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Trivedi Sephoradirect

Trivedi Sephoradirect
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    SEPHORA DIRECT: INVESTING IN SOCIAL MEDIA, VIDEO, AND MOBILE MKT   6301 MITALI TRIVEDI GLEMBA2020 Prof: Maria Albrecht FEBRUARY 12, 2019  1 Executive Summary The case talks about Julie Bornstein’s (vice president Sephora Direct) plan to convince President and CEO David Suliteanu to double up the marketing and social media budget in 2011. To be able to convince Suliteanu, Bornstein must define the KPIs and optimal marketing mix. The team also needed to identify what they will gain from “winning”.  To start with she was referring to the increasing number of “ fans ”  on the Sephora Facebook page and numbers of downloads of Sephora's new iPhone application as a success metric of Sephora Direct’s marketing efforts. The target group of Sephora is 25 to 35-year-old ladies of which 43% are more inclined to digital media than print. But Bornstein knew about big opportunities in a mobile expansion, shopping program participation and much more. The site visits to had increased by 37% in 2010 as compared to the year 2009(  Exhibit 1 ). This percentage increase has contributed to net sales growth. The biggest challenge was with so much to explore in a limited time and to be ready for the budgeting meeting with LVMH in 10 days. Bornstein and her team had to come up with a plan to determine what would be a win if the budget was doubled. Also, how do they plan to retain the current customers on the digital platform with recent gamers like Groupon and Shop Socially. All this in time to present and discuss with Suliteanu before the budget meeting with LVMH. She was also aware that the increased budget to digital marketing would mean a reduction in the budget for traditional marketing.  2  Exhibit 1: Background Summary Sephora is Paris, France based multinational chain of personal care and beauty store founded in 1969. Sephora had started as a single perfume shop growing into multiple shops with “assisted self- service” environment. The founder Dominique Mandonnaud’s concept w as to break from the traditional departmental store setting where the sales representative would push products to customers for a sales commission. At Sephora ladies would try multiple brands of perfume before purchasing. Mandonnaud continued Sephora’s exp ansion and was operating 54 perfume stores after rebranding in 1993. It was under LVMH’s ownership that Sephora expanded beyond the perfume into other cosmetics and entered the US market with its first store opened in New York in 1998. Brands like Clinique, Estee Lauder would consider Sephora a niche player and refused to supply to its stores which were in close proximity to departmental store. Sticking to  3 Sephora’s founder's policy they started to fill up the shelves in store with cosme tics from lesser known brands and encouraged young women to come and try makeup but not be obliged to buy it. They also hired noncommissioned employees who would not push a product to the client for a commission . This concept of “assisted self-service" was new to the US market and very shortly Sephora builds relations with hundreds of customers. Over time the prestige cosmetic brands started supplying to Sephora. By 2010 Sephora had 450 stores only in the US and Canada and its products were prestige brands and perceived as upmarket than the regular drugstore brands like Revlon and Maybelline. Sephora has always been a step ahead with new marketing trends, so it did the same with the proliferation of smartphones and other digital devices. The traditional marketing and digital marketing teams at Sephora have work hand in hand to keep up with the digital world. The beauty store’s mobile application has been creating groundbreaking content on its intuitive Sephora app and on social media to bring Sephora’s exper  tise to our clients whenever and wherever they want. is the foremost prestige beauty site on the internet engaging clients in an inclusive beauty community. Sephora had launched a loyalty program in 2007, which is considered as one of the most successful programs in the category. ULTA is the closest competitor to Sephora but as Borns tein describes ULTA is a “fast follower”.   Analysis SWOT Analysis: A SWOT analysis is a management tool that accesses the strength, weakness, opportunities, and threats to a business. For the case here, the strengths and weaknesses are considered as internal to Sephora. Opportunities and threats are external factors.  4 Positive Negative Internal Strengths: -   An industry leader in creating a digital presence. -   High customer involvement -   Maintained Cohesive brand image. -   Smart loyalty program. Weakness: -   Low presence in emerging economies. -   Expensive products. External Opportunities: -   Expand the target age group. -   Enhance digital marketing. Threats: -   ULTA operates in a business model like Sephora. -   Growing market share of online stores like and Table 1: Sephora SWOT Analysis Table 1 above lists the strengths and opportunities as the positives. Weakness and threats as negative. Sephora since its launch in 1969 has always made sure that their in-store experience is unparalleled, which it continued with the introduction of its online store in 1999 followed by a
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