2. 1
Table of Contents
EXECUTIVE SUMMARY..................................................................................................................................3
Introduction ..............................................................................................................................................3
What We Did & Why.................................................................................................................................3
Findings and Recommendations...............................................................................................................4
COMPANY OVERVIEW...................................................................................................................................5
Mission Statement....................................................................................................................................5
Background ...............................................................................................................................................5
Sephora’s Competitive Advantage............................................................................................................5
INDUSTRY ANALYSIS......................................................................................................................................6
Cosmetics Industry....................................................................................................................................6
Competitor Analysis..................................................................................................................................7
SWOT Analysis...........................................................................................................................................8
RESEARCH OBJECTIVES ...............................................................................................................................12
METHODOLOGY ..........................................................................................................................................12
Observation.............................................................................................................................................12
Research Purpose................................................................................................................................12
What We Did.......................................................................................................................................13
Research Objectives............................................................................................................................13
Brief Inquiry of Employees......................................................................................................................13
Research Purpose................................................................................................................................13
What We Did.......................................................................................................................................14
Research Objectives............................................................................................................................14
Online Survey..........................................................................................................................................14
Research Purpose................................................................................................................................14
What We Did.......................................................................................................................................15
Survey Limitation ................................................................................................................................15
Research Objectives............................................................................................................................15
FINDINGS & INSIGHTS.................................................................................................................................15
Observations...........................................................................................................................................15
Our Observational Notes ....................................................................................................................16
Atmosphere ........................................................................................................................................17
3. 2
Brief Inquiries of Employees ...................................................................................................................17
Research Findings: ..............................................................................................................................18
Online Surveys ........................................................................................................................................19
Sample Characteristics........................................................................................................................19
Research Findings ...............................................................................................................................19
RECOMMENDATIONS .................................................................................................................................21
Price Variety............................................................................................................................................21
Increase Promotions...............................................................................................................................22
Increase Advertising of Sephora Brand Makeup ................................................................................22
Fragrance Promotion ..........................................................................................................................23
Blind Product Testing..........................................................................................................................23
Employee - Customer Service Interactions.............................................................................................24
Continuation of High Employee Standards.........................................................................................24
Greeters ..............................................................................................................................................25
Locations Recommendations..................................................................................................................25
Airport Vending Machines ..................................................................................................................25
Easy Access Mall Locations (Outside Access)......................................................................................25
CONCLUSION...............................................................................................................................................26
References ..................................................................................................................................................28
Appendices..................................................................................................................................................28
Appendix A - Observation Guide.............................................................................................................28
Appendix B - Brief Inquiry of Employees ................................................................................................28
Appendix C - Online Survey Outline........................................................................................................29
Demographics Questions....................................................................................................................30
General Makeup Questions ................................................................................................................31
Sephora vs. Other Stores ....................................................................................................................32
Appendix D - Qualtrics Online Survey Qualtrics......................................................................................33
4. 3
EXECUTIVE SUMMARY
Introduction
The purpose of the service audit project is to evaluate the service environment of
Sephora stores and compare this with that of its competitors’. We focus on the sales
associates and customer interactions, why consumers may choose Sephora’s
competitors, and whether Sephora’s customer service positively affects sales. Any
findings and conclusions drawn from research will be used to provide recommendations
to Sephora. These recommendations will assist in improving Sephora stores and
customer service, which in return will increase sales and customer satisfaction.
What We Did & Why
Using our personal experiences and knowledge, we developed the following research
objectives:
Determine the effectiveness of Sephora’s customer service
Study why consumers choose Sephora’s competitors
Determine if Sephora’s service is consistent with its mission statement
Formulate recommendations to Sephora
In order to reach our defined objectives, we utilized various research gathering methods
(surveys and observation) to understand how Sephora’s environment impacts its
customers and the consumer decision-making process. We also gathered data on
Sephora’s competitors to help us understand what attracts customers to those stores as
5. 4
opposed to what it is that attracts customers to Sephora. Below are the three research
methods used.
