BSTR/566

IBS Center for Management Research

Sephora’s Digital Journey

This case was written by Shubhanjali Chakravarty, under the direction of Sanjib Dutta, IBS Hyderabad. It was compiled from
published sources, and is intended to be used as a basis for class discussion rather than to illustrate either effective or ineffective
handling of a management situation.

Dr. Shivakant Upadhyaya

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India
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 2019, IBS Center for Management Research. All rights reserved.

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 BSTR/566

Sephora’s Digital Journey

“Sephora has always been an early adopter of new, digital experiences and an
incubator of emerging brands.… From there, we’ll continue to look for ways to
use the technology to enhance our customers’ in-store digital experience”1
– Bridget Dolan (Dolan), SVP Omni Experience & Innovation at Sephora
“..We are very proud to be named ‘Retailer of the Year’, which confirms that the
Sephora concept enjoys appreciation on a global scale. As a brand we win best
when we win together and this award recognizes and touches all the tens of
thousands in the Sephora family who have made us successful all over the world.”2
– Chris de Lapuente, CEO of Sephora worldwide, on April 27, 2018

INTRODUCTION

On April 19, 2018, France-based personal care and beauty products multinational ‘Sephora’
received the “Retailer of the Year Award’’ at the ‘2018 World Retail Congress’3 for its outstanding
run in the most competitive market of the decade (2008-2018).
Sephora’s journey through the decade had been largely driven by digital initiatives. By 2018, it
had made rapid strides in digitalization which included the launch of an e-commerce platform and
a mobile application and initiatives around personalization through digital initiatives like Color IQ,
Skincare IQ, and more. It also brought in innovations in its physical stores by introducing beacons
and chatbots. It created beauty hubs at its stores and focused upon educating its customers through
social media like Instagram, Snapchat, and Facebook. Sephora also introduced augmented reality
(AR) and virtual reality (VR) applications and launched its new mobile application ‘Sephora
Virtual Artist’. It channelized tools like Google Analytics 360, to understand its customers’
shopping journey and to educate them further on their beauty related concerns.
The company’s success could be attributed to its consumer-centric and innovative strategies,
which presented its customers with an enriched and engaged digital experience every time they
visited the store physically or procured the products online.

BACKGROUND NOTE

In 1969, Dominique Mandonnaud (Mandonnaud), a Frenchman, opened a perfumery named ‘Shop

8’ in Limoges, France. At that time, buying perfumes and beauty products came with the rigid
concept of ‘buy before you try’. The products were displayed under well-guarded counters and

1
Alex Samuely, “Sephora’s commitment to digital beauty leadership includes beacons, augmented
reality,” www.retaildive.com
2
“Sephora named Retailer of the Year,” www.lvmh.com, April 25, 2018.
3
The World Retail Congress brings in the leaders of the global retail business from everywhere. In 2018,
the congress had 170 participants from the retail world. The congress provides a platform for up and
coming retail companies to share their views and areas of concerns. The 2019 World Retail Congress will
be held in May in Amsterdam, Netherlands.

1
 Sephora’s Digital Journey

were presented by the sales representatives. However, Mandonnaud deviated from that traditional
concept and took the products out of the counters and displayed them at the center of the store for
the customers to try and test before they purchased them. This new way of buying perfumes was a
hit with women and led to the opening of a dozen more ‘Shop 8’ stores in that area by 1979.
In 1993, Mandonnaud acquired 38 perfumeries named Sephora stores and merged them with the
12 Shop 8 stores. The merged entity came to be known as ‘Sephora’. In 1995, the merged entity
launched its first product under the ‘Bath and Body Line’. In 1996, Sephora’s first flagship beauty
products store was opened on an area of 1300-square meters in Champs-Elysees, France.
On July 23, 1997, Sephora was acquired by LVMH Moet Hennessy Louis Vuitton (LVMH), the
Paris-based luxury brand, for a total consideration of US$ 1818.684 million.5 With the acquisition,
LVMH became the world’s leading distributor of perfumes and beauty products. By 1997, Sephora
had already become a leading perfume and beauty product retailer in France and the second largest
in Europe. It had 54 retails stores and employed 1500 people.
In 1998, post the acquisition, Sephora expanded internationally and embarked into the markets of
Portugal, Poland, Spain, and Italy. In the same year, Sephora launched its first company website
(Sephora later revamped the website). Sephora’s former CMO and Chief Digital officer, Julie
Bornstein (Bornstein), said, “The company’s original website was mostly outsourced, and
establishing in-house web development was crucial to catapulting the company into a digital
future. The revamped website aimed to offer better visuals, product information, and
communication mechanisms for clients.”6
In 1999, Sephora opened its first store in the US in New York’s Soho region. As a part of LVMH,
Sephora expanded its stores all over Europe, North and South America, the Middle East, and Asia.
In the 2000s, the company forged into the markets of Romania and Greece. In 2002, Sephora
launched its in-house brand, ‘The Sephora Collection’. In 2004, it opened its first Canadian store.
Sephora sold 300 brands including its own brand, “The Sephora Collection”. The bestselling
brands were Urban Decay, Too Faced, Benefit, The Sephora Collection, Anastasia Beverly Hills,
Tarte, Tarina Tarantino, Laura Mercier, and Kat Von D (See Exhibit I for the assorted collection of
Sephora).
As an early adopter of technology, Sephora operated online stores globally and had individual
websites for different continents and countries which were operated by its branches like Sephora
USA, Sephora France, Sephora Poland, and Sephora Europe. As of 2018, Sephora had 17,000
listed products and around 2,300 stores across the world. It had a presence in 33 countries (See
Exhibit I for the assortment of products at Sephora, as of 2018). France alone had 300 stores while
the US had 430. As of 2018, it employed 25,000 people all over the world.

