3 Essentials to Success for Popular Cosmetics Retailer
One of my favorite fantasy adventures is located at my local mall (along with being a fantastic brand strategy example). It is not the sequel to the blockbuster movie Avatar, a Dungeons and Dragons role playing event or even a Lord of the Rings-themed escape room.
It is the cosmetics and skincare retailer Sephora. The name “Sephora” itself speaks of extraordinary possibilities; it is the Greek spelling of Zipporah, the beautiful wife of Moses in the Book of Exodus. Its biblical connections seem appropriate, given the miracles promised by the makeup, perfume, and skincare that they sell.
What impresses me the most about this savvy retailer is its ability to increase its own brand importance while meeting other corporate goals, namely supporting its sister brands of LVMH and advancing societal issues like climate change awareness and minority-owned brands.
1. Brand Strategy Example: Building the Global Presence
Sephora’s growth began in 1993, with the merger of Sephora and a French perfume chain owned by Dominique Mandonnaud. Sephora differentiated itself by:
- offering “test samples” for customers to try the product before purchase
- using “assisted self-service” which provided the best of both worlds – unlimited browsing and sampling combined with expert sales assistance if desired
In 1997, Sephora was sold to the luxury goods conglomerate, LVMH. LVMH has grown Sephora to over 2,600 stores in 35 countries and expanded their product offering to include beauty and cosmetic products.
2. Brand Strategy Example: Brands Within the Brand
Sephora is part of the Specialty Retailer group at LVMH, where it supports the second and fifth of six pillars in LVMH’s operating model: vertical integration and creating synergies. Sephora supports other LVMH brands as their point of distribution. LVHM brands Fenty Beauty by Rhianna, Make Up Forever, and Marc Jacobs Beauty can be found at Sephora.
Plus, the private label brand, Sephora Collection, covers a wide range of beauty products. Priced above the drugstore brands like Maybelline but below premium brands like Bare Minerals or Tarte, the Sephora Collection offers a multitude of choices for products and colors. Moreover, the Sephora Collection supports the overall brand by offering a “luxury illusion” brand that is priced to meet more budget-conscious consumers. Some will continue to buy only the Sephora Collection but other consumers will graduate to the more expensive brands that dominate the square footage.
3. Brand Strategy Example: Cashing in on the Equity of Others
Sephora is a brand strategy example of a retailer who not only manages its own brand but uses the brand awareness, benefits and equity of the products they sell to support the Sephora brand. Some brands provide special benefits like clean ingredients (Tower 28, Kosas, Saie) or are vegan (Bite Beauty, Rare Beauty by Selena Gomez). Other brands support societal issues like Black-owned companies (Shani Darden Skin Care, adwoa beauty, Briogeo) or woman-owned (Benefit Cosmetics). And, many more brands simply add to the luxury brand ethos.
Brand Strategy Example: Success
Sephora is one of the most successful brand management retailers with its focus on using a diverse range of brands to build an overall brand ethos. Combining its high-end owned brands with private label and other unique benefit brands allows it to build a multi-dimensional brand with wide appeal while staying true to its luxury brand vision.
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Connie Lopez / About Author
Connie Lopez brings more than 18 years of consulting and entrepreneurial experience to Insight to Action with a focus on strategic competitive analysis, market clearing demand-price analysis, acquisition strategy, process improvement and market segmentation. Her experience encompasses the business to business industries of building materials, automotive, media and construction equipment and the consumer focused industries of financial services and packaged goods.
As an expert in brand strategy, I appreciate the insights shared in the article by Connie Lopez about Sephora's success. The evidence presented in the article demonstrates a profound understanding of Sephora's brand strategy and its impact on the cosmetics retail industry.
1. Global Presence and Differentiation: The article emphasizes Sephora's strategic approach to building a global presence. It highlights the pivotal moment in 1993 when Sephora merged with a French perfume chain and implemented innovative strategies like offering "test samples" for customers and employing "assisted self-service." These initiatives allowed customers to try products before purchasing, combining the benefits of browsing and sampling with expert sales assistance if needed. The mention of the 1997 acquisition by luxury goods conglomerate LVMH and subsequent global expansion to over 2,600 stores in 35 countries underscores Sephora's successful growth trajectory.
2. Brands Within the Brand: The article delves into Sephora's role within the LVMH conglomerate and its support for other LVMH brands. It outlines Sephora's position in the Specialty Retailer group, contributing to LVMH's operating model of vertical integration and creating synergies. Notably, Sephora serves as a distribution point for other LVMH brands such as Fenty Beauty by Rihanna, Make Up Forever, and Marc Jacobs Beauty. The creation of the private label brand, Sephora Collection, is highlighted as a key strategy to cater to a wide range of consumers, offering products at various price points and appealing to budget-conscious customers while maintaining a "luxury illusion."
3. Cashing in on the Equity of Others: The article skillfully discusses how Sephora leverages the equity of the products it sells to reinforce its own brand. Various brands with unique selling points, such as clean ingredients, vegan formulations, or a commitment to societal issues, contribute to the overall luxury brand ethos of Sephora. By aligning with brands that offer special benefits and support societal causes, Sephora enhances its brand awareness and equity.
4. Overall Success and Brand Ethos: The conclusion drawn by the article emphasizes Sephora's success as a brand management retailer. The ability to combine high-end owned brands, private label products, and other unique benefit brands allows Sephora to build a multi-dimensional brand with broad appeal while staying true to its luxury brand vision. This success is attributed to Sephora's focus on a diverse range of brands, contributing to the overall brand ethos.
In summary, the article provides a comprehensive analysis of Sephora's brand strategy, backed by historical events, strategic decisions, and the successful execution of key initiatives. Sephora's ability to adapt to industry trends, support sister brands, and leverage the equity of products it sells showcases its expertise in brand management within the cosmetics retail landscape.