Observations
Brief Inquiry of Employees
Online Surveys
These techniques were vital to the project because they enabled us to support our
recommendations to the store with factual data.
Findings and Recommendations
After discussing and analyzing the data gathered from the three research methods, we
formulated our recommendations. To ensure we provided the best recommendations,
we very critically analyzed each conclusion and possible recommendation. We
recommend that Sephora do the following in order to better serve their customers as
well as attract new customers:
Advertise Sephora’s generic brand
Offer high quality products that are less expensive
Continue growing and adding more locations, but do so strategically
Greet customers at the door
Keep offering great customer service!
6. 5
COMPANY OVERVIEW
Mission Statement
“To build the most knowledgeable and professional team of product consultants in the
beauty industry” (Sephora USA, Inc., 2016).
Background
Sephora is a beauty-retail store originally located in France and founded by Dominique
Mondonnaud in 1970. Sephora was first introduced in the United States in New York
City in 1998. There are over 2,000 Sephora stores in 29 different countries, and as of
October 2006, Sephora is also located inside of JCPenney stores. The JCPenney
Sephora stores offer the same Sephora experience to consumers, but in a more
convenient and manageable location. The company is headquartered in San Francisco,
New York City, and Montreal. Sephora offers many classic and emerging products
including, but not limited to, makeup, skincare products, fragrances, makeup tools, and
hair products. Today, this company is a nationally recognized global brand with store
locations all around the world.
Sephora’s Competitive Advantage
As a global brand, Sephora is highly regarded as a “beauty trailblazer” due to its
assortment of quality products, superior service delivered by field experts, interactive
shopping process, and continued innovation (Sephora USA, Inc., 2016). These
attributes are what gives Sephora a competitive advantage over competitors. For
example, in an effort to build the most knowledgeable and professional team of
consultants, Sephora developed the “Science of Sephora” program. This is an
7. 6
employee training program that trains employees on identifying skin types, makeup
application techniques, how to interact with diverse clientele, and many other related
topics. This displays Sephora’s dedication to deliver great customer service and support
its mission statement.
INDUSTRY ANALYSIS
Cosmetics Industry
For thousands of years, the cosmetics industry has represented various products from
shampoo to toothpaste and all the way to makeup. With a current target market of
primarily adult women, and increasing competition in the industry, there are new
markets emerging (such as the LGBTQ community, young girls who are learning how to
care for their skin, etc.) which creates opportunities for many companies in this industry
to create new strategies and techniques - including Sephora. In general, the cosmetic
industry is one of continuous innovation and rapid change as new, innovative products
and technologies are constantly introduced to the market. These innovations are
changing the way consumers view beauty products and Sephora as a company. Due to
the rapid development of these innovations and time schedule, Sephora and companies
alike need to make sure that they are future oriented and not employing a “follow the
leader” approach to be profitable and successful.
Another trend in the cosmetic industry as of late is to strategize the role that supply
chain management plays in a company’s manufacturing process. Consumers are
becoming more involved in how their products are created and tested, which creates a
greater level of involvement in cosmetic products. It is important for companies in the
8. 7
cosmetic industry to utilize green processes and raw materials, non-animal testing
facilities, as well as implement an environmentally friendly distribution strategy of
products (Kumar, Massie, & Dumonceaux, 2016).
Competitor Analysis
Some of the main competitors in this industry for Sephora are ULTA, Walmart and
Target. These companies are competitors of Sephora because of their size, level of
recognition, and vast majority of products. ULTA is the most direct competitor for
Sephora because they have beauty professionals in the store ready to assist and
demonstrate products on customers similarly to Sephora. ULTA’s beauty professionals
are trained in makeup application techniques and/or the vast inventory of products that
ULTA sells in their retail locations. Therefore, ULTA is equipped to provide expert
service to customers which is similar to Sephora’s customer service. However, Sephora
is a veteran in this industry and ULTA is a fairly new company.