DIGITAL INITIATIVES

Mobile Application
With the help of market research (MR), Sephora discovered that customers used their smartphones
often even while shopping at a retailer’s physical locations. For instance, the customers searched
for outside recommendations, product reviews, and better or competitive prices of the products
they wanted to purchase in stores. On the basis of the findings of the MR, Sephora launched its
mobile application, the “Sephora mobile app” in 2010. The application was designed to emulate
the skills of a personal shopping assistant or a company salesman who provided knowledge about
the product, recommendations, and the prices in a simple format.

4
As of January 5, 2018, 1 US$ = 0.88 Euro
5
“LVMH to acquire 100% of Sephora,” www.freelibrary.com, July 23, 1997.
6
“How Sephora built a beauty empire to survive the retail apocalypse,” www.cbinsights.com

2
 Sephora’s Digital Journey

Color IQ
From the MR conducted over time, Sephora identified the pain points of the customers in finding
an appropriate shade of foundation. To address the issue, the company partnered with Pantone
Color Institute and launched Color IQ in 2012. The new technology scanned the customer’s skin
and assigned a Color IQ number. The number could be used in-store or on mobile applications to
personalize the product assortments. Sephora leveraged Color IQ and sent emails to the customers,
listing matching products based upon their foundation shade matches. The company encouraged
the customers to buy the foundation from its stores or through its mobile application. This
increased the customers’ stickiness to its products.
Figure I: Sephora’s Color IQ

Source: https://digiday.com/marketing/color-iq-sephoras-shade-matching-skin-care-tool-boosts-brand-loyalty/
Skincare IQ
In 2012, Sephora also launched Skincare IQ as a platform for marketing and sale of skincare
products. Skincare IQ was an augmented reality facilitated quiz pertaining to customers’ skin
complaints. On completion of the quiz, the application searched through Sephora’s diversified
product ranges and came up with recommendations on skincare products based on the customers’
complaints. In later years, the company also launched a scanning feature on that platform, which
provided more personalized recommendations for the customers.

3
 Sephora’s Digital Journey

Figure II: Sephora’s Skincare IQ

Source: https://www.google.com/search?q=how+does+sephora+skincare+iq&safe=strict&rlz=1C1CHBF
_enIN795IN811&source=lnms&tbm=isch&sa=X&ved=0ahUKEwiQ7eKM9tPfAhUfS48KHbeOA74Q_AUI
DigB&biw=1366&bih=657#imgrc=lTgaHN2mm_vIeM:
Fragrance IQ
In 2014, Sephora launched Fragrance IQ, an in-store platform for selling fragrances. Customers
could find matches based on their perfume preferences and style. Fragrance IQ was advanced
further in 2015 after a partnership with a cloud-based scent system ‘Inhalio’7. The partnership
resulted in the development of ‘InstaScent’. InstaScent worked on sensory technology and used a
dry air delivery system wherein customers could explore fragrances emitted from a nozzle. The
customers could smell up to 18 scent families without even applying them.
Figure III: Sephora’s Fragrance IQ

Source: https://www.retailnetgroup.com/research/news/85764/sephora-expands-personalized-beauty-with-new-
fragrance-iq-system
Use of Social Media and Community Platform
In 2014, Sephora launched a social community platform for its customers to express their opinions
and share the latest beauty trends through posts, tags, photos, shares, and comments. The social
platform was known as Sephora’s ‘Beauty board’. The board offered a Pinterest-like social media
platform where users could post, like, and tag different looks and share them with Sephora’s
beauty community. The platform allowed the users to post photos and filter them through trends
and keywords to find specific looks. The platform was visible at every Sephora store on digital

