#WRC2019: Sephora uses stores to build customer relationships

Physical stores are playing a vital role in helping Sephora build valuable relationships with customers and not used as simply selling tools as it builds ecosystems around the world.

Speaking at World Retail Congress in Amsterdam, Christopher de Lapuente, CEO of Sephora, said: “We’re building an ecosystem of stores and eCommerce with people going back and forth. If they choose not to buy today in store then they might come back another day and also maybe tell their friends. It’s all about the experience in the store. At the end of the day we are here to sell but we want to have a great relationship with customers.”

He acknowledged that many people feel intimidated by the selection of up to 300 beauty brands in store, and this is where the shop floor employees come into play: “They listen and hopefully advise well and customers come back. We hope to build a brand people trust. Yes, it needs sales and profits but it also needs this relationship.”

Evolving product mix

Such advice is made even more made valuable by the constantly evolving product mix, with de Lapuente revealing that 25% of a store’s SKUs are new within a 12-month period. The introduction of new lines is one of the strengths of Sephora and it continues to launch independent brands.

“We start them in one market and then, if successful, we look to share with other markets. We’ve many brands that started as nuggets in one market. We can manage the risk this way,” he explained, adding that such launches are now impacted by ‘influencers’.

“Some have done extremely well. It’s down to the number of followers they have but we also sit down with them and do what we call an ‘in the kitchen with the founder’ where we get to know them. We do lots of experiments and some go gangbusters while others are more of a slow burn,” added de Lapuente.

Some of these launches have involved celebrities although he pointed out that the key aspect is authenticity and the celebrity has to have credibility and it is not simply about them receiving a big cheque.

Great care is taken with how customers are introduced to these many new products. Sephora prefers to “help customers discover new products” and not bombard them with communications. Instead it uses the shoppers’ previous buying behaviour in order to create more personalised, relevant messaging.

Expansion plan

Sephora is currently in 34 countries and the plan had been to dramatically expand around the world when de Lapuente joined the business nine years ago. But this was curtailed in favour of prioritising the building of greater markets shares in existing countries.

“We discovered that launching a multi-brand retailer in a country is hard as you need to build a culture. We decided we did not want to chase new stores in new markets. We are now doing two new markets per year - with Hong Kong and Korea this year,” he explains.

De Lapuente acknowledges that eCommerce can provide a cost effective entry into a new market but he says the preferred route for Sephora is to continue to build omnichannel ecosystems of physical stores and an online presence.