Two common competitors for Sephora that tend to get overlooked are Walmart and
Target. Both stores are supermarket-retailers which offer a wide variety of products from
produce to home-goods and toys. These stores also have fairly large makeup sections
and typically offer popular “drugstore” brands such as e.l.f., bareMinerals, Maybelline,
L’Oreal, and more. Individuals who purchase these products are not typically looking for
high-end makeup and are more concerned with the cost-effectiveness of makeup
products. Additionally, because Walmart and Target stores are located in many places
and are big in size, it is much more convenient for consumers to shop at these stores as
they are easily accessible to shop for and purchase makeup. The cost-effectiveness
9. 8
and accessibility of Walmart and Target are major competitive factors in the
makeup/beauty industry.
There are companies like Walmart and Target that may also be considered competitors
of Sephora (such as Walgreens, CVS, Wegmans, Rite Aid, etc.); however, Walmart and
Target are the most relatable to consumers and readers. Therefore, these two brands
will be used throughout the analysis to group together similar retailers. ULTA, Walmart,
and Target are three of Sephora’s main competitors since all three stores sell a variety
of makeup products. The reason companies like Mary Kay, Avon, etc. were not included
in this competitor analysis specifically is because these companies focus on selling their
own branded products as opposed to ULTA, Walmart, and Target which sell a multitude
of brands.
SWOT Analysis
Sephora SWOT Analysis
Strengths Trained Professionals
o Customer makeup demonstration process
o Product support
Strong Brand Recognition among loyal customers
Customizable and interactive website
New Makeup Technology
Global Presence
Weaknesses Advertising: very little advertising is done on the different uses for
makeup and why you need various products
Weak fragrance brand awareness and low sales - most people
think of makeup
Location compatibility and accessibility
Opportunities Young Female emerging market
Environmentally conscious supply chain
Beauty professional training and application
10. 9
Threats Environmentally Conscious stakeholders and companies
Lack of convenience
Sephora has a unique business model in that they employ trained professionals who
are experts on the products that Sephora offers and the benefits they bring to the
consumer. This is a strength for the company because many other stores who sell
makeup do not have these professionals in the store to provide free makeup
demonstrations, product support, or guidance to customers. Additionally, Sephora has
strong brand recognition among its loyal customers. This is a strength because the
company is in a customer’s evoked set and is the first store they turn to when in need of
products. Turning our attention to the company’s technological focus, Sephora’s website
allows customers to customize their products as well as interact with new online
technology which tells the customer what products would work best for their skin tone
and products that complement each other. This technology also applies to in-store use.
Originating in France, Sephora has maintained its reputation as a global company and
draws on cultural aspects of various other countries to develop new products and
technology for implementation in the US locations.
Although Sephora has a large amount of strengths, there are a few key weaknesses for
the company. First, is their lack of promotion. There is very little advertising done in
terms of different uses of products and the need for products. The only advertising that
exists from customers is targeted toward their loyal customer base which limits their
overall reach and growth. There is also very little in-store product promotion.
Additionally, Sephora has a very weak fragrance awareness and low sales of their
fragrance lines. When customers think of Sephora, they don’t think of perfumes. Finally,
11. 10
their location compatibility and accessibility is a huge weakness for Sephora. Recently
partnering with JCPenney, there are Sephora shops inside the store which increases
their locations but makes them very hard to access. Overall, if shopping for makeup and
picking up products that customers run out of is not accessible for customers, they are
less likely to stop in the store.
In terms of overall market, there are a few opportunities for Sephora to capitalize on.
First, the target market is growing increasingly younger and are looking for people like
Sephora’s professionals to teach them how and when to use makeup. Additionally,
industry stakeholders are becoming more and more concerned with the environmental
effects of company’s supply chain and how products are created and tested (i.e. made
with chemicals, tested on animals, etc.). Additionally, Sephora could create a more
extensive training program for their employees and really highlight the technology and
customer service techniques offered to customers.
