Sephora Cosmetics

Introduction

Sephora is a French cosmetics company thatspecialisesinbeauty products, such asmakeup,personal care, skin care, and accessories. It is founded by DominiqueMaddonaudin 1969. The company also sells products of other reputed cosmetics companies,along with their private labels.

In this report, we are going to introduce about Sephora's background information, facts about Sephora's business, Sephora's SWOT analysis, the ways Sephora maintain and increase customer loyalty andthe ways theymotivateits employees.

There areafew strengths of Sephora, such ashaving acohesive brand imageon all their marketing channels which provides a place for customers to sit and watch tutorial videos of brands,sensory experience in their stores, high customer involvement, good product portfolio and outstanding digital experience.

On the other hand, some of the key weaknesses of Sephora includingoverpricing their products,channel dilution, poor penetration in Asia and over-focus on experience.Besides, one of the Sephora's opportunities is growth potential for consumers as they understand that having the right product will transform a person's looks and appearances.

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Other than that, the threats of Sephoraarehaving competition with other department stores such as Bloomingdales and Nordstrom which sells similar products with high quality.Last but not least, Sephora motivatesits employees by offering staff discounts on in-store and online platforms, provide training to employees weekly and they can also get promoted from cashier to skincare PHD.

Background Information

Sephorais aFrench-based beauty products company and it is founded in Limogesin 1969.Sephora is also owned by LVMH Mot Hennessy which is a French multinational luxury goods conglomerate. Sephora chain expands more than 750 stores in 21 countries.

Sephora offersup to 300brands of beauty products includingcosmetics,skincare,body,fragrance,nailcolour, beauty tools, andhaircare. Sephorais a combination of "sephos", which is Greek for "beauty" and the Greek form ofTzipporah(),which means "bird" (female) in Hebrew, and was the name of the wife of Moses in the Book ofExodus. ("Sephora's history behind the brand," n. d, para.5)

According to thecompany history, Sephora started out as a small perfumery in Limoges, France, called Shop 8. DominiqueMandonnaudis the founder of Sephora who wanted to provide a place for customers to try out the products before making a purchase.

Products were grouped together by type, not brand. By 1979, 12 more stores had opened.Mandonnaudpurchased the Sephora chain in 1993.This meant integrating the 38 Sephora stores with his 12 Shop 8 stores. In 1995, Sephora company began a brand of its own name. The Sephora brand included bath and body products.

In 1997,Louis Vuittonand Moet Hennesseybought the chain. Sincethen, the Sephora brand has branched out into 30 countries across the globe. By 1998, Sephora had developed into Italy, Portugal, Spain, and Poland.Sephoralaunched their first store in the United States in New York city in 1998 . Nowadays, there are more than 250 stand-alone stores in the United States. Many of the stand-alone stores in the U.S. are located in large shopping malls.

With the rapid development of science and technology, Sephora now offers its products for sale on its website. According to the company, the U.S. site started in 1999, and the Canadian version followed in 2003. While online customers cannot benefit from the company's in-store sampling program, the convenience of shopping online is a draw for many. Additionally, the online store may have brands and products that local stores do not. With the comprehensive return policy, shopping is mostly worry-free.

In 2003, Sephora began its Beauty Insider program. This program allows customers to earn points as they buy. Customers become eligible for small gifts when points built. As customer gain the points when they purchase it has three levels which are Beauty Insider, VIB, and VIB Rouge. This program explains that the company took the "try before you buy" idea a step further in 2005.

Sephora stores became popular when they introduced t beauty bars, which became popular in Sephora stores. As part of Sephora's ongoing effort to reach as many beauty fanatics as possible, the company partnered withJ.C. Penneystores in 2006 to create "Sephora InsideJ.C. Penney," a store-within-a-store concept. There areover 485of thesemini-versionsof the autonomous in Sephora stores. Although it does not contain many merchandises, still operates in much the same style with sampling and the Sephora Beauty Insider program.

Sephora has built quite a bit over the last three decades. The company has forged ahead into several countries, making a name and a brand for itself. The cosmetics industry continues to develop, and it's very likely that Sephora will enlarge and grow right along with it.

SWOT Analysis

SWOT analysis is a technique used to analyse a company's strengths, weaknesses, opportunities and its threats. It helps the company to concentrate on its potency, minimise the potential threats and even take the greatest benefit of the chances available to ensure the company will perform well. Strengths and weaknesses are related to a company's internal environment while opportunities and threats are the external factors.

First of all, the strength of Sephora is it has a cohesive brand experience in store and even online. This company present a highly cohesive image on all their marketing channels including online and social media such as Facebook, Instagram and so on.

