Abstract
This article discusses the Sephora’s marketing strategy by applying the 7-P marketing mix framework. The comprehensive analysis covers all key aspects, including- STP analysis, competitor analysis, product mix, pricing strategy, distribution strategy, promotion mix, and people, process and physical evidence strategy.
The article is useful for anyone interested in exploring the marketing strategies of fashion industry. Strategic marketing students, teachers and researchers can also read the article to get insights into how beauty companies like Sephora market themselves to secure strong positioning in competitive market.
1. Introduction
In the 2023 global rankings, Sephora secured the 245th spot, and shined as the 29th top contender in the retail industry. This article tries to decode the company’s success code by exploring Sephora’s marketing strategy.
To know basic company information, click here.
2. Sephora marketing strategy
The article discusses the Sephora’s marketing strategy based on 7-P marketing mix framework:
2.1. Sephora product strategy
Sephora’s cosmetics marketing strategy holds central importance in its comprehensive marketing mix:
2.1.1. Sephora product mix
Sephora has a wide product mix that meets the needs of diverse customer base, ranging from- skincare and makeup enthusiasts to customers following the changing beauty trends. High product quality, combined with extensive collection contribute to the Sephora’s leading position in makeup market:
In 2022, Sephora achieved 1st rank in list of hottest beauty retailers in USA
2.1.2. Product variety
Sephora’s wide product variety caters broad audience. Currently, Sephora offers more than 340 curated brands and 45,000 beauty products. Sephora core values- inclusivity and diversity reflect into its diverse product range.
Sephora also offers in-store beauty services. In 2017, Sephora gave a strong boost to its in-store services through mobile booking.
2.1.3. Sephora target market
Following table presents the information about Sephora segmentation, targeting and positioning:
| Sephora segmentation | Sephora target market | Sephora positioning strategy | |
| Demographic | Age, gender and income | Urban Gen Z and millennials Fashion conscious and passionate about beauty Follow latest beauty trends | An ultimate destination for the beauty experimentation and exploration, bridging the gap between a high class departmental store and a mundane drugstore |
| Psychographic | Beauty interests and lifestyle | ||
| Behavioral | Brand loyalty and shopping frequency | ||
In 2020, Sephora launched a body confidence film to unveil its ‘evolved’ brand positioning. To know more, click here.
2.1.4. Sephora competitive advantage
- Sephora competitive advantage lies in its unparalleled assortment of diverse beauty products from both- emerging and well-established brands.
- Sephora unique selling proposition is- “a destination where customers can discover, explore, and experiment with the beauty products”.
- Another key factor that differentiates Sephora is its immersive, instore experience.
Click here to know the Dior’s unique selling point
2.1.5. Sustainability initiatives
Sephora has successfully set its brand image as a socially responsible brand. The eco-friendly packaging augments the product value. Currently, Sephora has 19 sustainable and eco-friendly make-up brands.
In 2023, Sephora partnered with Pact Collective to roll out its recycling program at around 600 stores across Canada and USA.
2.1.6. Key lessons learned
- Diverse product portfolio catering needs of broader audience
- Immersive instore experience
- Emphasis on overall product consumption experience
2.2. Sephora pricing strategy
2.2.1. Demand oriented pricing
Sephora employs demand oriented pricing based on the consumers’ wants and demand. Popular items are priced highly to cater the demand. Sephora attracts customers throughout the year through competitive deals.
Although, Sephora is a high-end brand, it offers affordable prices as well to broaden the customer base.
On average, a Sephora customer spends around $33 a month on different beauty products.
2.2.2. Geographic pricing
Sephora charges different prices in different geographic regions. Here is the 2023 price comparison of Sephora foundation in Canada versus Australia:
2.2.3. Sephora pricing comparison
Sephora often charges higher prices than its mass-market competitors. Following table presents the 2023 pricing architecture of Sephora and Ultra Beauty:
Source: Centric Pricing
Taking the example of lip products, Sephora charges 80% higher than Ultra Beauty. In post-pandemic market, an average lip product at Ultra is available at $15, while, average price of lip product at Sephora is $27.
2.2.4. Sephora price hike
The recent price hike due to rising inflation has hit the beauty industry hard, and Sephora is no exception. Following table shows how inflation has affected the prices of Sephora, Nordstrom, and Ultra Beauty.