When looking at the industry threats, companies are starting to create and implement
more products which are produced and tested with concern for the environment, the
user’s health, and the overall impact. If Sephora doesn’t show their concern for this, it
could really threaten their business model. Additionally, their lack of store convenience
is a major threat because their main competitors are easily accessible and Sephora is
not. Should customers need to make a “quick stop” at Sephora, their lack of locations
and accessibility presents a complicated process.
Below are brief SWOT analyses of Sephora’s direct competitors:
12. 11
Walmart/Target SWOT Analysis
Strengths Inexpensive products
Moderate variety
Convenient for customers
Location saturation
“Household name” company
High Brand recognition
Weaknesses Low quality products - makeup and fragrances
No specialty makeup offered
No customer service/makeup professionals to assist you
Opportunities Offer higher quality products on the shelves
o Create alliances with makeup companies
Possibility of attracting new customers due to other company’s
high prices
Natural and Organic products - makeup and fragrances
Threats Price reductions from makeup companies
Increased location saturation with competing companies
Increasing required quality of products on the shelf
ULTA SWOT Analysis
Strengths Beauty professionals in store
o Hair stylists
o Makeup artists
o Skincare specialists
Large variety of different products anywhere from makeup to
electronics to bathroom products.
Price flexibility
Loyalty program for cardholders
Partnerships with multiple companies
Weaknesses Weak brand recognition
Limited advertisements in areas where the store is not popular
Opportunities Create Partnerships with brands who sell organic products and
offer them in-store
Emerging youth market
o As well as inexperienced market - full makeovers
Brand development and succession
13. 12
Threats Brand name products
Decreasing margins from partnering companies
Market saturation of beauty and health products
RESEARCH OBJECTIVES
The main goal of this service audit is to evaluate and improve Sephora’s customer
service environment. The following are our research objectives:
1. Analyze the quality of customer service provided to customers at Sephora to
determine the effectiveness of Sephora’s customer service
2. Study why consumers choose Sephora’s competitors
3. Determine if Sephora’s service is consistent with its mission statement
4. Identify opportunities for service improvement and make recommendations to
Sephora
METHODOLOGY
Several research techniques were utilized to gather the sufficient and appropriate
information about Sephora’s service environment. The following describes what we did
as well as each research method’s purpose and objectives:
Observation
Research Purpose
The purpose of performing observations in the Sephora store was to gather data on the
sales associate and customer interactions as well as the environment of Sephora.
Gathering and analyzing such data allowed us to determine how valuable the sales
associates are to the customers and whether the sales associates’ assistance led to a
14. 13
customer purchase. Most importantly, this method would enable us to determine if
Sephora’s service is consistent with its mission statement.
What We Did
We chose to observe consumers at three different Sephora locations: Eastview Mall,
Marketplace Mall, and Destiny USA. Instead of doing all the observations at the same
store we observed different stores to look for inconsistencies amongst Sephora stores
and to have a better sense of Sephora’s brand. We observed the interactions between
customers and employees by monitoring and documenting customer behaviors and
interactions with the sales associates. For example, during observation, we tracked
many things including whether a customer used makeup testers and whether those who
received assistance from Sephora employees initiated the interaction with the sales
associate or if the sales associate initiated the interaction.
Research Objectives
This research method allowed us to do the following:
Understand how customers search for, test, and decide to purchase products
Study how often customers utilize the makeup consultants and whether these
interactions led to a purchase
View the level of organization of store products
Brief Inquiry of Employees
Research Purpose
The purpose of asking Sephora employees various questions was to (1) determine the
certified level of makeup expertise and specific skillsets Sephora employees must have,
15. 14
(2) learn more about the level of service that Sephora employees can provide to
consumers, and (3) gain insight on the scheduling of employees.
What We Did
After documenting observations, we asked the makeup consultants some questions
regarding the qualifications required for a person to work at Sephora, the number of
employees on duty, and the new technology that Sephora uses to assist their
customers. Please see Appendix B to view all questions and responses.
