Setting an Example

No analysis of beauty retail would be complete without taking a look at the success of Sephora. Founded in France in 1969 and acquired by luxury product group LVMH in 1997, Sephora is the leading retail beauty chain in Europe, with approximately 680 stores in 25 countries throughout Europe, Asia and the Middle East, as well as approximately 250 stores in North America.

Shopping at Sephora is meant to be a hands-on sensorial experience and a self-service approach to buying beauty products, and sampling is encouraged. With roughly 200 prestige brands, including a private label line, its enormous variety sets it apart from other retailers. And the open-flow environment allows for display of every product. The store also offers Sephora’s Beauty Studio, a new makeover destination with 10-minute express services. Sephora also began opening its store-within-a-store inside JCPenney in 2006. That original launch has turned into a U.S. phenomenon. Today, there are Sephora locations in about 155 JCPenney stores across the country. The stores are smaller than normal with a footprint of about 1,500-square feet, located in the center of the store and feature the signature Sephora look and approximately 50 beauty brands. JCPenney attempted to go more upscale with its own makeup sections in the past but failed to attract shoppers to the concept. The addition of Sephora has accomplished for the chain what it could not do on its own, offering an experience through a brand that is known within the beauty category. While the department store has halted its once aggressive new-store growth plan, JCPenney does have its sights set on adding 75 new Sephora shops, to total 230 by the end of 2010. The growth is part of the company’s aim to establish JCPenney as “America’s favorite shopping destination for great styles at compelling prices” with recent merchandise additions from design and style experts.

But that’s not all. Sephora also sells via catalog and online at Sephora.com. Issued several times a year, Sephora’s catalogs offer beauty tips and trends and showcase a variety of brands and products. Sephora.com was launched in the U.S. in 1999 and in Canada in 2003. The site is also Sephora’s largest North American store in terms of sales and selection of products and brands.

The brand exemplifies the importance of cross-channel marketing, utilizing social media to develop and test strategies that appeal to changing consumer behavior. Sephora has nearly 560,000 fans on Facebook—with specials, promos, events, videos and pages of photos posted by their followers, along with comments and reviews.