Sephora and Sephora.com
The Business Model
Sephora was first founded in 1969 at France. It was opened as a speciality perfumery retail shop. It was considered as a pioneer in retail due to the way Domique Mondonnaud designed and operated. In July, 1997, Louis Vuitton Moet Hennessy Group acquired Sephora and had turned it into one of the leading store in cosmetic, fragrance and toiletry industry.
Sephora department store are well – known for is distinctive store layout and delivers high – end beauty care to customer. Sephora’s open – sell retail philosophy offer customer the freedom to mix and match from a vast range of product offer in store. Customers also “look forward to an exciting experience with entertaining animation events and trendsetting service.” (The LVHM Annual Report, 2013, pg. 101)
“Sephora is highly regarded as a beauty trailblazer, thanks to its unparalleled assortment of prestige products, unbiased service from experts, interactive shopping environment, and innovation.”, according to Sephora’s website (“About Sephora”, 2014). Nowadays, Sephora recognized worldwide and below is figure that illustrate Sephora’s operation:
• 1,541 stores in 27 countries internationally
• 300 base store in North America .
• Sephora carries over 17,000 products from over 250 brands.
(source: The LVMH Annual Report, 2013)
Sephora is listed as selective retailing branch according to The LVHM Annual Report, 2013. Its operating and services activities are as followed:
• Individual department store.
• Sephora inside JC Penny store since October, 2006. (JC Penny is one of the major retailer which is popular in North America suburban)
• Online shopping channel: Sephora.com
• Recently, Sephora successfully launch mobile app: “My Sephora”...
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... the basis of group age as Sephora offers a variety of product to women and men between 15 to 70 year of age. However, due to the maturity of Australia Industry Life Cycle, it is suggest that Sephora should target two particular age groups:
• People from the age of 45 to 55+:
The age group of 45 to 55 accounted for 25 percent of the industry total revenue of $3.6 billion. With just 3 percent different, people from the aged group of 55+ considered as a major markets for Sephora. Currently, there are over 7.2 million people aged 50+ (around 32 percent of Australia total population). And within the next five year period, the industry anticipated an increase of 2.4 percent within this population. The people in this age bracket also have a significant purchasing power hence, they are considered as the largest consumer – buying group.
• People from the age of 25 to 44:
Macy’s intended to deliver enhanced shopping experiences to its consumers through dynamic department stores and online sites. In this regard, the company developed a North Star strategy that allows it to improve its sales growth and to develop its existing core activities. The company’s consumer research monitors, analyze and anticipate their needs and wants based on the changing market trends. This allows it to strengthen its customer base and also helps it in identifying new markets and customers. Macy’s also identifies different styles and designs based on various occasions and events that allow it to capture the changing preferences of its customers. The company also celebrates various iconic events to interact with its customers which
Kohl’s also boasts a loyal customer base and strong brand equity. These strengths are critical to offset their weaknesses. Flaws include an imbalance on sales for men’s products and a lacking online presence. (Kohl's Corporation, n.d.) Another way that Kohl’s is actively counterbalancing their negatives is by capitalizing on opportunities. Kohl’s has found that their beauty sections are an immense source of opportunity. As a result, the company is expanding those departments in an effort to capture those sales that would otherwise go elsewhere. (Wahba, 2014) Finally, Kohl’s keeps the knowledge of their threats at the forefront of their decision-making. They understand that their coupon system can be abused and cause profit losses. They also recognize that price wars in their industry can also be very damaging. As a result, they are working towards more secure methods of offering savings and strategically making efforts to remain the leader for price setting. (Wahba,
Provides a unique atmosphere - Their large open stores, packed with designer brands, gives an elegant feeling, with light colored walls that can’t be found at your local drug store. Also, with a low-pressure sales strategy they provide a very relaxed shopping experience.
The company first needs to collect demographic and geographic information relevant to potential store location choices in order to segment its market. It is extremely important that the marketing team gather thorough information in order to ensure they are focusing efforts in areas where the company’s products will be best received. This will help them in achieving maximum sales.
Ron Johnson spent a great deal of time and money to promote his ideas of “stores-within-stores” by turning floor space into an area to house several branded boutiques. He did this in order to attract a target market of a wider demographic which includes age, gender, and generation. One of the m...
After co-branding the Macy’s name with local Federated stores in 2003, the Macy’s division became the central focus for revamping. Federated descri...