Research Objectives
This research method aimed to determine the following:
The number of employees that work at one time
o Weekday vs. Weekend
Qualifications required for employees
Important skillsets necessary for employees
How new technology has improved Sephora’s customer service capabilities
Online Survey
Research Purpose
The purpose of conducting an online survey was to study consumers’ opinions of
various aspects of Sephora and those same aspects of Sephora’s competitors. This
method allowed us to reach a greater amount of people and study why consumers
choose Sephora’s competitors over Sephora. The analysis of this data would enable us
to not only identify opportunities for Sephora, but also provide appropriate and
supported recommendations to Sephora.
16. 15
What We Did
We created and distributed an online survey using RIT Qualtrics. The survey was
distributed by all team members via social media, email, and word of mouth. To view
the layout of the survey, see Appendix C; survey questions can be found in Appendix D.
Survey Limitation
We determined that the survey would be targeted to only women. Most of Sephora’s
clients are women and we did not feel as though we would be able to gain enough
responses from men who wear makeup to draw accurate conclusions.
Research Objectives
The objective of this survey was to obtain data about the following:
Where consumers shop, or would shop for makeup
How Sephora customers rate Sephora’s location, quality of products,
atmosphere, and customer service
How Sephora’s competitors were rated in the same categories
FINDINGS & INSIGHTS
Observations
In the three different stores we saw a variety of interactions between customers and
sales associates such as makeup applications, helping customers to find products,
explaining how to use a product, or recommending products based on a specific
customer’s appearance/needs.
17. 16
Below illustrates the percentage of customer service interactions in which the Sales
Associate (SA) initiated the interaction and the percentage of customer service
interactions in which the customer initiated the interaction.
Prior to conducting the observation we made an assumption that customers at Sephora
tried to stay clear of the makeup specialists. After the observations were completed, we
discovered that in fact consumers were the ones that approached the makeup
specialists. It was interesting to observe this as we expected the opposite.
Our Observational Notes
People who knew what they wanted went straight to the product and used no
help.
Others who were experimenting and had time on their hand used the makeup
artists for help.
Cashiers would try to sell last minute products to customers before cashing them
out
18. 17
They ask for customers to sign up for reward cards or use their points for that
day
Noticed that every customer who purchased a product received a black and
white bag with tissue paper stuffed on the inside. The bag has a very nice style
and firm feeling to it.
Most people buy more than one product when taking advantage of the makeup
artists
Atmosphere
Customers are taking advantage of the makeup artists and the testers that Sephora
offers. This service offering is one of the top reasons as to why customers choose
Sephora over their competitors. At every location, we found that almost every shelf was
clean and organized. Although customers would test the makeup and leave products
behind where they were not found the Sephora employees were quick to reorganize
their products. It was also part of their duty to change out trash bins periodically.
Observing this at two out of the three locations verified that Sephora’s environment is
consistent with its mission statement.
We noticed that the atmosphere at Sephora is a fun experience for most of their
customers. Interacting with employees and at times with other customers gives a
positive feeling to the customers, this then leads to an increase in sales. Sephora’s
atmosphere includes fragrances but to our surprise a very few number of customers
explored the fragrance aisle and even fewer customers made a fragrance purchase.
Brief Inquiries of Employees
19. 18
Research Findings:
Based on responses from the employees, we discovered the following:
Employee Scheduling
During the week, there are up to three sales associates working at one time as these
times are less busy than the weekend. On the weekends, there are usually four or five
employees working. Also, during holiday times, this may increase to possibly seven or
eight sales associates working at one time.
Employee Qualifications & Skillsets
There are no makeup certifications required for Sephora employees; however, sales
associates at Sephora must have great customer service skills. Because the employees
are constantly assisting customers and sometimes applying makeup onto customers,
customer service skills are key. For example, if the customer has a negative interaction
with a sales associate, that customer is less likely to return to Sephora or purchase a
product from Sephora. This customer may also spread negative opinions about
Sephora to other consumers. Therefore, an employee with great customer service skills
benefits not only Sephora’s brand image, but also Sephora’s sales revenue and profits.