7
Inhalio was founded in 2015. It’s the world’s first connected platform for fragrances.

4
 Sephora’s Digital Journey

screens featuring different products. The company also promoted its brands and products through
social media events on Facebook or other websites. Being the lead player in its industry8 Sephora
successfully created a hype around its product launches on social media (See Exhibit II and III for
Sephora’s social media presence).
Deborah Yeh (Yeh), SVP of Marketing & Brand at Sephora, said, “It’s all about fostering a two-
way conversation between Sephora and clients. This could take the form of promoting social
media events with brand founders online, or other live social media events.”9 Yeh also described
the company’s social strategy in three steps, “Teaching (provide education to customers in regard
to the beauty products), Humor (making the advertisements interesting and humorous on social
channels) and Community (fostering community educations).”10
Sephora realized that despite the company adhering to influencer marketing and product launches,
some customers missed certain essential information. To deal with this problem, Sephora launched
its loyalty members-only mobile and online social platform ”Beauty Insider Community”. This
platform enabled the customers to create a profile to get answers to their beauty related questions
within groups and conversation features on the platform. The customers could also find new
makeup inspirations and tutorials with the Gallery feature. On August 22, 2017, Sephora launched
a new feature called “Live Community Chat’’ that enabled Sephora customers to chat with each
other and gather information on a given product and share their experiences about using them.
Beacons
In 2015, Sephora introduced the Beacons11 technology which enabled the company to gather the
time a user spent in its stores and send relevant messages and advertisements on the customer’s
smartphone once he/she was in the store. The technology allowed a more specialized and engaging
customer experience. Beacons enabled Sephora to send some offers to shoppers while they were
spending time at its cosmetic section.
Dolan said, “…We focused our Beacons messages on being truly relevant and useful for
customers’ in-store, giving them a customized, personal shopping experience. When a shopper
comes into Sephora, she will be prompted to switch her app to ‘Store Mode,’ allowing her easy
access to all of the features she needs while shopping, like the ability to scan products for ratings
and reviews, look up past purchases, view her wish list, and pull up her scannable loyalty card and
saved gift cards, saving her an additional step at check-out. It also rewards pre-shop efforts by
popping up the items she’s left in her cart that are available in this store. And lastly, it lets her
know about all of the perks available to her in store, like free mini makeover services and a free
gift during her birthday month.”
Sephora Assistant
Sephora was the first beauty brand to introduce chatbots for conversational commerce in 2016.12 It
launched the ‘Sephora Reservation Assistant’, a robot for Facebook Messenger, in association with
Facebook, Inc.13, in November 2016. The ‘Sephora Reservation Assistant’ was an appointment
booking robot that helped customers reserve a makeover at Sephora stores across the US.14

8
Abel Amon, “Sephora, retail leader in personalized experience,” theluxonomist.es, November 3, 2017.
9
Ibid
10
Ibid
11
Beacons are small, battery-operated wireless devices which transmit Bluetooth signals to nearby
smartphones. In the context of retail, beacons can reach customers who have Bluetooth enabled phones
and the right retail application downloaded on them.
12
Danny Paris “Sephora debuts chatbot features for consumers at home and in-store,” www.retaildive.com
13
Facebook, Inc. is a US-based online social media and social networking service company. Its website was
founded on February 4, 2004, by Mark Zuckerberg.
14
“Sephora debuts two new bot-powered beauty tools for messenger,” www.multivu.com, November 2, 2016.

5
 Sephora’s Digital Journey

According to Laughton, “…We’re excited to leverage the Messenger platform to create quick and
natural conversational interactions that are client-led. This allows us to provide richer, more varied
conversations that ensure clients get exactly what they want out of the experience.”15
According to Facebook records, with the introduction of the Sephora Assistant, the company
achieved an 11% peak in its bookings and eliminated five steps of the conventional makeover
booking processes.16 Sephora also partnered with a teenage-messaging application Kik in 2016 to
build a chatbot focusing on the younger generation’s needs and choices. Kik had 275 million users,
who spent at least half an hour per session in the application. Its core market was the younger
generation who felt at home with such chat interactions. Sephora's aim was to subsequently
convert them into Sephora customers17.
Figure IV: Sephora Chabot action in Kik

