Sephora is a retail store in cosmetics exhibiting a wide variety of prestige cosmetic brands such as skincare, makeup, color fragrance, body, hair care and skin care. Moreover, they have their own personal label. Sephora was started in France in 1969 by Dominique Mandonnaud as a shop selling single perfume. Currently, it has a range of cosmetic brands making it be recognized all around the globe together with making it a prominent player in the market Sephora has more than one thousand stores operating in more than twenty countries. Moreover, out of the many stores, four hundred and fifty are located in the United States (Diane 10). The word Sephora was derived from the word sephos which is a Greek word which means pretty, according to the name Zippora in the bible, the name of Moses wife who was beautiful.
Mandonnaud started with only one small shop that sells perfumes. However, he was determined to expand and his determination made him open up more than fifty perfume stores across France. These stores continued to expand and can be seen evidently today. Online, Sephora is operating as “Sephora direct” an online platform which is aimed at selling its beauty brands. Started in 1999, Sephora direct is currently considered as one of the largest stores in the north of America.Problem statement.
In a bid to keep up with the modern generation and current world, organizations and companies are adjusting themselves accordingly. This adjustment is not only aimed at popularizing the company and brand name together with making profit but also to guarantee survival. Sephora direct’s vice president, Julie Bornstein, therefore plans to significantly increase the company’s investment in video, mobile and social media in order to gain mileage and keep up with the current trends together with gaining more customers. She however has to convince the Sephora USA CEO, David Suilteanuher, with regard to the budget. Moreover, she needs to find out various elements that will lead to the success of the company as a result of this move.
This section of analysis will help determine whether the move to increase investment will act in favor of the company of against it. Moreover, this will help give a concrete and precise idea of the conditions suitable for Sephora direct.
Sephora is an entity that is well known when it comes to the field of cosmetics. Moreover, more than four hundred stores are being operated by Sephora direct throughout the United States this is approximately half the cosmetic market in the country. This factor can be considered as a great strength. In addition to that, Sephora offers a variety of prestige brands that are well known and the company is always at the forefront when it comes to the satisfaction of customer demand and preference together with quality (Lynlee 89). Sephora also uses a market mix that is extremely brilliant and it does anything within its path to achieve success. Online sales by Sephora have increased significantly over the years and the company has been successful in selling out close to every brand that is available in its retail stores. Moreover, testing samples are also availed to customers in the stores before any purchase is made hence giving them a competitive edge over other players in the market.
It is with no doubt that Sephora has attempted to exploit every avenue in order to achieve success. However, the world today is changing rapidly and as this happens, customer taste, preference and demand patterns also changes rapidly. Therefore, digital marketing done by Sephora direct has to be enhanced significantly. The company site has low levels of creativity and this can be very dangerous since the grip of those customers loyal to the company can be lost due to this. Sephora has a failed to capture the entire cosmetic market together with failing to make lee-ways into the mind of the customer.
Due to the rapid changes in the consumer trends and technology, organizations are working hardtop keep up with the trend. Sephora therefore has a good opportunity to capture the market through innovating their brands together with carrying out an improvement of their site through digital marketing that is quality in nature. They therefore need to ensure that their online activities become more obvious, availing every available opportunity and making it prominent globally. Brand ambassadors can be hired since they are essential assets in any company especially that of Sephora’s nature. The beauty talk site should be enhanced significantly since currently it is an important channel that can be used to gain many customers (Elaine et al 150). Moreover, ULTA, one of Sephora’s greatest competitors in the market introduced an e-commerce site which is updated in 2008 and within one year, the company had realized more than six million customers enrolled in its loyal customer initiative. However, ULTA did not have a mobile offering that is distinct in 2010.
Many other players in the sector are currently extremely active when it comes to online marketing which can serve as a significant threat for both the mortar and brick stores together with their mortar and click stores. One greatest competitor in the sector is ULTA which operates stores across the United States stores that are almost equal in number to Sephora. Moreover, MAC cosmetics, Nordstrom and Macy’s are also other major competitors in the sector. However, there also exist other online retail stores such as beauty.com and amazon.com which can serve as great threats to the Sephora direct initiative (Lynlee 56). No major improvements in the company’s innovation and creativity can also serve as a significant threat.