Technological Advancements
With technological advancements, Sephora has greatly benefited! A new technological
device, referred to as Color IQ, is a device that scans the surface of one’s skin and
assigns that person an IQ number. This number provides the customer with specific lip
products, foundations, and concealers that best match that person’s skin tone. A person
can keep track of their IQ number and use it on Sephora’s website. This new device
20. 19
improves how Sephora can serve its customers and gives the company a competitive
advantage against competitors.
Online Surveys
Sample Characteristics
After cleaning the data using Tableau Software, we were able to use data from 240
survey participants to perform our analysis. All survey participants were female and
79% of our participants (189 of 240) were between the age of 18 and 25. Also, the
majority of survey participants were White/Caucasian (90%).
Research Findings
How Women Use Makeup & The Importance of Makeup
To gain a better understanding of how women use and value makeup, we asked our
survey participants how often they wear makeup. Of the 202 participants who
responded that they do wear makeup, 50% (100) wear makeup every day and 41% (83)
wear makeup 3-5 times a week. This indicates that women use makeup on a daily basis
as part of their routine. Even though most women wear makeup every day, 68% (138)
rated the importance of makeup, on a scale of 1 to 5, at a 1, 2 or 3. Only 7% (15) said
that makeup was 5 - Extremely Important.
Where Consumers Would Shop
Of the 38 participants who said they do not wear makeup, 92% (35) responded that if
they were to wear makeup, they would not shop at Sephora. This is alarming as
Sephora wants to be the first place people would go if they were going to start wearing
makeup.
21. 20
Sephora vs. Competitors
We were able to look deeper into why Sephora is not the first place people would go if
they were to start wearing makeup by comparing how the survey participants ranked
Sephora’s Quality of Products, Atmosphere, Ability to Consult with Makeup Experts, and
Location with that of the competitors chosen by our survey participants. From this
analysis, we found that those who shop at Sephora value the quality of products,
atmosphere, and ability to consult with makeup artists whereas those who shop at
competitor locations value the quality of products, atmosphere, and location. From this,
we concluded the following:
The quality of products (5.7 out of 7) and store atmosphere (5.0 of out 7) of
Sephora ranked higher than that of its competitors (quality of products 5.0,
atmosphere 4.1 out of 7); but, these are not major reasons why consumers
choose Sephora over its competitors and vice versa. This does not mean that the
quality of products and store atmosphere do not contribute to Sephora’s success
or that they are not important. It does, however, signify that these are things that
Sephora does better than its competitors.
Sephora ranked higher than its competitors in all categories except for location
(Sephora 4.6, Competitors 5.0). This shows that the location of makeup stores is
a significant factor in a consumer’s decision to shop at one of Sephora’s
competitors.
The ability to consult with makeup experts ranked significantly higher than that of
Sephora’s competitors with an average rank of 4.9 out of 7 compared to 2.6. This
means that Sephora’s sales associates are vital to the brand’s success.
22. 21
Effectiveness of Sephora’s Customer Service
Most women (80%) who shopped at Sephora received assistance from a sales
associate. These employee-customer interactions positively affected the customer’s
experience as 67% of the participants who received assistance from a sales associate
said that they were more inclined to purchase a product because of the interaction with
the sales associate.
This proves that Sephora’s makeup assistants truly give Sephora a great competitive
advantage. 26% (10 of 38) of women who do not wear makeup said that they do not
wear makeup because they don’t know how to use makeup. Sephora attracts
consumers like this who do not know how to wear makeup because the stores provide
makeup specialists who can teach these women how to wear makeup and what
makeup looks best on them.
RECOMMENDATIONS
Based on our findings, our team determined several areas of opportunity and
improvement for Sephora. Please note that the majority of responses we received from
the survey were White/Caucasian female consumers between the ages of 18 and 25.
Below are our recommendations.