Source: https://www.google.com/search?q=sephora+kik+chatbot&safe=strict&rlz=1C1CHBF_enIN795IN
811&source=lnms&tbm=isch&sa=X&ved=0ahUKEwieqcmVqpLgAhVCU30KHUeKD60Q_AUIDygC&biw
=1366&bih=657#imgrc=v9wzd2KvORPWFM
The company explored a digital rewards program using Kik points, where the users earned points
by performing tasks such as surfing video advertisements. The users were allowed to bid points for
deluxe samples of any branded cosmetics. That enabled the company to gain insights into the
younger generation’s beauty product choices.
Laughton said, “At Sephora, our goal with digital tools and innovation is always to meet the client
where she already spends her time, which is why the Messenger platform capabilities appealed to
us. We were excited about combining ease and utility for Sephora reservations – enabling our
clients to book a makeover with us in seconds, just by messaging Sephora.”
The company also employed Alexa and Google Home. In November 2017, Sephora introduced its
application on Google Assistant with the features of booking beauty services, taking quizzes, and
listening to influencer curated beauty podcasts. This enabled Sephora to identify consumer
preferences better. Sephora aimed to expand the use of Google Assistant functionalities in 2018.
Anne-Véronique Baylac, Chief Digital Officer of Sephora Europe and the Middle East, said, “The
use of voice assistant has turned out to be more than just a fad. It’s paving the way to a minor
digital revolution, of which Sephora wants to be a pioneer.”18

15
“Sephora debuts two new bot-powered beauty tools for messenger,” www.multivu.com, November 2, 2016.
16
“Simplifying bookings with Messenger,” www.facebook.com
17
Rachel Arthur, “Sephora launches chatbot on messaging app Kik,” www.forbes.com, March 30, 2016.
18
Ibid

6
 Sephora’s Digital Journey

Sephora Virtual Artist

Sephora leveraged AR and VR for both in-store and online makeup trials. On February 3, 2016, it
partnered with ModiFace19, and launched both its mobile application and in-store 3D augmented
reality mirror. With the augmented reality feature, one could try on a particular shade of lip color
or a particular set of eye lashes.
Sephora’s new feature was known as ‘Virtual Artist’. The Sephora Virtual Artist application used
facial recognition technology that enabled the customers to virtually try different make up shades
on themselves from the different brands Sephora offered. The application guided the customers to
locate the products and finalize the shades. The innovation in the mobile applications enabled
Sephora to get to know the customers’shopping behavior at its stores and online.20 In 2017, the
Virtual Artist application was upgraded by a color match tool powered by AI which deciphered an
image and estimated the shade of any product in a photo. From there, it linked customers to a
similar lip, cheek, or eye product at Sephora, which they could then virtually try on and later
purchase through the mobile application.21
Beauty Hubs
In March 2017, Sephora introduced the concept of “Beauty Hubs” at two of its shops in France
that offered a unique experience to its customers. The Beauty Hubs contained a virtual look book
with a plethora of options that were provided through iPad stations or interactive mirrors. At those
hubs, customers could try out the products virtually using augmented reality. They also contained
beauty recommendations and tutorials related to skin care. Eventually, Sephora offered beauty
classes with makeup lessons and workshops led by beauty professionals at the Beauty Hubs.
Omni Retail
In order to provide a seamless, engaged, and integrated experience in buying beauty products,
Sephora merged its traditional marketing and digital marketing divisions in 2013. Mary Beth
Laughton (Laughton), EVP of Omni Retail at Sephora, said, “We should be fine with wherever the
customer wants to shop, and our existing organization didn't reflect that mindset, so we brought in-
store and digital under one roof, along with customer service. It's changed the way we think about
sales metrics, engagements, and experiences across channels.”
Bornstein said, “I believe that if you’re going to be a successful retailer – or business in general –
digital must be enmeshed at the highest level.”22 In October 2017, Sephora took a bigger step toward
digital retail and merged its in-store and digital retail teams to create one omni-retail department.
With the help of the merged divisions, Sephora was able to rebuild customer profiles that included
the customer’s journey from online browsing and purchasing to in-store interactions with sales
representatives and over-the-counter sales. Overall, that enabled Sephora to trace the customer’s
complete offline and online behavior in the lead-up to a sale. Data around customers’ shopping
habits was also used to design informative marketing content, which catered to an individual
shopper’s needs.
Customer Relationship Management
Sephora used the “Google Analytics 360 suite” to better understand the customer’s shopping
journeys. It worked with Google, Inc. and integrated the online and in-store purchases using
customer relationship management (CRM). Adrien Eudes, former Head of data at Sephora, said,

19
ModiFace is a Toronto-based skin analysis and facial visualization company, now acquired by L’Oréal,
20
Amanda Cosco, “Sephora introduces augmented reality app virtual artist,” electricrunway.com, February
4, 2016.
21
Natalie Koltun, “Sephora's Virtual Artist app now includes AI-powered color matching,”
www.mobilemarketer.com, June 8, 2017.
22
Ibid