Sephora direct’s senior vice president, Julkie Bernstein is considering the idea of doubling the company’s budget for digital marketing programs and social media. The efforts made by the company in digital marketing over the past seems to be progressing well and therefore this has created an intense desire by the company to intensify the presence of Sephora in online video, social media and mobile presence. The need for more funding must however be justified in details and a framework must be put in place to facilitate equal distribution across various platforms together with coming up with an effective manner to monitor the result on investment for the expenditure on digital marketing.
Marketing plan by Sephora.
Rothstein has been working in association with Bornstein since his arrival in 2009 to come up with a concrete marketing plan. Some of the key factors in the market mix of 2010 included advertising in magazines, printing a catalogue that is always posted in the company’s beauty insider thrice a year, sales promotions which is done twice a year together with merchandising through store windows. One very essential element of the company’s marketing mix is animations which are used to create themes governing their business calendar. Moreover, Sephora’s site homepage together with windows of the stores are designed to bring out life the company’s CEO believes that the company’s marketing image is founded upon creation of a conducive store experience both online and offline.
Sephora has also invested a lot on advertising in online searches (such as Google). This has been done through coming up with numerous keywords for products, brands and terms related to that. Moreover, advertising in online search accounted for the largest component in the company’s marketing budget and it contributed greatly to the realized traffic on the company’s website. In addition to that, email marketing served as an essential component of the marketing mix despite the fact that the emails were relatively cheaper to send, the company spent a lot on programs that entail beauty insiders (Catherine 14). The 2010 marketing budget had a significant amount set aside for mobile, video and social media and Bornstein was determined to significantly increase these amounts come 2011.
Sephora direct- social media.
Sephora initially ventured into social media through giving their customers the ability to post reviews and ratings on Sephora.com. In 2008, this feature was added into the website of the company by Bornstein despite the fact that some individuals were concerned about negative reviews. This move was important since it was realized that many customers opt to go online and rave about certain commodities. Moreover, the company believed that this reviews and ratings could help in understanding more customer preference and taste. Two years after the initiative was unveiled, there were more than one million reviews posted on the site.
Facebook the rating and review experience by the company gave it confidence to venture more into social media. By 2009, the consumer behavior in the online platform had shifted significantly they spent more than 16% of their time on social media. Moreover, at this time, Facebook was rapidly growing with more than five hundred million users worldwide. Therefore, in 2008, the company decided to come up with a Facebook fan page for any individual who wanted to follow Sephora and have a personal attachment with the company. One year after the fun page was created more than three hundred thousand people were following the page, asking questions and receiving feedbacks. Moreover, the company used this as an opportunity to offer promotions on Facebook such as becoming a fan and getting offers on purchases (Diane 2).
Beauty talk despite the fact that the company was able to interact with customers on Facebook, there was increased concern with regard to the lack of the ability to archive these conversations, making different customers ask the same question over and over again. Therefore, the company came up with a communication platform with a search functionality that is stronger compared to Facebook.
Twitter Sephora began making use of twitter in 2009 and one year later, more than one hundred thousand people were following their handle. Sephora uses twitter as a platform of spreading information with regard to events, promotions and contests.
Online video (YouTube) YouTube is one of the world’s greatest video sharing platform. In 2007, Sephora realized that numerous teens were seeking information about beauty and cosmetics on YouTube. Therefore, they started uploading videos which help in strengthening their brand publicity.
Diane Seo, Sephora Applies a Bold Stroke to Cosmetic Sales, Los Angeles Times, February 11, 1999,http://articles.latimes.com/1999/feb/11/business/fi-7.
Catherine Saint Louis, Can Ulta Muss Up Sephora’s Make Up, The New York Times, July 23, 2009,http://www.nytimes.com/2009/07/23/fashion/23Skin.html
Worzala, Elaine M., et al. e-commerce and retail property in the USA. Journal of property investment & finance 20.2 (2002) 142-158.Espeseth, Lynlee. Marketing to women. (2013)