Locations average 10,000 square feet, and are a major hub for all things beauty, including cosmetics and unique salon products and services. The company claims its store layouts and wide array of merchandise and full service salons separate itself from online retailers like Amazon and generalist retailers like Target and Walmart. By snagging market share from competition, Ulta has been able to attract a new and highly lucrative demographic. Teenagers have been increasingly shopping in stores and are attracted to some of the new indie and trendy lines of beauty products. As Ulta keeps up with the latest styles, teenagers will continue to flock to stores.
The Stefani B Collection should come up with a segmentation process. The following factors that should be in the process contain the following: sustainability, measurability, accessibility, serviceability. Sustainability is about ensuring a large enough customer base to make sufficient sales and profit. The brand should also consider the potential for future growth. It is important to connect with the customers, having a variety of merchandise that keep customers interested. Next, measurability is thinking of the store’s size and buying power. An example of this would be thinking of a high school coming in to match jewelry with their prom dresses; how many high school seniors attend that school or what is the average income of families
Macy 's strategy is to provide a "localized merchandise offering and shopping experience to targeted consumers" (Macy 's Inc., n.d.). Macy 's generates primary revenue through the sale
Sephora has started its digital presence in the year 1999 with the launch of its website, “Sephora.com” and pioneered in the digital and beauty retail business. With around 3 million visitors per month to its website, Sephora has not put a single step wrong in its marketing strategy. The introduction of Sephora Beauty Insider program in 2007 followed by the Customer Relationship Management programs, the number of online customers have been exploded in multi-fold across Sephora’s online channels. Although Sephora was known for its in-store experience, the shear increase in the number of customers on its online portals had almost blacked out the online system in the holiday season of 2014. This led many of its Asian loyal customers
1947: The first store opens in Västerås, Sweden, selling women’s clothing. The store is called Hennes
Makeup has many different purposes, and large companies like Sephora, divide these makeup products into different categories that concern individual needs. Cosmetic stores like Sephora have specific products for different types of skin. Some for oily, dry, combination, acne prone, or scarred skin. Hundreds of makeup brands specifically design their cosmetics to fulfill the needs of their clients, and a huge need in the world today deals with
Dior uses different market segmentations to sell their product. First of all, there is a geographic segmentation. Perfumes are luxury products. Thus, they target wealthier areas like North America, Western Europe, Japan, etc. Since Dior is popular worldwide, we can obviously find it everywhere, but their market is based on these areas’ needs. Then, they use demographic segmentation. They target adult women who have quite high incomes. Perfumes are something not everybody can afford. This fragrance can be worn for any occasion, special as well as regular; it is light but demonstrates personality and feminity. They are trying to get a medium to strong loyalty status. As for any perfume, if a woman likes it; she will probably buy it again. It is a very accessible product. Any store like Macy’s, Nordstrom or Sephora in North America or “perfumeries” in Western Europe will sell J’adore. The segment is very large, because many people, even if they do not fall in one category, will buy perfumes for special occasions, like Christmas. This is a gift that always makes a woman happy, and Dior develops its marketing around that. Indeed, during Christmas, they make a lot of offers that combines a lotion with the perfume for example. Also, there are no separate segments between women; all women want to wear perfume.
In a simple way, the retailer needs to create a warm, friendly and an approachable retail space to attract consumers.The visual displays is an imperative element of branding of any store. If the stock is presentable, it is bound to appeal to the shoppers. If the shoppers appreciate the store layout and product, they are likely to spend more time in the store, and in return reward the store with sales. Along with the products for sales, the staff, the décor, the store interiors, the trial rooms arrangement, the lightings and music also form an inclusive elements boosting store sales. (fibre2fashion, 2008)
Fragrance is a big industry which purpose has evolved through out many decades. According to Los Angeles Times, in the United States it is a $3.7- billion industry where women are the biggest consumer. Studies have shown that in average people apply 12 different aroma products a day. Today the scent is made to last for a very long time and it’s made with chemicals that create this pleasant aroma. Back in the history the main purpose of fragrance was to attract one person to another. However, now with many satisfying scents available to consumer, we can create out perfect aroma. Such fragrances can be found in your home, skin care products, perfumes, and colons. Every person has different sense of scent; someone has specific scents that remind him or her of childhood. Other people like freshly baked cookies, flowers, or scent of pinewood. In the early 20th century aroma products were designed toward youthfulness and physical appearance through out fragrances. Then, to a more mature and sophisticated women, which lead to a provocative pinups decade. In our society, fragrances became more accepted by the middle class and increased popularity in American bathroom.