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 Sephora’s Digital Journey

“We decided to start sending our offline purchases to our Analytics 360 account to connect these
purchases to existing journeys.”
The data collected from the integration of CRM and Google Analytics helped Sephora to discover
that 70% of the customers who visited the company’s website purchased the products within 24
hours of reviewing them on the website. Sephora found that its online advertising or digital
marketing enhanced its in-store purchases. There were about 3.9 times more returns from the
advertisement expenditure. The company also found out that if a customer visited its website one
day prior to his/her purchase, there was a 13% enhancement in its in-store purchases. The major
observations were received from Singapore and Australia.
In March 2018, Sephora partnered with CRM provider Salesforce.com. It used its Commerce
Cloud and Service Cloud to offer a personalized shopping experience to customers based on their
location and preferences. The Salesforce Commerce Cloud enabled Sephora’s European customers
to access unique content, offers, and recommendations based on their previous purchases, whereas,
Salesforce’s Service Cloud was expected to improve customer satisfaction through a personalized
service. The platform was available in Sweden and Denmark and was likely to be released to other
parts of Europe later, beginning with Portugal, Germany, and France.
Digital Educational Content
Sephora discovered that despite product reviews, feedback, and virtual imaging, customers faced
challenges in selecting products that best suited their skin and personality. As a response to this
challenge, the company created online content to educate its customers to enable them to make a
proper, hassle-free confident decision. Sephora’s new innovation, ‘Pocket contour class’, offered
tips and recommendations on the best products as per skin tones. The educational content was also
available on the company’s website, mobile applications. and company catalogs. The company
also launched many YouTube tutorial videos. The number of videos on YouTube increased from
250 in 2016 to 600 in 2017. Sephora also used Snapchat, Instagram, and YouTube beauty videos
to educate customers about its beauty products and the right fit for their skin tones.
Sephora launched “The Beauty Insider Program”, which incentivized loyalty by rewarding every
customer with some ‘loyalty reward points’. The Beauty Insider Program convinced and motivated
the customers to become a part of Sephora’s elite beauty community, and granted them access to
exclusive launches and deals by Sephora. It also featured personalized product recommendations,
beauty services, and free skin care classes or makeover classes.
Concept Stores
Apart from technological advancement and digitalization, the Sephora management also
considered the technological advances in the retail stores of the company. In the US, most of the
Sephora stores were located in malls. To increase footfall at its stores in the malls, the company
opened concept stores. The first concept store came up in Boston over a 2000-square foot area
(half of a typical Sephora store, which was usually 5500 square feet). The stores featured digital
components and also had digital welcome screens showcasing different products and new launches
for its customers. The salesmen as well the employees were equipped with the iPhone7 for mobile
point-of-sale purchases instead of cash registers. The digital screens also displayed Sephora’s
Visual Artist application with a before and after preview. The customers were offered order-in-
store and same-day pick up options in case of online purchases. The concepts store also offered
one-on-one beauty services that included 45-minute makeovers, 15-minute mini facials, and 75-
minute ‘Custom makeover plus’ service.
Dolan said, “Sephora Consumers are looking for retail stores to be creative spaces. They are
looking for experiences. Digital is a critical element in retail – however, it is not just for the sake
of adding new, cool technology. Our intention is to help our clients.”23

23
Natalie Koltun, “Sephora's Virtual Artist app now includes AI-powered color matching,”
www.mobilemarketer.com, June 8, 2017.

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 Sephora’s Digital Journey

TRENDS IN THE BEAUTY INDUSTRY AND CHALLENGES FOR SEPHORA

The Beauty industry had undergone a massive disruption in the 10 years from 2008 to 2018 and
had witnessed a sea change in the buying habits of its customers. The beauty brands too had
shifted from a product-based model to an experience-based model. Ukonwa Ojo, senior VP at
CoverGirl, a US-based cosmetics brand, opined, “New technologies make it easy for beauty lovers
to access trends, looks, content and experiences. Shopping behaviors have shifted towards e-
commerce and specialty versus traditional bricks and mortar. And it is no longer just about beauty
basics like mascara, foundation and lipstick. People want to try liners, contouring and highlighting
products, shadows, glitters, glosses and so much more. The range of choice within brands has
expanded as dramatically as the number of brands themselves.”24
The industry had been affected by the advent of digitalization, digital marketing, and influencer
marketing and the focus was largely on creating long lasting relationships between brands and
their consumers. Stefano Curti, Global President of Markwins Beauty Brand, a US-based
cosmetics company, pointed out in 2018 that, “Half the growth in beauty is online.25
The evolution of technology also brought in new challenges accompanied by new opportunities,
risks, and rewards for various brands and marketers. Digitalization enabled consumers to
experience brands in entirely new ways. A customer opined in 2018, “(Beauty) Consumers are
looking for a fully interactive experience with their cosmetics brands becoming part of their
lifestyle”.26
As a beauty industry veteran, Sephora welcomed digitalization at a nascent stage in its
organizational development. Its use of digital technologies to bring people into its stores served to
influence smaller brands like SK-II Cosmetics27, MAC Cosmetics28, NYX Cosmetics29, and others
to experiment as well. Sephora was also pursuing the expansion of its online presence in countries
like Scandinavia and Mexico and across the Middle East region.
Despite such robust innovations, the company continued to witness challenges from other beauty
brands. For instance, big brands like L’Oréal, a Paris-based cosmetics giant, allocated 30% of their
media spend to digital channels. L’Oréal had also launched its ‘Beauty Squad’ campaign, where a
number of influencers created YouTube videos and articles for its website, social channels, and
their own channels, which tapped into a combined influencer reach of 5.5 million. This meant that
L’Oréal had created the kind of content users were searching for – mainly beauty tips, advice, and
tutorials. Likewise, there were other brands like Ulta Beauty30, Sephora’s biggest competitor since
2011, which used similar technological innovations and were also ahead in their social media
presence (See Exhibit IV for competitors of Sephora).

