Transactions on Economics, Business and Management Research
ISSN: 2960-1789, eISSN: 2960-2254 | Volume 13
BMMFT 2024
Content from this work may be used under the terms of
CC BY-NC 4.0 licence
(https://creativecommons.org/licenses/by-nc/4.0/).
Published by Warwick Evans Publishing.
WEP
Warwick
Evans
Publishing
Marketing Strategy Analysis Based on the 4P Theory: A Case Study
of Sephora
Yingran Zhou
Cushing Academy, Ashburnham, United States, 01430
yizhou25@cushing.org
Abstract.
Sephora is an old brand, it has been known to the public since its opening, its products
sell well, and decades later it is still popular around the world, and its sales have been rising, thanks
to its unique 4P marketing strategy. Sephora's marketing strategy has achieved great success, and
this paper will analyze their strategy by the way of literature analysis. Sephora, as a giant in the
beauty industry, owns many brands and has many customers, which can be attributed to their
marketing strategy. Sephora's marketing strategy mainly focuses on a wide audience, high tolerance,
both online and offline stores, product diversification, self-service shopping to provide customers
with a comfortable shopping environment, cultivate customer loyalty, and a wide price range.
Sephora has a clear positioning and operates numerous chain stores globally. It also provides
customers with specialized services to make customers clearer about their needs and strengthen
customer loyalty with unique services. Sephora has gained a large number of followers with its wide
range of prices, product diversification, geographical location and proper promotion.
Keywords:
Beauty; Personalized shopping experience; High tolerance; diverse products.
1.
Introduction
Marketing strategy is the most essential for each brand, but each brand strategy is also different, it is
set according to the unique style of the company and the brand. If it is a mass service industry, it must
be able to track crowd preferences and be able to maintain customers. Sephora, as the world's leading
cosmetics retailer, has carved out a unique niche in the highly competitive beauty industry through
its innovative business strategy and customer centric approach. The brand's success can be attributed
to its diverse product range, which includes cosmetics, skincare, perfumes and hair care products, as
well as its commitment to providing a personalized shopping experience. Sephora has a clear market
positioning, it is characterized by high tolerance, it can be provided to high income users and students
who want to buy affordable products. Its selection is also very wide, it offers liquid foundation that
suits different races and provides models of different ages and body types. This commitment to
inclusivity resonates with consumers and strengthens Sephora's brand identity. As the beauty industry
continues to expand its reach, Sephora has adeptly capitalized on two major trends: the rise of
ecommerce and the power of social media. The brand's strong online presence and social media
engagement have allowed it to connect with a broader audience, while its personalized services,
including virtual consultations, have enhanced the shopping experience for diverse customer groups.
Sephora also launched a membership system, based on members' past shopping history to recommend
new products, and also their repeated purchases of products appear on the homepage, creating a
personalized shopping experience that fosters customer loyalty. Furthermore, Sephora's
understanding of consumer behavior is instrumental in its success. The brand employs data analytics
to gather insights into customer preferences, enabling it to tailor marketing campaigns and product
offerings effectively. By continuously analyzing and adapting to consumer trends, Sephora ensures
that its marketing strategies remain relevant and impactful. Sephora can become a giant in the beauty
industry because they know enough about and master the information of customers, and they know
how to make customers repeatedly buy products in their online or offline stores. This article will
analyze Sephora's marketing strategy using the 4P theory—Product, Price, Place, and Promotion—
through a literature review, and provide recommendations based on this in-depth analysis.
137
2.
