Sephora: Augmented Beauty

Some say beauty comes from within. Sephora says it comes from numbers.

Sephora, a subsidiary of fashion powerhouse LVMH, sells makeup, perfume, and other beauty items through its retail stores and online outlets. The company markets a host of different brands, and has thousands upon thousands of products. With seemingly endless options and a shifting customer preference for ecommerce, Sephora has out-innovated its competition and remained not only relevant, but a driving force in this market.

The beauty company has accomplished this success with data. Big data. Endless amounts of customer buying habits, social media trends, and a loyalty program that not only rewards recurring purchases but also markets customized products. Every bit of innovation is focused on enhancing the customer experience and driving sales. From makeup novices to smoky-eyed pros, Sephora has used its data to enhance each customer’s experience.

“[Data] is kind of a currency to us,” said Angel Singh, director of product analytics and optimization at Sephora. “We have a lot of data on our clients and we’re trying to figure out how to leverage it.” http://www.retaildive.com/ex/mobilecommercedaily/how-sephora-leverages-loyalty-data-to-optimize-segmentation

A newcomer first entering the store to purchase foundation can easily be overwhelmed by all of the options. To assist, Sephora technicians use a custom technology to match the customers skin tone to one of 122 different shades with its Pantone system.

Once Sephora matches the customer’s color, they gather other customer preference data points such as price point, SPF, oil or water-based, animal-tested, etc. to further narrow down the set of products and find the perfect match. By gathering this information, Sephora uses its data to start suggesting not only the right brand and product, but also what other types of products customers of a similar profile have purchased in the past. When this technology was first implemented, Sephora realized several of the most popular shades were missing from brand line ups. They have since worked with different companies and add 2900 more products to flesh out their offering. According to Sephora’s Chief Marketing Officer and Chief Digital Officer, Julie Bornstein, “Brands had never been able to see that data before.” https://www.wired.com/2014/08/sephora/

And that’s just for the walk-ins. Sephora also caters to its advanced client base with the same level of precision. This cohort falls into their VIB or VIB Rouge members who spend $350 and $1000, respectively, per year. These members follow trends, binge watch makeup tutorials, and experiment with their looks. Each email and promotion sent to these customers is based on their previous purchases and purchases of customers with a similar profile. The more Sephora knows, the better the suggestions, the more likely a sale is made. This market is heavily involved with social media, and Sephora took note. The company aggregates information from Pinterest, Youtube, and other outlets to predict the next trend, and uses that data to market or even create new products to satisfy new needs and wants.

And there’s new technology being added every day. Sephora’s online Virtual Artist gives you an instant virtual makeover with customized products, links to purchase, and application tutorials. I took it for a test run without any makeup on and here’s what ‘after’ looked like. (Note, ‘before’ photo intentionally omitted)

Not bad for a machine.

Sephora has achieved double-digit revenue growth and gained market share worldwide. Its particularly remarkable performance in the United States propelled the brand to the highest echelon of the selective beauty market.

“Driven by the ambition to offer its customers a fresh new experience in the world of beauty, Sephora continued to focus on the strategic foundations on which it has built its success: highly dedicated, expert staff; an innovative selection of products; a growing range of exclusive, customized services; and more and more digital initiatives. It will go on opening new stores and renovating its network at a sustained pace.” -LVMH 2016 Annual Report https://r.lvmh-static.com/uploads/2017/03/lvmh_ra_gb_2016.pdf

What works for Sephora’s strategy is their maniacal focus on the client. Application of new technology in mobile, social media, hardware, or other, are all focused around a community that is passionate about their products. With more data being collected daily, Sephora is likely keep generating beauty and bottom lines as far as the eye can see.

 

Sources:

How Cosmetics Giant Sephora Plans to Survive Retail in a Digital Age

https://centricdigital.com/blog/augmented-reality/how-sephora-is-revealing-the-future-of-augmented-reality-in-fashion/

http://www.retaildive.com/ex/mobilecommercedaily/how-sephora-leverages-loyalty-data-to-optimize-segmentation

https://hbr.org/2014/06/how-sephora-reorganized-to-become-a-more-digital-brand

https://www.forbes.com/sites/barbarathau/2015/03/06/sephora-grooms-digital-leaders-with-innovation-lab-debuts-mobile-experiences/#4ffeece52b7f

https://r.lvmh-static.com/uploads/2017/03/lvmh_ra_gb_2016.pdf

http://www.racked.com/2013/7/30/7657827/sephora-just-unveiled-a-revamped

http://www.iotjournal.com/articles/view?12819/2

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