Inside Sephora's Formula for Creating Experiential Retail
Calvin McDonald, president and CEO, Sephora Americas, opened his keynote presentation at Shoptalk in Las Vegas with a simple question for the audience: Can a retailer truly be experiential? During the next 20 minutes, McDonald proceeded to answer that question in the affirmative, unsurprisingly naming Sephora as a brand that has become experiential for its beauty enthusiast customers.
To become experiential, brands must first define what that means. For Sephora, being experiential is predicated on three core beliefs: Be memorable, be sharable and be repeatable. The cosmetics and beauty products retailer is working to make shopping with it experiential for its customers (which it calls “clients”) and 20 million Beauty Insider loyalty program members, who shop with it on a daily and weekly basis. Sephora sells thousands of products from more than 100 brands across its stores and digital properties.
“We connect clients with product, but we want it to be more than just transactional relationships,” McDonald said. “We want to create demand through emotional relationships that will drive long-term loyalty.”
3 Steps to Creating Unbiased Experiential Retail
McDonald cited three ways that Sephora is developing a community of beauty enthusiasts that exist within the ecosystem of its brand: through teaching, inspiration and play. These steps are connected across the retailer's physical stores and digital assets, which McDonald believes help Sephora differentiate itself in a very crowded market.
- Teach: Sephora has begun offering beauty classes in its stores. Customers love to learn about beauty, and our classes provide an environment for that, McDonald said. Sephora conducts hundreds of classes per week, with thousands of clients participating. All of the class activities are hands-on and playful for participants, such as trying new makeups and styling techniques. The classes are anchored in the store, but the interaction continues outside the store online and via mobile, said McDonald. The classes strengthens connectivity to the brand, he added.
- Inspire: Sephora launched Virtual Artist, a 3-D tool on its mobile application, in February 2016. Virtual Artist lets users digitally play with product — e.g., lip shades, eyeshadows, false lashes — watch virtual tutorials that teach new techniques (e.g., Smokey Eye), and get inspired and try new looks created by Sephora experts. Virtual Artist is anchored in digital, but this is also behavior we see in-store, noted McDonald.
- Play: Launched in August 2015, Play! by Sephora is a subscription box service from the retailer. Subscribers to the service receive monthly curated product selections from Sephora's merchants. The subscription service also brings members together in-store for “Play” dates, where they can share beauty secrets and tips with each other. In addition, subscribers get access to “Play” passes, which they can use to schedule appointments with beauty agents in-store. While its origins are online, Play! by Sephora connects the home to the store, said McDonald.
“Can a retailer truly be experiential?” McDonald again asked the audience at the end of his presentation. “At Sephora, we believe we can. We need to think beyond the transactional relationship and build emotional relationships through teach, inspire, play. Create a community of beauty enthusiasts.”