Price Variety
Currently, Sephora only sells high-end cosmetics that cost more than the makeup
products you find at a Walmart or Target. Based on the feedback from our survey, 26%
(10 of 38) of the participants who said they do not wear makeup said that the reason
they do not wear makeup is because it is too expensive. For Sephora to gain these
23. 22
budget conscious shoppers, Sephora should expand their current makeup selection to
include less expensive cosmetics that still meet the high-quality standards that Sephora
is known for. NYX Cosmetics, BH Cosmetics, and Makeup Geek Cosmetics are popular
products in the makeup community because they have better color payoff and staying
power than most drugstore makeup products and range in the $5-$15 price range. If
Sephora were to offer these products in the store they could attract people who want
more affordable products as well as the existing fans of these brands that would prefer
to buy their cosmetics in store instead of online.
Increase Promotions
Increase Advertising of Sephora Brand Makeup
According to our survey data, a lot of women choose not to shop at Sephora because of
the high prices. This means that consumers may choose to go to other stores that sell
more reasonably priced makeup items instead of Sephora. In order to attract customers
who, desire lower priced makeup, Sephora should increase advertising of their generic
“Sephora” brand products. By offering this lower priced line of products, Sephora can
maintain their high-quality product reputation and accommodate customers who avoid
shopping at the store because of the high prices. Also, the Sephora brand product line
aligns appropriately with JCPenney’s brand. As JCPenney is typically perceived as a
lower priced Macy’s, offering a more inexpensive option makes more sense for
Sephora’s retail alliance and helps align the two companies’ brand image.
24. 23
Fragrance Promotion
A current weakness of Sephora’s is that the stores experience low perfume and
fragrance sales. If Sephora employees were trained on how to ask and help consumers
find their “signature scent” it would help to increase sales and create a different
perception of Sephora, that it’s more than just a cosmetics store. This would be
beneficial for Sephora because customers are often looking for a quick, pleasant beauty
option which is hard to find. As the beauty industry moves more and more toward “quick
fixes”, it’s important for Sephora to participate in these trends and develop fragrance
products to attract and maintain loyal customers. Additionally, Sephora sales associates
could help customers find a new perfume based on their favorite scent categories; such
as Floral, Fresh, Warm and Spicy, or Woody and Earthy. By breaking Sephora’s
fragrances into these categories, it will be easier for customers to find scents they
prefer.
Blind Product Testing
One of the key advantages of shopping at Sephora are the knowledgeable employees
that are there to help you find the right product or apply a product. Per our survey
results, people who do not shop at Sephora did not think they would take advantage of
this service. Sephora could use blind product testing to show consumers how useful
Sephora employees can be. According to Buchanan and Morrison, when a consumer is
unaware of the brand of the product they are more likely to choose based on true
preference rather than bias. Therefore, Sephora could survey a test group and take
participants who answered that they are not interested in using Sephora employees to
help them choose products and bring them to a drugstore cosmetics aisle.
25. 24
While the subjects are shopping, an undercover Sephora employee could start helping
them choose products by saying things like “That color would look great on you” or
“Don’t buy that foundation, this one is so much better” depending on how receptive the
participant is to the advice. At the end of the test, the employee would reveal that they
work at Sephora, showing the added value that Sephora stores provide their customers.
This test could be filmed and distributed across Sephora’s social media platforms, along
with running an advertisement on YouTube videos that are specifically about cosmetic
reviews or makeup tutorials.
Employee - Customer Service Interactions
Sephora offers a wide range of services that are only unique to Sephora. This is one of
Sephora’s unique selling points, and we want to highlight that to the women who do not
wear makeup because they don’t know how to use it. 6% (10 of 38) of women who do
not wear makeup said that they do not wear makeup because they don’t know how to
use makeup.
Continuation of High Employee Standards
According to our survey, 67% of the participants who received assistance from a sales
associate said that they were more inclined to purchase a product. This signifies that
Sephora’s employees are important as they influence a customer’s decision to purchase
a product. Also, based on the responses to our brief inquiries, Sephora employees are
not required to have any makeup certifications, but do need to have great customer
service skills. Thus, managers at Sephora should continue having high employee
expectations as the sales associates are significant in generating sales.