Source: Style Sage
2.2.5. Key lessons learned
- Perceived value- charge premium prices and justify it by offering high value for money
- Integrate flexibility in pricing strategy- charge different prices in different geographic locations
2.3. Sephora place strategy
2.3.1. Sephora distribution strategy
Sephora adopts selective distribution strategy. It carefully selects the retail partners and locations to ensure the product availability on all key outlets, while maintaining the brand exclusivity at the same time.
2.3.2. Sephora distribution channels
Sephora business model focuses mainly on direct-to-customer sales and retail sales. Sephora currently has more than 2,700 stores in over 35 countries, with more than 500 stores in USA.
Following table summarizes the distribution channels that Sephora uses to reach the target market:
| Distribution channels | Description |
| Physical outlets | Over 2,700 stores in more than 35 countries |
| Ecommerce | Strong online presence, with millions of monthly visits |
| Third-party retailers | Online marketplace and departmental stores with exclusive partnerships |
| Sephora Inside JCPenney | More than 600 Sephora Inside JCPenney locations in USA |
| Pop-up stores | Temporary set-ups serving as additional distribution channels |
2.3.3. Sephora ecommerce strategy
The company expands its global reach through its world-class e-commerce site. In 2022, Sephora was the top online store in USA based on net sales, followed by Ulta.com:
Source: Statista
Sephora topped the list by making net revenue of US$2,592 million in 2022, followed by Ulta.com, Bath and Body, Fragrance net and ipsy.com.
In 2023, Sephora partnered with SixtyFour and FaceTheory to accelerate innovation, and fuel the ecommerce growth.
2.3.4. Sephora Omni-channel retailing
Sephora Omni-channel strategy (exemplified by ‘My Beauty Bag’ and ‘Beauty Insider’ loyalty program) enhances customer convenience.
Source: Multi-Channel Merchant
The seamless integration of online and physical channels offers personalized recommendations, allows features like online-to-store pickups, and optimizes overall customer experience.
2.3.5. Key lessons learned
- Offer seamless Omni-channel experience
- Carefully select distributors to preserve brand exclusivity
- Invest on enhancing in-store customer experience
2.4. Sephora promotion strategy
Sephora’s marketing mix prominently features its makeup marketing and promotion strategy:
2.4.1. Sephora promotion mix
Sephora has a well-integrated promotion mix. The promotion mix includes:
2.4.2. Sephora advertising strategy
Sephora has launched many successful TV ad campaigns. In 2023, Sephora’s TV ad ‘Discover your match’ created a buzz word, making the brand visible in intensively competitive market.
Here is a Sephora Billboard on Times Square:
Sephora also prints ads in different fashion magazines, mainly including- Vogue, Allure, Elle, and Cosmopolitan.
Here is Sephora ad printed in Elle magazine:
2.4.3. Sephora digital marketing
Sephora uses content marketing strategy for education and brand promotion. The company produces beauty tutorials, how-to-guides, and product reviews on the website and official social media accounts. The posted content is not only informative, but also blends emotions and humor to grab the audience’s attention.
Sephora also monitors the e-WOM, and leverages the power of user-generated content. Here are some funny examples of how consumers discuss Sephora over social media:
2.4.4. Sephora influencer marketing
Sephora is among the companies that successfully use the influencer marketing for brand promotion. In 2022, Sephora achieved 100th best global brand ranking, with $5,491 million brand worth- Inter-brand reports.
Much of Sephora’s success could be attributed to its innovative video marketing strategy. In today’s age, who buys an expensive makeup product without going through reviews on social media?
No one, right?
Recognizing this, Sephora creates videos at scale by collaborating with influencers to reach the audience with highly targeted content. Some famous influencers that Sephora hired include- Huda Kattan, James Charles, and Nikkie Tutorials.
Sephora ensures strong presence over social media, as presented in following table:
| Social media platforms | Number of followers 2023 |
| YouTube | 1.38 million |
| 21.6 million | |
| 19 million | |
| 2.2 million |
Sephora social media strategy focuses on educating, inspiring, and engaging its brand community. The company creates and curates the content that showcases new products, trends, and makeup tutorials, fostering the sense of belongingness among followers.