24
Natalie Koltun, “Sephora's Virtual Artist app now includes AI-powered color matching,”
www.mobilemarketer.com, June 8, 2017.
25
Richard Kestenbaum, “The biggest trends in the beauty industry,” www.forbes.com, September 9, 2018.
26
Georganna Simpson and Edward Craig, How digital has changed cosmetics and what this means for
consumers,” www.campaignlive.co.uk, May 23, 2018.
27
SK-II is a Japanese cosmetics brand founded in the 1980s. Its parent company is Procter & Gamble and it
sells and markets as a premium skin care solution in East Asia as well as North America, Europe, and
Australia.
28
MAC Cosmetics, stylized as M·A·C, is a cosmetics brand founded in Canada in 1984 by Frank Toskan
and Frank Angelo. The company became part of the Estée Lauder Companies in 1998. MAC is an
acronym for Make-up Art Cosmetics.
29
NYX Cosmetics is a cosmetics company that is a subsidiary of L'Oréal. The company was founded in
Los Angeles by Toni Ko in 1999. By 2014, the company sold its products in seventy countries.
30
Ulta Beauty is a chain of beauty stores in the US. It was founded in 1990 in Bolingbrook, Illinois. Each
Ulta Beauty shop consists of a salon. It caters to the beauty segment for men and women in all categories.

9
 Sephora’s Digital Journey

Apart from the beauty brands, the company also faced challenges from large platform players like
Amazon.com Inc.31 (Amazon). By 2018, Amazon had become the second largest marketplace for
buying beauty products online. Amazon’s latest launch of ‘Indie Beauty Shop’32 in June 2018,
made the competition fiercer in the online sales segment for Sephora.
Apart from these digital challenges, the beauty customers’ growing preference for herbal and
Ayurvedic products, which reportedly had minimal side effects, also made the going tougher for
Sephora. International players of herbal companies, like Khadi Naturals33, Forest Essentials34,
Biotique35, and others were popular among the masses as of 2018. However, Sephora’s inclusion
of ayurvedic brands like Herbivore Botanicals, RMS, Tata Harper, and others under its umbrella,
to take on its herbal competitors globally, did minimize the challenge a bit.
But with the beauty industry undergoing a digital push and leading retailers making their presence
felt across different digital channels, the question before Sephora was how to maintain its existing
pace of innovation to remain a beauty trailblazer in the years to come.

31
Amazon.com, Inc., formerly known as Cadabra, Inc., was founded in 1994 in Seattle, Washington. It
offers services in electronic commerce, cloud computing, and consumer electronics. Amazon is the
largest retailer in the e-commerce business with an annual revenue of US$ 177.866 billion in 2017.
32
Amazon.com launched an “Indie Beauty Shop” in June 2018, which included skincare and cosmetics
brands not being sold at retailers like Ulta, Target, or Walmart. Amazon would act as a marketplace for
emerging beauty brands to enter the mainstream by putting their products in front of hundreds of millions
of potential customers.
33
Khadi Natural Healthcare, founded in 1963, is leading manufacturer, exporter, and supplier for Khadi
Natural products. Khadi Natural Health Care exports its products to 25 countries globally and has over 50
authorized seller and distributors.
34
Forest Essentials is a traditional skin care brand, with its foundations in the ancient science of Ayurveda.
It was founded in 2002. It has been expanding since then.
35
Biotique is a part of Bio Veda Action Research Co., founded in 1992. It is one of India's leading
manufacturers and marketers of prestige skin care, hair care, and body care and makeup products.