Background of Sephora
Sephora has a decade’s long history, having originally opened in 1969 as a small perfumery called
Shop 8 in Limoges, France. Dominique Mandonnaud, as its founder, has a unique Shop style. At that
time, people could not try out the products when they bought them, they had to buy them before they
could try them. However, Dominique Mandonnaud developed Shop 8 into displaying the products on
the counter by themselves [1]. By allowing guests to try products before buying, Shop 8 created a
shopping experience that was both enjoyable and confidence boosting for customers, which
undoubtedly increased the guest's purchase rate. This service carried out by Shop 8 has won it a lot
of favorability of customers. Many customers will come here because it can be tried for free. When
customers feel satisfied after trying it in the store, Shop 8 has earned a special place in their hearts
[2]. It was this bold idea that made a great contribution to the success of the later Sephora, which has
continued to allow guests to try on this service for free. Shop 8 expanded to 12 stores in 1979, while
Sephora was born in Paris in 1970, and Dominique Mandonnaud merged 38 Sephora stores with 12
Shop 8 stores in 1993, officially launching the business under the name Sephora in 1995. By 1997,
Sephora had established a presence in thirty countries worldwide. The following year, the brand
expanded into Italy, Portugal, Spain, and Poland, further solidifying its position as a global beauty
retailer. In 1999, Sephora opened its first store in New York, marking its entry into the North
American market. Sephora now has more than 3,000 stores worldwide [3]. This expansion was
complemented by the launch of its online store the same year, providing customers with greater access
to Sephora's products. In the same year, it launched an online website to give more customers the
opportunity to know about its products [4]. Moreover, one advantage of online shopping is that some
products that are not available offline may be sold online and there is a comprehensive return policy
which can give online shoppers peace of mind.
3.
Sephora's Marketing Strategy
3.1.
Product
Sephora's marketing strategy is very successful, as can be seen from its best-selling since the
beginning of the last century, its marketing strategy can be dismantled with the 4P. The first is product,
which mainly targets young women, especially extroverted and upper middle class women. Sephora
is mainly responsible for makeup and skin care, with a total of more than 1,500 products. Its product
types and color numbers are very diverse. It includes not only luxury brands such as Dior, Armani
and Tom Ford, but also their own beauty products and other affordable brands such as Rare Beauty
and The Ordinary. Beauty brands such as Nars and Make Up Forever have a huge selection of liquid
foundation. There are more than a dozen options at most, which perfectly match different skin tones
and makes it easy for customers to find the right product in their store. Moreover, it will collect many
brands of a type of product, such as makeup spray, which provides Urban Decay, Make Up Forever,
One Size and even more, among which there are water mist and gas, and customers can choose from
different forms. In addition, Sephora also has a membership system, which is used to record the
number of customers' purchases, so as to effectively recommend and accumulate the corresponding
number of credits to the account. It gives members the name "Beauty Insider" and ranks customers
according to their loyalty According to the statistical table, Sephora's customer loyalty rate is 80%
[5]. The first tier will have free birthday gifts and free classes, and the highest tier will have free two-
day shipping and personal hotline rights. And when costumers check out at the Sephora offline
shopping store, the collector will ask their mobile phone number, so that they can create an account
or log credits into their account, so that costumers will not miss any credits. Sephora's large customer
base through membership organizations allows Sephora to better understand and investigate customer
information and preferences.
138
3.2.
Price
The second part of Sephora's marketing strategy is price. Sephora uses a price strategy driven by
consumer demand, and the prices of some popular best-selling styles and luxury brands will be set
relatively high. According to statistics, Sephora customers spend an average of $33.17 per month on
beauty products. Sephora's sub brands have more than 300, it perfectly grasps the goods of various
price platforms, not only beauty, skin care and perfume also have this price grade classification, so
that different groups and classes of customers have the ability to consume in Sephora [6]. And
Sephora is also very smart to produce their own products into the store, and its advantage is affordable,
for example, its makeup remover price is not obviously cheap, but it is a large bottle, calculated down
is very cost effective, and other brands of makeup remover price comparison is slightly higher. This
marketing strategy is very effective to stabilize customers, and the wide range of prices can be well
adapted to different groups of people.
3.3.
