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  • (upbeat music)

  • - There really is a before and after Sephora,

  • when it comes to the makeup industry.

  • - [Narrator] Until about 20 years ago,

  • this is how most Americans shopped for luxury makeup.

  • A sales representative of the brand

  • would stand behind the makeup counter

  • and help customers make a purchase.

  • - That completely changed with Sephora.

  • Now it's a free for all, people walk in the stores,

  • they test whatever they want,

  • nothing is behind the glass.

  • - [Narrator] So, how did this French retailer

  • come to dominate the global personal care

  • and beauty product industry

  • and what business practices helped make it

  • the industry leader that it is today?

  • This is the Economics of Sephora.

  • Today, the beauty retailer employs over 36,000 people

  • in more than 2,700 stores, in over 35 countries.

  • Those stores carry over 250 beauty brands.

  • - [Man] At this point,

  • Sephora's like kind of my second home.

  • - [Narrator] The Sephora that we know today has its roots

  • in a small perfume shop that opened in 1969

  • in Limoges, France.

  • At that time, the perfume and cosmetics market

  • was dominated by a service-based retail model

  • in which staff typically received commissions

  • based on sales.

  • Instead, Sephora used the assisted self service model,

  • in which customers are free to test products in the store.

  • - You have a full where you can just

  • like literally grab whatever

  • and you can try on the lipsticks,

  • you can try in the eye shadows.

  • I always leave looking like a literal different person

  • than I arrive.

  • - [Narrator] Sephora customers can still request help

  • from a sales associate who Sephora calls a beauty advisor.

  • - A little bit more trust with the sales representatives

  • in a Sephora store, because they're brand agnostic.

  • So they can tell you,

  • maybe you should buy the mascara from this brand,

  • but you should buy the blush from a different brand.

  • - [Narrator] Sephora also bucked convention

  • in the manner in which it displayed its products.

  • - [Woman] So make-up items are next to each other.

  • Whereas from the same brand,

  • a fragrance would be in the fragrance aisle.

  • From the same brand,

  • a skincare product would be in the skincare isle.

  • - [Narrator] Then in 1997, founder Dominique Mandonnaud

  • sold Sephora to the large luxury retail conglomerate, LVMH.

  • - One of the advantages of being owned

  • by a conglomerate like LVMH,

  • is that the company can jump very quickly on trends.

  • And actually, several of the brands that are sold

  • in Sephora stores are owned by LVMH.

  • - [Narrator] One of the popular brands owned by LVMH

  • is Fenty Beauty by Rihanna.

  • - [Woman 2] And then Fenty of course has a huge section.

  • The whole row of Fenty, we got the lip glosses up front.

  • - [Narrator] Sephora's success also stems

  • from its exclusive line of products.

  • - There's a little bit of a tension

  • in the relationship between a store and a brand.

  • Because Sephora is such a hot store

  • for makeup brands to sell their products in,

  • Sephora ends up having a lot more leverage

  • in that relationship.

  • - [Woman 3] The Sephora collection.

  • - [Woman] The challenge for high-end beauty brands

  • these days is that they're really facing a conundrum.

  • They've become increasingly dependent on Sephora

  • for sales growth, but because LVMH

  • also produces beauty brands

  • and there's an element of competition there,

  • and more brands are coming out constantly.

  • The shelf space is shrinking.

  • - [Woman 4] Five Sephora products you need to try part 10.

  • - [Narrator] In part due to that product exclusivity,

  • Sephora boasts a loyal customer base.

  • - Here are five Sephora products you need to buy tonight.

  • Sorry, I don't make the rules you just have to.

  • - So what you'll find oftentimes on Instagram or TikTok,

  • is that people have these haul videos

  • where they're showing all the products that they bought

  • in Sephora, and they're going one by one,

  • talking about them.

  • - [Man] This is the KOSAS tinted face oil, and it's $42.

  • I recommend this product to everyone

  • and they're always like I'm paying $42

  • for a face oil, yes you are.

  • - [Narrator] Many faithful customers

  • are members of Sephora's Beauty Insider program,

  • which has three different tiers

  • and more than 25 million members.

  • The lowest tier is the Beauty Insider.

  • The next level up is VIB, or Very Important Beauty Insider,

  • which users must spend $350 in a calendar year to unlock.

  • The top level is called Rouge, which customers can access

  • after spending at least $1000 in a calendar year.

  • Benefits like savings increase with each tier.

  • - I'm Rouge, don't judge me, I know I spend a lot of money.

  • Okay, I get it.

  • - But the real advantage for Sephora

  • for the beauty rewards program is that every time

  • a customer goes in there,

  • Sephora knows exactly what they bought.

  • And that is very valuable information for the company

  • to understand who the customer is,

  • what they're purchasing and then down the road,

  • be able to market in a very personalized way

  • to that customer.

  • - [Narrator] Yet as much as the company profits

  • on exclusivity with its products,

  • when it comes to Sephora's consumer base,

  • the retailer takes inclusivity seriously.

  • - One of the ways that Sephora has tried to become

  • more inclusive is by featuring a larger number of brands

  • in their stores, they've made an effort

  • to include black owned brands,

  • and then also by pushing brands

  • to expand their product lines and offer products

  • that appeal to people from different racial groups,

  • different ethnicities.

  • - [Narrator] In 2021, Sephora relaunched Color IQ,

  • a skin tone matching technology.

  • The company offers to assist customers

  • in selecting the most natural products for their skin tone.

  • - [Woman 5] All the products that would be your exact color.

  • - [Narrator] And Sephora is still expanding.

  • In December 2020, the company announced a partnership

  • with the department chain Kohl's,

  • to install 850 shops inside Kohl's stores by 2023.

  • Since opening 200 Kohl's locations this summer,

  • Sephora has added 200,000 new Beauty Insiders.

  • in a statement to the Wall Street Journal,

  • a Sephora spokesperson said, we want to be an unequivocal

  • global leader in the prestige beauty space

  • and a purpose driven brand

  • that is a transformative opportunity for everyone we touch.

  • They continued by outlining three main areas,

  • customers, brands and teams.

  • - Sometimes when customers step outside

  • of the Sephora store, they will have splotches

  • of makeup all over their arms.

  • And that really showcases

  • what they've been doing in this store.

  • (gentle music)

(upbeat music)

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How Sephora Revolutionized Makeup Consumption | The Economics Of | WSJ

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    Kelly Lin に公開 2022 年 05 月 20 日
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