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 Sephora’s Digital Journey

Exhibit I
Sephora’s Assorted Collection (2018)
A Cinema Secrets First Aid Beauty Kate Spade New York
Acqua Di Parma Clarins Foreo Kenzo
Aerin Clarisonic FORM Kenzoki
Algenist CLEAN Four Sigmatic Keranique
Alterna Haircare CLINIQUE Fresh Kérastase
Amazing Cosmetics Coal And Canary G Kevyn Aucoin
Amika Conture Ghd Kiehl's Since 1851
Amorepacific Coola Giorgio Armani Beauty Kilian
Anastasia Beverly Hills COVER FX Givenchy Klorane
Anthony Crushed Tonic Glamglow Koh Gen Do
Antonym Capri Blue Glo Science Kopari
Apivita Captain Blankenship Glow Recipe Kora Organics
Aquis Carolina Herrera Go-To KORRES
The Art Of Shaving Caudalie Good Dye Youngnew L
Artis Cocofloss Google L'Occitane
Artist Couture Comme Des Garcons Grande Cosmetics La Mer
Atelier Cologne Commodity Gucci Lab Series For Men
Axiology Comptoir Sud Pacifique Guerlain Lancer
B D H Lancôme
Balenciaga Deborah Lippmann Herbivore LANEIGE
Bareminerals Derek Lam 10 Crosby Hermès Lashfood
The Beauty Chef Dermadoctor High Beautynew Laura Mercier
Beautybionew Dermaflash Histoires De Parfums LAVANILA
Beautyblender Dermarche Labs Hourglass Lawless
Becca Devacurl Huda Beauty Lightstim
Belif Diamancel Hum Nutrition Lilah B.
Benefit Cosmetics Dior Hush Living Proof
BERDOUES Disney Collection I Lord Jonesnew
Bésame Cosmetics DOLCE&GABBANA Igk Lxmi
Bio Ionic Dominique Cosmetics Iles Formula Lilly Lashesnew
BIOEFFECT Donna Karan Ilia M
Biossance Dphue Iluminage Madam C.J. Walker Beauty
Bite Beauty Dr Roebuck's INC.Redible Culture
Bkr Dr. Brandt Skincare Indie Lee Madison Reed
Black Up Dr. Dennis Gross Invisibobble Maison Louis Marie
Blendsmart Dr. Jart+ Isle Of Paradise Maison Margiela
Blinc Drunk Elephant Issey Miyake MAKE UP FOR EVER
Blinking Beauté Drybar IT Cosmetics Makeup Eraser
Blithe Dtrt It's Skin MARAJÓ
Bobbi Brown Duo J Marc Jacobs Beauty
Boscia Dyson J.One Marc Jacobs Fragrances
Briogeo E Jack Black Mario Badescu
Bumble And Bumble Earth's Nectar Jimmy Choo Marvis
Burberry Edible Beauty JO LOVES Mdsolarsciences
Buxom Eight & Bob Jo Malone London Michael Kors
BVLGARI Elizabeth And James John Varvatos Milk Makeup
By Rosie Jane ELLIS BROOKLYN Josie Maran Miu Miu
C Erborian Jouer Cosmetics Montblanc
Calvin Klein Erno Laszlo Juicy Couture Moon Juice
Cane + Austin Estée Lauder Juliette Has A Gun Moroccanoil
Cellu-Cup Etat Libre D'orange K Moschino
Chanel Eve Lom Kaja Mount Lai
Charlotte Tilbury Evian Kane NY Mugler
Chloé F KAPLAN MD Murad
Christian Louboutin Farmacy Kari Gran N
Christophe Robin Farsáli Kat Von D Nails Inc.
Ciaté London Fenty Beauty By Rihanna Kate Somerville Narciso Rodriguez

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 Sephora’s Digital Journey

Nars Qhemet Biologics Proraso Shaveworks

Natasha Denona P R SHHHOWERCAP
Naturally Serious Paco Rabanne Rag & Bone Shiseido
Neogen Dermalogy Pat Mcgrath Labs Rahua Sk-Ii
Nest Fragrances Peace Out Ralph Lauren Skin Inc Supplement Bar
No Mo-Stache Perricone Md Ren Clean Skincare Skin Laundry
NUDESTIX Peter Thomas Roth Retress Slip
Nuface Philosophy Reverie Smashbox
Nurse Jamie PHLUR Rita Hazan Sol De Janeiro
O Pink Sugar Rms Beauty Son & Park
O&M PINROSE Rosebud Perfume Co. St. Tropez
Obagi Clinicalnew PLAY! By SEPHORA Rossano Ferretti Parma Stella Mccartney
Olaplex Playa S Stellar
OLEHENRIKSEN PMD Sachajuan Stila
Omorovicza Prada Sand & Skynew Summer Fridays
The Ordinary Pretty Vulgar Saturday Skin Sunday Riley
Origins Primary Raw Seed Phytonutrientsnew Supergoop!
Ouai Private Doctor Sephora Collection Surratt Beauty
Ouidad Proactivnew Sephora Favorites
Source: ttps://www.sephora.com/brands-list