26. 25
Greeters
An additional improvement that Sephora could arrange would be to have a sales
associate greet customers when they first walk in and ask if they need any help. The
greeter can then direct them to a specialist in the areas they need. There are 12.5% of
women who walk into Sephora, and leave without purchasing a product according to our
observation data. With this specific recommendation for Sephora we want to at least cut
this percentage in half by providing extra assistance to our customers. This strategy will
help customers utilize the customer service of Sephora more and will target the women
that come into Sephora and don’t receive help; hoping to convert them into customers.
Locations Recommendations
Airport Vending Machines
A new service that Sephora has begun to offer is placing vending machines filled with
their best-selling cosmetics at popular airports in Nashville, Las Vegas, and New York.
This allows customers to access any products they might have forgotten to pack for
their trip or something fun for them to do while waiting for their flight. Sephora should
increase the number of airports their vending machines are in and possibly place them
in other busy locations like subway stations, large hotels, or conference centers where
consumers will be interested in a makeup vending machine for the same reasons they
would use the machines in the airport.
Easy Access Mall Locations (Outside Access)
A major hindrance to Sephora is their lack of locations which prevents a customer’s
easy access to their store(s). If they were to slightly increase their number of locations
27. 26
each year, there would be dramatic growth in sales and customer loyalty from simple
ease of access. ULTA is a very popular store with multiple locations nationwide.
Because their stores are easily accessible, customers can quickly stop, pick up their
makeup, and continue their way. Stores like Walmart and Target also offer easily
accessible options for customers to purchase products and, the stores can be found
nationwide which helps to create consistency and reinforce the idea of convenience.
Sephora however, does not have enough locations for their stores to provide easy
accessibility for their customers. Based on our survey results, 91% of women who wear
makeup, wear makeup at least 3 times a week. Thus, if Sephora increases its locations,
these women are more apt to go to a Sephora store instead of one of Sephora’s
competitors. We believe that this is one of the main reasons Sephora is expanding their
locations to include more popular shopping centers as well as creating an alliance with
JCPenney stores. By increasing their locations and the ease of access to these
locations, Sephora will not only see an increase in sales, but also an increase in
customer loyalty and agreeance levels.
CONCLUSION
We believe that the online survey, method of observation, as well as brief employee
inquiries revealed a great deal about Sephora; some of which we did not expect going
into the service audit. Sephora unlike their competitors is a strategic makeup provider
who focuses on differentiating themselves from companies in the industry by offering
unique customer service experiences. Overall, we found that women ages 18 to 25 who
didn’t use makeup in their daily routines would likely not shop at Sephora. However,
after further analysis, we discovered that should these respondents use makeup in their
28. 27
daily routines and shop at Sephora, sales associate - customer interactions would be
beneficial and would most likely lead to more purchase quantity. We found this to be
true in both the online survey as well as the observational data.
This service audit provided valuable knowledge and application about surveys, data
collection/analysis, and strategic plan creation.
29. 28
References
Buchanan, Bruce, and Donald Morrison. "Measuring Simple Preferences: An Approach
to Blind, Forced-Choice Product Testing." Marketing Science Institute. Marketing
Science Institute, 1985. Web. 01 Dec. 2016. <http://www.msi.org/reports/measuring-
simple-preferences-an-approach-to-blind-forced-choice-product-tes/>.
Kumar, S., Massie, C., & Dumonceaux, M. D. (2016). Comparative innovative business
strategies of major players in cosmetic industry. ProQuest, 15.
SEPHORA PANTONE COLOR IQ. (n.d.). Retrieved November 30, 2016, from
http://www.sephora.com/color-iq
Sephora USA, Inc. (2016). About Us. Retrieved from Sephora:
http://www.sephora.com/about-us
Appendices
Appendix A - Observation Guide
Appendix B - Brief Inquiry of Employees
