Sephora Case Study

Sephora Case Study Question 1: Describe the target audiences for each in demographic and psychological terms. The target audience of Sephora Retail are people who are younger and hipper than those that frequent department stores. More specifically, it targets 25-35 year old women. These consumers are open to products of medium to high price range, because the brands sold at Sephora Retail are considered as more privileged than those at supermarkets. Nonetheless, it also targets people who might have never purchased cosmetics before, because at Sephora Retail customers can try the products without necessarily buying them. From a psychological perspective, the target audience are willing to try out new things, as Sephora Retail represented a new way of shopping cosmetics. They are also interested in beauty and enjoy experimenting with various products. The target audience also prefer a shopping environment where sales are more objective and less driven by commissions. Moreover, they are aspiring to become a better self, as in general the teenage girls hope to emulate the older women, while the latter want to look young again. The demographic characteristics of the target audience of Sephora Online are more or less similar to that of Sephora Retail. However, Sephora Online also tries to extend its reach to people in regions that do not have Sephora Retail yet. Psychologically, it targets people who are comfortable with purchasing products online, attaining and sharing information through online channels such as reviews, videos, Facebook, and ratings. Last but not least, Sephora Online seeks people who identify with the brand for its loyalty program, and superusers who can enliven the community. Question 2: Describe the different competitive frames/ sets of competitors. For Sephora Retail, its primary competitors are department stores like Macy’s, beauty stores operated by a single brand, e.g. Mac Cosmetics, and multi-brand specialty stores such as ULTA Beauty. Among them, ULTA is the closest competitor to Sephora. For Sephora Online, its competitors comes more from other online merchants, such as Amazon.com, Beauty.com, and other smaller sites. It also competes with some newer, growing companies, such as BirchBox and Gilt Groupe. BirchBox delivers a curated box of samples to customers each month in exchange for a monthly subscription fee. In Gilt Groupe, customers can purchase a limited set of luxury products at big discounts during a short time window. Question 3: What are the points of different for Sephora among both sets of competitors? The first point of difference of Sephora Retail is its non-commissioned model, where sales can guide and answer questions in a more objective way. Secondly, as the products of different brands are placed side-by-side, customers can easily experiment with them without the mental burden of having to buy them. Thirdly, Sephora Retail presents itself as a young and chill brand, and designs its customer experience accordingly. For example, Sephora stores play a mixture of pop and alternative music in order to create a fun and party atmosphere. Fourthly, most Sephora stores are situated in metropolitan areas and shopping malls, and these central locations allow it to reach more people. Regarding Sephora Online, its website offers an excellent search functionality, and provides customers with details about every product sold at Sephora (ratings, reviews, etc.). The second points of difference are its high-quality and engaging customer experience. Sephora Online runs its Beauty Insider loyalty program with great care, and provides loyal customers with various perks. Moreover, it successfully leverages digital tools (YouTube, Facebook, Mobile Apps) to interact with customers and make them feel they are heard. For example, the Sephora team monitors its Facebook constantly to make sure complaints are handled promptly. Thirdly, Sephora Online builds a community of people who are passionate about beauty around its brand. For example, on its Facebook page, people asks questions about products, which are often answered by other users who follow Sephora. It also launches a Q&A Beauty Talk forum on its website. According to Choi, the direct of social media, the team feel that sometimes they are playing the role of party hostess, and they seek to create an environment where customers can freely share their beauty insights with one another.