Exhibit II:
Social Media Presence (2018)

Source: https://craft.co/sephora/competitors

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 Sephora’s Digital Journey

Exhibit III:
Sephora’s Twitter Followers (2018)

Source: https://craft.co/sephora/competitors

Exhibit IV:
Competitors of Sephora (2018)
Revenues (2017)
Company Description Valuation
in USD
Macy's, an omni-channel retail
organization, operates stores,
Macy's 9.2 billion 24.8 billion
websites, and mobile
applications. Estd. 1858
Nordstrom is an online fashion
retailer offering apparel, shoes,
Nordstrom cosmetics and accessories for 7.9 billion 15.5 billion
women, men and children. Estd.
1901
ULTA Beauty is a beauty
Ulta beauty 14.4 billion 5.9 billion
retailer. Estd. 1990
Lush Fresh Lush is a manufacturer and
Handmade retailer of fresh handmade 63.374 billion
Cosmetics cosmetics. Estd. 1995
Source: https://craft.co/sephora/competitors

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 Sephora’s Digital Journey

Suggested Readings and References:

1. “Sustainability challenges facing the cosmetics and personal care industry,” www.hps-
pigging.com, December 2018
2. Richard Kestenbaum, “The biggest trends in the beauty industry,” www.forbes.com, September
9, 2018
3. “Global cosmetics market 2018 – industry analysis, size, share, strategies and forecast to
2025,” www.marketwatch.com, September 4, 2018
4. Allana Akhtar, “4 things you should never buy at Sephora,” http://time.com/money, August 28,
2018
5. Pamela N. Danziger, “Sephora, Ulta and the battle for the $56b US beauty retail market,”
www.forbes.com, August 6, 2018
6. Aishwarya Tyagi, “Is hyper reality the future of the beauty industry?,” www.khaleejtimes.com,
August 3, 2018
7. Elliot Maras, “Sephora shares tips, insight on crafting a retail customer personalization
strategy,” www.retailcustomerexperience.com, May 04, 2018
8. “Sephora named Retailer of the Year,” www.lvmh.com, April 25, 2018
9. Veronica Sonsev, “How Sephora makes beauty a two-way conversation,” www.forbes.com, April
12, 2018
10. Lewis Leong, “Sephora’s omni-channel marketing strategy shows why having a mobile app
isn’t enough,” blog.applovin.com, April 10, 2018
11. “What retailers can learn from Sephora’s winning strategy,” www.thestorefront.com, April 2018
12. Zivile Barkauskaite, “Beauty 4.0. How to solve key challenges in the beauty supply chain with
innovation,” trans.info, March 30, 2018
13. Lucy Whitehouse, “Sephora dominating online, while Ulta leads in-store: new report,”
www.cosmeticsdesign-europe.com, February 08, 2018
14. “How Sephora integrates retail & digital marketing,” etailwest.wbresearch.com, February 19,
2018
15. Gina Acosta, “For Sephora, experience matters,” retailleader.com, December 7, 2017
16. Cara Salpini, “30 minutes with Sephora’s head of marketing,” www.retaildive.com, November
29, 2017
17. “No longer one single shade: Sephora and the beauty industry,” rctom.hbs.org, November 15,
2017
18. Lucy Whitehouse, “6 top sustainability challenges the beauty companies need to know about,”
www.cosmeticsdesign-europe.com, October 24, 2017
19. “Deep Dive: Channel Shifts in US Beauty Retailing–Sephora, Ulta and Amazon Carving
Greater Share,” coresight.com, August 18, 2017
20. Harmeet Singh, “Retail innovator of the year: Sephora,” http://strategyonline.ca, May 05, 2017
21. Lydia Gordon and Hannah Symons, “Digitise to Humanise: What can the beauty industry learn
from Sephora?,” blog.euromonitor.com, March 11, 2017
22. Issie Lapowsky, “How cosmetics giant Sephora plans to survive retail in a digital age,”
www.wired.com, January 8, 2014
23. Lauren Sherman, “Inside Sephora’s branded beauty strategy,” www.businessoffashion.com,
September 24, 2013
24. “LVMH to acquire 100% of Sephora,” www.freelibrary.com, July 23, 1997
25. “Sephora use mobile at every turn to enhance their customer’s shopping journey both online
and in-store,” www.eshopworld.com

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