"Beauty Workshop" stations are designated in the Sephora's store and it provides a place for customers to sit and watch Sephora tutorial videos, learn using new products with Virtual Artist, and share it online. Besides, it enables customers interact with the website features and be more confident in more complex make-up application such as contouring. Next, Sephora has outstanding digital experience.

The website of Sephora is amazing and easy to navigate with numerous interesting choices. The Beauty Talk Section enable customers to interact with each other as well as the experts about skin care, make upand alsofragrance. Sephora Virtual Artist is a virtual experience which allows customer to try on different makeup options such as lipstick colour. The Sephora Beauty Board allows people to post pictures online and show the cosmetics and current makeup trend in action.

However, there are still a lot of needs that Sephorahas toimprove. Firstly, the price of Sephora's products is quite expensive compared to similar products in other companies. Sephora is luxurious cosmetics brand and thus it is exorbitantly priced. Even though the quality might be better than other brands, the price is too expensive and not every customer could afford it. Next, Sephora over concentrate on the customer's experience.

Sephora spends a lot of effort on creating the right experience to their customers. This company try to create similar experiences by integrating across channels and finally it becomes challenging to execute it. Furthermore, it also distracts people from their main purpose of selling products as many customers prefer walking into the store to try and experience makeup without buying anything.

Moreover, Sephorahastowork on brand recognition among the consumers as Sephora seldom has promotion on TV, billboard advertisements or print ads. The company can interact to their customers through this way.

There are still many opportunities that Sephora can put effort to grow and become a better company. These opportunities include the growth potential for consumers. This is due to the reason that cosmetics industry is in the high growth mode and become a trend in all around the world as more women become conscious about their looks and appearances. They understand the need for different makeup for different skin types on different occasions.

Besides, Sephora can focus more on men's cosmetics as the options for men's products is less and limited. If Sephora focuses more on men's products, this can help them to attract more men customers and their profits will increase. Next, Sephora is encouraged to partner with social influencers such as beauty bloggers onYouTube. Sephora can sponsor some products to them so they could share the products online to their fans or followers. This is also a way of promotion.

The major threat of Sephora is competition as departmental stores such as Bloomingdales and Nordstrom sell similar products with high quality. Next, the price of the products is quiteexpensiveand it is not affordable for all consumers. This threatens the customers to go an inexpensive store to buy identical products with lower price.

The second threat for Sephora is economic instability. During recession, make up and skin care products is not a need. People will not purchase any speciality products If they have no extra money. The stocks of Sephora will becomesurplusso they have to decrease the price to sell out all the products.

Strategies of Sephora

Ways Sephora increase / maintain customer loyalty

Sephora increase or maintain its customer loyalty by using a 'Beauty Pass' which is a loyalty cardwhere you can accumulate points and get rewards when you reach a certain point. It is categorised into three membership levels, which are white member, black member and lastly, gold member.

It's easy to be a Sephora member, you justhave tocreate an account online by signing up with your email address or you can also connect it with your social media account. After that, you can start collecting points! You get to earn one point with every RM3 spent. Then, after accumulating the points, you get to use the points to redeem exclusive rewards, such as sample sets, travelsetsor you can also exchange your points to get discounts for your overall purchase. Of course, all these rewardsvaryfrom the points you accumulate.

All the three stages of membershiphavedifferent benefits. The first membership level is the White member. You get to enjoy beauty pass rewards, as stated above, and you also get to enjoy 2x points when you purchase anything in-store or online during your birthday month. Besides, you also get to enjoy members-only promotions. The next tier of the membership level is the Black member.

This is when you spend up to RM900 within a year in Sephora. The rewards you get to enjoy is the same as White member, but you will get a welcome gift and birthday gift when you'reupgradedand you also get to enjoy private sales. Sephora usually has private sales at least once a year, and you can enjoy 20% off storewide if you are a Black or Gold member, which is areally gooddeal.

And finally, the last tier is the Gold member. It is when you spend up to RM4500 in a year. It is the most luxurious membership as you get to enjoy all the benefits just as the White and Black member, but additionally, you get to enjoy early access to privatesalesand you may join exclusive events and launches and custom makeovers.

Ways Sephora motivates its employees

Knowing how and what to motivate employees is extremely important in business, especially for a bigbusiness likeSephora. In order to achieve efficiency, firmshave toensure that employees are motivated to do their part so that they could maximize their productivity and contribute fully to achieve their goals.

Well, most people think that money is the key factor that motivates employees to get their job done well. But that is not always the case, some people are motivated by non-monetary values, such as their personal achievement, promotion opportunities and job rotation, so that they could realize their full potential which money cannot satisfythem.Working satisfies many more of employees' different wants and needs.

