1. Sephora: Market Analysis Report
Mckenzie Dagan, Sarah Nirschl, & Katie Trefz

2. Product Category Audit Beauty Retailing
Billion dollar industry and growing
Projected to reach $50 billion by 2019
Mintel Reports: Beauty Retailing JAN 2016

3. Key Trends of 2016
Experiential technology: Digital retailing and technology are reshaping the beauty industry
Neo Marketing & Media: Moving away from traditional marketing
The Millennials: Experiences are the biggest found trend and brands creating experiences are creating emotional brand loyalty.
Niche to Mainstream: According to Kline, the US brand retailing industry is worth $43 billion with a 3% annual growth rate. Increasing the niche market is changing competitive landscape.
Neo-Marketing is marketing through the use of social media platforms.
Skin Care Blog Trends DEC 2016

4. Reasons for purchase
Replacing & replenishing products regularly accounts for over half of reasoning for consumer purchase
Mintel Reports: Beauty Retailing JAN 2016

5. Reasons for purchase External factors
While the clothing retailing industry may have seen a dip last year, the beauty retailing industry is flourishing. Popularity of luxe cosmetics seems to be fueled by multiple factors:
Steady stream of new makeup trends
Growing purchasing power of millennial shoppers
“Kim Kardashian Effect”: reality TV stars and social media queens are drawing attention to new makeup techniques (i.e. contouring, strobing, etc.)
Washington Post: Women splurging on this

6. Changing Landscape eCommerce changing ‘Beauty Retailing’ landscape
Online shopping appears to be on the rise
Amazon & specialty retailers (Ulta, Sephora) now have same percent of buyers at 7%.
Mintel Reports: Beauty Retailing JAN 2016

7. Changing Landscape
Overall feeling of skepticism isn’t stopping people from buying big brand. What is impacted is the belief that one brand is the answer to everyone’s problem.
Door is opening wider to niche markets; smaller brands are seeing growth (i.e. NARS, Too Faced)
Traditional sales associates are being phased out: Buyers like being able to experience things in their own hands and research before they buy
Racked: The Way We Buy Beauty Now OCT 2016

8. Beauty Product Segments
Color cosmetics have accounted for the biggest percent of market share
The smallest revenue came from sunless tanners in 2015
Mintel Reports: Beauty Retailing JAN 2016

9. Beauty Retailing Analysis

10. Sephora Brand Audit Strengths and Weaknesses
Brand reputation
Product quality
Open shelf environment
Beauty Insider Rewards
Weaknesses:
Price
Unavoidable competition
Difficulties of adaptation
Brand recognition
Brand reputation is a strength because of the quality and longevity of their products but brand recognition is a weakness because Sephora sells the same brands as their competitors. Sephora’s competitive advantage of an interactive approach, their services, and their rewards program help them maintain their reputation as a company.
Mintel Reports Beauty Retailing January 2016

11. Audience/Target Market
Females
Millennials
Fashion- conscious
Beauty-conscious
Higher income
InfoScout: Sephora Shopper Insights and Demographics

12. Primary products/services
In Store Beauty Makeovers
Beauty Classes
Color IQ, Fragrance IQ, and Skincare IQ
Products:
Makeup
Skincare
Fragrance
Bath/Body
Nail
Hair
Tools/Brushes
Men
Sephora Let’s Beauty Together:

13. Competition Ulta L'Oréal. M.A.C. Macy’s Nordstrom Birchbox Target
Bluemercury
Amazon
Mintel: Beauty Retailing January 2016

14. Brand personality/ strategy
Black, white and red colors throughout their stores and website designs.
Clean brand image that represents their luxury products
Approachable friendly brand image through customer service
Provide limitless samples to customers
Beauty TIP (Teach, Inspire, and Play) Workshop

15. Competitive advantage
Dedication to interactive approach:
Digital Innovation
Teen Makeup Class
Classes for Confidence
Sephora Beauty Insider program
Beauty Studios
Sephora’s Visual Artist app
Color IQ, Skincare IQ, Fragrance IQ
Sephora is very dedicated to an interactive approach. Sephora launched a Teen Makeup Class in September 2016 that helps teenagers find products that best fit their needs.
Sephora also announced a “Classes for Confidence” series, where they partner with local non-profits in order to help women who are re-entering the workforce become more confident.
Sephora also launched a Visual Artist App where users can upload a picture and add lash and lip colors.
Color IQ, Skincare IQ, and Fragrance IQ also help make customers experience more customizable and interactive. Making sure their customers are wearing the appropriate shades helps build customer relationships.
Social Media for Managers:

16. Social Platforms Facebook: @sephora Instagram: @sephora
Google
YouTube: Sehora
Tumblr: theglossary.sephora
Snapchat: sephorasnaps
Pinterest: Sephora
sephora.com

17. Facebook Page Likes: 15,266,442 Followers: 15,061,638
People Talking About Sephora: 54,946
Average Like: 2,878
Average Share: 147
Average Comment: 59
Average Engagement: 3,085
Engagement Rate: .02%

18. Facebook: Sentiment Positive towards brand image Mixed on products
Negative towards customer service
Facebook is where consumers go to get questions and feedback. This includes complaints to Sephora itself, as well as having conversations with other consumers. Currently there is a lot of conversation about Sephora’s #NeverStop campaign. The mass of Sephora’s following is very supportive of the campaign highlighting self confidence and acceptance. There is a mixed sentiment towards Sephora’s products on Facebook, while some people love the bold styles like blue lipsticks, the “haters” are very present on Facebook. Sephora does have some issues with customer service that is highlight on Facebook more than any other platform.
mention.com

19. Twitter Followers: 2.15 Million Tweets: 68.1K Average Favorite: 160
Average Retweet: 16
Average Response: 2
Average Engagement: 178
Engagement Rate: .008%

20. Twitter Sentiment Mixed on customer service Positive on brand
Positive on products
Overall the sentiment on Twitter is better than Facebook, primarily because people are not using Twitter to talk to Sephora, but rather about Sephora. Typically, people are going to Twitter to rave or rant about their experience with Sephora and Sephora products.
mention.com

21. Instagram Followers: 10.3 Million Posts: 2,535
20% Higher engagement on product only pictures
Avg. Favorites: 46,314
Avg. Comments: 143
Avg. Views: 205,724
Avg. Engagement: 46,457
Engagement Rate: .45%

22. Instagram Sentiment Positive towards brand Positive towards product
Neutral towards customer service
The sentiment on Instagram is extremely positive. The hatred towards products seen on Facebook are non-existent on instagram. People are extremely supportive of the empowerment campaign #NeverStop, as well as Sephora products, and the brand as a whole. People do not use instagram to gain assistance from Sephora so customer service is not mentioned.
instagram/sephora