Sephora Direct Case Study

Case 1: Sephora Direct

Julie Bornstein (senior VP of Sephora Direct) thinks about the upcoming budget meetings with Sephora’s parent company, Louis Vuitton and Moet Hennessy. The satisfying results from a number of Sephora’s digital efforts intensify Bornstein’s desire to request additional funding to expand the online, mobile, and social media strategies. However, with the additional funding, she needs to consider how to allocate the budget and the effect on Sephora’s traditional marketing programs. She needs to justify the costs and benefits of using digital efforts in comparison to the traditional marketing. Thus, below is the recommendations for Sephora Direct.

I would recommend Sephora to allocate most of their budget on videos, Facebook, and mobile app. First, people like to watch videos on YouTube and it is the largest video sharing site. They look for tutorial videos or just watch YouTube for fun. Second, everyone is a Facebook user. Sephora already has more than 900,000 fans, and it is continuing to grow significantly with a lot of users’ interactions. Third, everyone is using their smartphones and a lot of them use their mobiles to browse and make purchase at their convenience. Thus, it is one of the way to promote the products and generate online customers. By focusing on these channels, Sephora can cut the budget on the social partnerships and store kiosks (see Figure 1 for the budget plan). Sephora is already well-known in its industry worldwide; thus, adding social partnerships will do nothing for the company. They already have the brand and reputation for years. They only have to improve what they already have (their website, mobile app, and social media to optimize the digital marketing). In addition to that, they should keep their store design the way it is. They don’t have to frequently change the in-store display as the change of the display will be done seasonally (e.g. Christmas).

I recommend Sephora to use the budget to share the UGC (User Generated Content) YouTube videos on their website and social media page. Thus, they don’t necessarily have to produce their own videos. The only time they need to create their own video is if they want use the budget to create a YouTube ad. Back to the UGC videos, the videos should not be limited to “how to” or makeup tutorial. Sephora should include the beauty hauls and monthly favorites. In order to share good videos that will generate more traffic, Sephora could choose the videos based on the number of viewers and subscribers. I strongly recommend Sephora to use the UGC from the beauty influencers on YouTube as many of them are already popular on YouTube (many viewers and subscribers) and already use lightning, microphone, and professional camera to produce an HD quality video. Therefore, the videos are not only showing the application of products and the final look and giving honest product reviews (which is good to convince the viewers/customers) but also saving the costs of making Sephora’s own video.