Click path
Visitor recency
Depth visit
Visit duration
First visit
Return visitor
New visitor
Purchase
Other actions
Downloaded
content
Registrations
# clicks / link
Sales volume
shopping cart
abandonment
rate
Convertion rate
Re-purchase
Repeated actions
WoM
Repeat visitors
Sales per
customer

30. Awareness
# fans
#posts
Post reach
Total reach
Interest
Growth (%)
Traffic to
website
Purchase
Other actions
Talking about
(likes, comments,
shares, votes or
events, check-
ins, number of
new fans)
Engagement
Posts per day
Response time
Response rate
Re-purchase
Repeated actions
WoM
Talking about
(likes, comments,
shares, votes or
events, check-ins,
number of new
fans)
Response time
Response rate
Amplification rate
= shares/post

31. Awareness
# followers
#Tweets
Tweet
Impressions
Interest
Growth (%)
Traffic to website
Profile Visits
Purchase
Other actions
Mentions
Tweets Linking to
you
Engagement
Rate
Favorites
Replies
Link Clicks
Re-purchase
Repeated actions
WoM
Mentions
Engagement
Rate
Retweets
Amplification
rate =
retweets/tweet

32. Awareness
Views
Interest
Traffic to website
Audience
Retention
Purchase
Other actions
Subscribers
Shares & Share
Rate
Coverage, Links
& Embeds
Likes / dislikes
Favorites
Re-purchase
Repeated actions
WoM
Referrals from
Other Videos in
Channel
Comments
Favorites
Likes / dislikes

33. Awareness
Frequency of use
Interest
Number of
downloads (and
upgrades)
Unique sessions
Time spent per
session
Growth Rate
Application
loading time
Length per visit
Behavior flow
Purchase
Other actions
User retention
and Churn rate
Convertion rate
Transactions
(redemption and
purchases)
Re-purchase
Repeated actions
WoM
Number of app
user reviews
Avg. customer
rating – Like
reviews

34. Return On Investment -ROI = (Derived Value
- Investments)/ Investments
Funnel Visualization
End Action Rate=%Searchers/% Active Users

35.  Enterprise (Social) Listening Platforms- ELP
 Text Mining/Analytics:
 Platform API (Application Programing
Interface) tools
› Facebook Insights: Sephora can constant
monitor its page on Facebook
› Tweet Reach: measuring tool evaluate
tweets posted (#Sephora), tweet volume,
access, cost, accounts who have read or
retweet the post, what can affect users
about Sephora and its products
 Site analytics Solution