2.4.6. Sephora try before you buy
Sephora try before you buy slogan provides the foundation for its promotional strategy. The company allows the customers to test the beauty products by applying the makeup testers, or receiving samples before making the purchase decision. It empowers the customers, fosters trust, encourages exploration, and enables customers to make well-informed beauty choices.
2.4.7. Sephora loyalty program
Sephora loyalty program- Beauty Insider has three levels- Insider, VIB, and Rouge. On every purchase, customers earn points to access exclusive promotions. Sephora’s loyalty program is considered one of the best programs in the retail and ecommerce industry.
Here is the snapshot of Sephora’s loyalty program:
Source: Loyalty Lion
2.4.8. Key lessons learned
- Content driven engagement
- Well-integrated promotion mix
- Influencer collaboration to unleash power of video marketing
- Customer-centric loyalty program
2.5. Sephora people strategy
Sephora hires well-trained approachable and knowledgably beauty consultants. They offer personalized recommendations, and well-informed skincare advice, enhancing the in-store experience.
In 2019, Sephora incurred $8 billion on employees’ diversity training by closing all its US stores for 1-hour after a racial incident- reported by Reuters.
2.6. Sephora process strategy
Sephora streamlines the customer journey both- online and instore by- prioritizing the product discovery, offering personalized recommendations, and integrating digital tools like virtual try-ons. In stores, Sephora offers seamless shopping experience by hiring beauty consultants that provide expert guidance to enhance the customer journey.
2.7. Sephora physical evidence
Sephora keeps experimenting with in-store aesthetics to offer an immersive experience. In 2023, Sephora launched first ‘store of the future’ in Shanghai. The store showcases obsession for experiential retail, offering tailored services and digital touchpoints to unlock the consumer journey:
Source: LVMH
3. Recommendations
- Invest on data-driven personalization to offer tailored recommendations.
- Expand the sustainable beauty line by prioritizing eco-friendly brands.
- Enhance online customer journey by streamlining the online shopping experience.
- Offer more in-store beauty services to drive the foot traffic.
- Leverage the user-generated content to build strong online brand communities.
- Collaborate more with influencers to unleash the power of video marketing.
- Take measures to control the price hike as a result of inflation.
- Take more rigorous training initiatives to avoid the racial incidents.
4. Conclusion
To sum up, Sephora’s marketing strategy reflects a dynamic blend of product diversity, premium pricing, Omni-channel retailing, and well-integrated promotion mix that enhances the overall customer experience.
Click here to read Sephora SWOT analysis
5. References
Sephora brand profile on Brandirectory.com. (n.d.).
2022’s top beauty brands, retailers and sustainability leaders: Cosmetify’s index. (2022, December 22). Global Cosmetic Industry.
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Sephora boosts in-store services with mobile booking capability | Retail Dive. (n.d.).
Vy. (2023). 19 Eco-Friendly, Sustainable makeup & beauty brands at Sephora. Ethical Elephant.
Sephora Sustainable Packaging Retailer Guide | EcoEnclose. (n.d.). EcoEnclose.
Developers, W. (2019). Going Head-to-Head in beauty Retailing: A comparison of Sephora and Ulta. Coresight Research.
Foundations | Sephora. (n.d.). Sephora.
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Barnes, S. (2022a). Inflation Index: Price Hikes Hit The Beauty Industry. Fashion Industry Data and a Point-of-View.
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Top Beauty online stores United States 2022 | Statista. (2023, May 11). Statista.
Music, S. (2023, August 3). SixtyFour and Sephora US launch dynamic partnership celebrating emerging artists and music discovery. LBBOnline.
Skincare, F. |. B. |. S. (n.d.). Facetheory signs exclusive deal with Sephora Asia. www.linkedin.com.
Trout, J., & Trout, J. (2017, November 28). 5 Excellent examples of omnichannel retailing done right. Multichannel Merchant.
Sephora – Interbrand. (2023, February 3). Interbrand.
Admin, & Admin. (2023, July 14). Complete SWOT analysis of Sephora. Strategy Finders.
Woolnough-Rai, M. (2023, July 11). Scale success story: Sephora’s Beauty Insider – LoyaltyLion. LoyaltyLion.
Staff, R. (2019, June 3). Sephora to shut U.S. stores for diversity training after racial incident. U.S.
Sephora unveils new Store of the Future in Shanghai for an immersive retail experience. (2023, July 20). LVMH.