Place
The third part of Sephora's marketing strategy is place. Sephora has both online and offline channels
to buy, if costumers want to distinguish in detail, they will find that it not only has its own official
website, but also sells on other websites, such as Amazon. Sephora usually sets its offline stores in
the streets or shopping malls in the center of major cities. It will not only be built along the streets so
that people can find it when walking casually and enter it quickly, but also set up in the shopping
malls with air conditioning and heating, which is conducive to letting people enter the shopping malls
and find it in the extremely cold and hot season. One of the characteristics of the stores that Sephora
chooses to place in the mall is that it will be close to the passageway and the escalator or gate entrance,
so that people will find it anyway. In addition, the Sephora store is also very interesting. It is arranged
in the form of a supermarket [6]. Customers want to see what kind of products can be found in the
store display shelf and the brand name above. This kind of self makes customers more comfortable,
certainly, the store will also be equipped with a certain number of shopping guides, they will guide
customers to help them find their needs and, if necessary, will also help customers to recommend and
introduce.
3.4.
Promotion
The fourth part of Sephora's marketing strategy is promotion. One of the features of Sephora's online
sales is "pinterest" [6]. When new products are sent by email, Pinterest will be attached at the bottom.
Customers can pin their favorite products and colors on it, which creates a visually appealing wish
list that can be shared with others and these sharing will attract more customers. The viral nature of
Pinterest helps Sephora reach a broader audience, driving traffic and increasing sales. Sephora's motto,
“Try Before You Buy”, is a cornerstone of its promotional strategy. In store, Sephora offers customers
the opportunity to try on makeup, allowing them to experience the product firsthand [7]. Events such
as the VIB sale offer significant discounts to members of Sephora's loyalty program, encouraging
repeat purchases and fostering customer loyalty [8]. In the case of discounts, Sephora has calculated
carefully to maximize their profits without losing money. Sephora has also chosen to give free
samples to attract visitors, such as Farmacy's makeup remover, which will give three free samples on
Black Friday. Sephora will also shoot advertisements in some fashion magazines or post on social
media, which can achieve publicity.
4.
Suggestions
4.1.
Digitalization of In-store Operations System
The first thing Sephora needs to improve is to save customers' time. Sephora is a giant in the beauty
industry, its customer flow is very large, but when customers need to find a product, the shopping
guide is often busy. Sephora should set up a few machines at the entrance of the store, so that
customers can search for the location of the product when there is no shopping guide, which will save
139
customers time and make the shopping guide less rushed and make Sephora truly self-service. Due
to the large number of people, the checkout line is also very large, and the cashier has to ask customers
whether they have a membership, and other questions will take a lot of time, but this cannot be
changed, because membership is a big factor in keeping Sephora customer loyalty. Therefore, if stores
want to change this situation, they can also add several autonomous cashier machines, log in to the
member account by filling in the mobile phone number and email, and then jump out of the points
page to let customers choose whether to exchange goods, and finally self-service checkout. In this
way, the rush and confusion at the checkout counter will be reduced, and the comfortable shopping
experience of customers will be increased, saving time on both sides.
4.2.
Social Media
The second thing Sephora could try is to work with beauty content bloggers or video creators to post
real reviews of products on social media. Sephora has many products, in addition to hot products,
there are also many treasure of niche products, but these are not well known by people, at this time,
Sephora can cooperate with beauty bloggers to produce a good thing recommendation video, the
product mixed with other recommendations of bloggers, to achieve the effect of soft advertising [9].
And let beauty bloggers in the video to test the effect of makeup on the product and the durability of
the test. When a beauty blogger posts a video, his followers will also pay attention to the product,
which plays a strong publicity role.
4.3.
