Assignment
Sephora, a division of Moet Hennessy Louis Vuitton SA (LVMH), the world's largest luxury goods company, is an innovative retail concept from France that is changing the way cosmetics are sold. The store first arrived in the United States in mid-1998 with two store locations, in New York and Miami. Its flagship store, encompassing 21,000 square feet, opened in Rockefeller Center in New York City in October 1999. Now Sephora operates approximately 1,000 stores in 14 countries worldwide, including 250 stand-alone stores in the United States and another 150 locations inside JCPenney department stores. In addition to its strong presence throughout the United States, it also runs stores in Canada, China, the Czech Republic, France, Greece, Italy, Luxembourg, the Middle East, Monaco, Netherlands, Poland, Portugal, Romania, Russia, Spain, and Turkey. The company continues to expand both in the United States and globally. Most fashion-oriented cosmetics are still sold in department stores. The scent and cosmetics areas in these stores consist of counters devoted to products made by each manufacturer. Salespeople specializing in a specific line stand behind the counter and assist customers in selecting merchandise. Services include applying products to the customer's face and showing her how to use products and how the colors will look with her skin and hair color, in addition to making suggestions. Although customers are not required to make a purchase in return for makeup lessons or full makeovers, many feel compelled to buy at least a lipstick or mascara in return for the services. In contrast, Sephora uses an open-sell approach and offers customers over 200 brands of beauty products, including cosmetics, skin and hair care, and bath and body items and covering natural and organic products as well as gifts, personal care products, and shaving necessities for men. Brands cover new lines, best-sellers, classics, and an exclusive Sephora collection that accounts for about 10 percent of sales. The impressive store inventory totals over 13,000 different products-a collection that can be overwhelming for some shoppers. Customers can choose their own level of service, touching, feeling, and trying products on their own or soliciting advice from product consultants. Sephora takes great pride in training its employees about the history and use of the products in its stores, as well as in skills for customer interactions, to provide appropriate service to its shoppers. Recently cosmetic and skin care companies recognized that women need higher-than-expected levels of help navigating the dizzying array of beauty products and tools that regularly change in response to trends and celebrity endorsements.
Previous estimates put the percentage of shoppers needing help at the makeup counter at about 20 percent, but recent research indicates the number may be over 50 percent. The economic downturn has also motivated women to replace a lipstick or gloss that works with the rest of their beauty arsenal rather than replacing their entire repertoire to reflect a new season or trend. These women need more assistance than they did in the past. To meet the needs of these customers, Sephora provides all of its consultants with a four-day course that teaches them the science and uses of the products sold in stores. Consultants desirous of more education can enroll in advanced classes. Successful completion of these classes results in an "expert" pin for skin care, color, and fragrance. Consultants wear their pins in stores so that customers know whom to go to for more information. Classes are taught at Sephora University, the company's San Francisco-based training facility that opened in 2007. Using skills gained at the university, consultants answer customer questions, help women find the best solution to their skin care and beauty needs, and provide free, 10-minute in-store "express services" on a one-on-one basis to customers, covering specific topics such as matching foundation and skin type or transitioning makeup from day to night. Unlike department stores, where these learning sessions occur at the counter, Sephora express services occur in a salonlike setting on the store floor. Learning opportunities are directed to both consultants and managers so that all employees have the full range of knowledge they need to provide an optimal shopping experience for customers and the skills and insights necessary to run a successful and innovative cosmetic and skin care company. This multichannel retailer also reaches customers through its highly interactive Web site (sephora.com). Shoppers using the Web site can search by hundreds of class and prestige brands, product category, editor's picks, hot new items, and Sephora favorites. Many retailers have been unsuccessful selling cosmetics online because customers cannot "touch and feel" products, because beauty products cannot be displayed properly in a two-dimensional format, or for reasons not yet understood. Yet Sephora has, once again, managed to set itself apart from competitors by making its Web site work while still yielding a profit. Some of the brands offered online are difficult to find in department stores, so the convenience of the Sephora site has tremendous appeal. For women who use a variety of brands, Sephora's onestop shopping is also a significant asset. Women know they can find the brands they love at a reasonable price with no hassles. Sephora also uses direct mail to market its products and services. Catalogs mailed several times each year include beauty tips and trends and showcase a variety of brands and products. In October 2006, Sephora began expanding its reach even further by opening stores inside JCPenney stores. At about 1,500 square feet, these stores within stores are smaller than their stand-alone counterparts and are the only beauty offering inside JCPenney. The assortment comprises nearly 50 brands; additional offerings include the Beauty Studio, with its 10-minute express services. In 2007, Sephora launched Beauty Insider, the company's loyalty program. Members accumulate points for purchases, and these points can be redeemed for perks like free samples or limited-edition products.
DISCUSSION QUESTIONS
1. Describe Sephora's target market.
2. Why would women prefer a choice between Sephora's combined self-service and serviceoriented environment rather than the traditional model offered in department store cosmetic areas?
3. What training opportunities are available to Sephora employees? How does this training help set Sephora apart from its competitors?
4. How can a beauty retailer make multichannel retailing work? What makes Sephora's online site so successful?
5. What value do the Sephora stores within JCPenney offer to customers? To Sephora? To JCPenney?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.