Unquestionably, Sephora has its way to motivateit isemployees too.One of the motivatingfactoris money. According to a US job street website, the average Sephora salary varies from about of $18 592 per year for Consultant, to $150 000 per annum for Product Manager and hourly pay varies from roughly $10.00 per hour for Education Manager to $35.00 per hour for Co-manager.

This salary analysis of Sephora comes from 870 data points collected directly from employees, users, and past and present job in the past 36 months. We can see that Sephora offers a rather high salary compared to other cosmetics company regardless of the rank of the employees.

Another way Sephora motivates its employees is using the non-monetary factors because money alone cannot fully satisfy employees' wants and needs.Besides paying its employees high amount of salary, Sephora provides weekly training to its employees which will increase their personal development and knowledge so that they'll be able to serve their customers the right product.

As Sephora sells prestigious beauty products, representatives of different brands will visit Sephora a few times a week to give their employees training. During training, they will provide them free samples (in full, half or samples) for trainees to try, which costs a lot of money if they were to buy themselves. In addition, employees of Sephora get hefty discounts if they were to get any products from Sephora.

Mostemployees get20% staff discount if they were to purchase from the online website or in store. During the holidays, especially winter, they might get an additional of 10% discount, which is 30%, and if they purchase Sephora's owncollectionthey will get 40% discount.

Furthermore, they also get 20 to 30% discount on J.C. Penney products, which is the partnership store of Sephora. These discounts definitelymotivatetheir employees as most of them loves beauty products and they'll enjoy working in Sephora as they get to have so much benefits on the discounts.

Moreover, they have different ranks in Sephora and the good news is that employees can be promoted from rank as low as cashier to skincare PHD holder. Most employees in Sephora start from scratch, they do not need to have any basic knowledge or experience for makeups. All of them start working as cashiers or stocking the shelves overnight.

What's shocking is that they can work their way up to get a skincare PHD if they feel that they are ready and capable of doing it and complete additional training which is beyond the Science of Sephora. Also, there are also a chosen team of employees who will represent Sephora to go to many other countries to demonstrate makeup application techniques and represent Sephora on their social media channels.

Lastly, Sephora employees are not forced to make commissions. This is really an important way of motivating the employees because this makes them feel comfortable, just as they are working at home, they are given the freedom to give opinions on products. "We just really care.

The reason a lot of us work for Sephora isbecausewe don't have to work off commission," Carpluk says. "We're there to support each other and make our clients feel beautiful andhappy, andsuggest what's right for them based on their particular concerns." To motivate employees to be happy and positive, Sephora also offers customers to go online and write reviews on the website about how they feel about Sephora.

Conclusion

All in all, Sephora have done a great job as a luxurious beauty company as it has achieved their main goal by letting customers to try on products before buying in-store and by using Virtual Artist online which is a good strategy. As Sephora has 750 stores in 21 countries, Sephora has a great online platform to serve all their customers by using tutorial videos, Virtual Artist and Beauty Talk Section. According to our research and interview, employees of Sephora are happy working in Sephora as they receive a lot of benefits. Moreover, using Beauty Pass is a great way to increase/ maintain customer loyalty as it encourages customers to accumulate points and get free gifts.

However, the products sold in Sephora are way too expensive and not all the customers can afford to buy them which is one of their major weakness. Sephora should also include some drugstore/ cheaper products and men's beauty products, such as shavers, deodorant, perfume so that they could target all kinds of customers, or else other departmental stores such as Bloomingdales might overtake them in future.

Recommendation

In our opinion, we think that Sephora should give their employees training not only on beauty products, but also on their character, for example, how can they still smile and give good service to customers when they are having a bad day. The reason why we think that Sephora should provide character training to employees is because we interviewed two different branches of Sephora and we experience different treatment from both branches.

One of the branches entertained us really well and she's really giving us the information weneededand she really serve us and treat us like her close friends. In contrast, another branch treated us really badly and we really didn't feel valued when we're interviewing one of their supervisors. This is because she totally pisses us off by giving us vague information, for example, we asked her about whydid she chooseto work in Sephora, and she answered just like why you're studying in Xiamen University. 

Besides, the staffs of Sephora should be given the right to give away free gifts without asking permission. For example, the waiters of Haidilao are allowed to give free foods such as fruits and cakes to the customers without asking their supervisor. Hence, their service is always the reason why they are superior than other brands and attract the customers. They are always customer-driven and they are willing to entertain the customers with patience and best services.

Additionally, Sephora should also sell cheaper range of products. This is because products that are sold in Sephora is way too expensive for everyone to buy it. This will affect its sales as some customers will go to other departmental stores to get cheaper products with the same quality instead of buying from Sephora.

Lastly, Sephora should also include more men's products, such as deodorant, cologne and shaver. This will boost its sales as it targets both genders, especially when they go shopping with their girlfriends, they can also look at the men's section while their girlfriends do their shopping.