Co-branded Product
Sephora's third option is to co-branded products with celebrities or Internet influencers. This approach
leverages the significant influence that popular stars and social media personalities have on consumer
behavior. Celebrities and influencers often share their lifestyles, including their food and clothing
choices, on social media platforms where their posts generate widespread interest and discussion
among their followers. If Sephora and their joint name a product, then those fans will certainly buy
immediately. To maximize the impact of these co-branded products, Sephora employs a scarcity
marketing strategy, selling products for a limited time, and the restock time is random, and the
quantity of inventory released is not large. This also improves the chances of online marketing, getting
customers to say they want more stock, and eventually more stock will come out, sales will increase,
and more people will be familiar with the brand. If there is an opportunity to let celebrities or Internet
influencers visit Sephora stores, and explain and publicize their co-branded products, the publicity
degree through the special explanation of celebrities is certainly more powerful than the online poster,
celebrity fans will not be surprised to surround the store, which will make passing people curious
about what happens inside and learn about Sephora.
4.4.
Personalized Packaging Services
Fourth, Sephora can provide personalized packaging services to enhance the customer experience.
For example, when customers want to send birthday gifts to friends, Sephora offers the option to print
the recipient's name and a personalized greeting on the wrapping paper. In addition, members can
receive free birthday cards. Many people choose to send birthday gifts to Sephora, and providing this
card will make customers feel that the brand is very thoughtful and will strengthen customer loyalty.
5.
Conclusion
Assessing what makes Sephora a giant in the beauty industry, it is clear that its marketing strategy is
absolutely indispensable. Sephora's marketing owners have strong imagination and creativity. They
used the "try before buy'' term to gain public attention in the early stage, and consolidated customer
loyalty through service and membership privileges in the later stage, which successfully made them
have many loyal followers. Nowadays, when most young people want to buy cosmetics, the first
reaction is Sephora rather than some brand counters, because they have a large number of brands of
products, a wide variety of choices, and more opportunities to discover new and useful products. In
140
addition, Sephora's discount strategy will also attract the attention of some students and middle-aged
people. So Sephora can have today's achievements, and their marketing strategy is inseparable. This
study is to deeply analyze how Sephora maintains its customers and how to attract more customers
by means of publicity, which will be a reference for other brands when making marketing strategies
and provide a suggestion for Sephora. Of course, this study only precedes the analysis made by the
current 4P theory, and more experimental data can be used for more in-depth analysis in the future.
References
[1]
Ding Qiuxu. Market development and global expansion strategies: An analytical study of Sephora, Highlights in
Business, Economics and Management, 2024, 30, 6.
[2]
Once Upon a Time. Inside Sephora, https://jobs.sephora.com/Russia/content/Once-Upon-a-Time/?locale=en_US.
Accessed 29 July 2024.
[3]
Ji Hanbing. Marketing plans for cosmetic industry in China Case Study: Sephora. 2016, 47.
[4]
Sephora’s
Success
Across
Countries.
Global
Marketing
Professor,
25
March
2021,
https://globalmarketingprofessor.com/sephoras-success-across-countries/. Accessed 29 July 2024.
[5]
Sephora Marketing Mix (4Ps) & Marketing Strategy. MBA Skool, https://www.mbaskool.com/marketing-
mix/products/17455-sephora.html. Accessed 29 July 2024.
[6]
Burcu, Öztürk, and Kip Sema. Effects of traditional and digital experiential marketing on brand loyalty: A Research
on sephora brand. Master’s Program in Marketing Communication and Public Relations, 2022, 120.
[7]
Purnamasari, Desak Made Febri Purnamasari Made Febri, et al. Omnichannel approach: Customer loyalty through
brand experience and change habits customer on Sephora. 2022, 17 (1): 14.
[8]
Amiira Ismail Amiira. International marketing strategies in the celebrity cosmetics industry: A dual case study: Huda
Beauty and Fenty Beauty. 2018, 68.
[9]
Vásquez*, Germán Aníbal Narváez, and Edgar Montalvo Escamilla. Best practice in the use of social networks
marketing strategy as in SMEs. Procedia - Social and Behavioral Sciences, 2014, 148: 533-542.
