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Health and Beauty We examine the trends underlying the growth of the global marketplace in health, beauty and hygiene. Our analysts will point the way forward by highlighting critical innovations and behaviours that are driving industry evolution.

Digitise to Humanise: What Can the Beauty Industry Learn from Sephora?

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A paradox it may seem, but trading-in the humble human for digital prowess in order to heighten engagement and a personalised service, has given beauty specialist retailer Sephora that industry-coveted je ne sais quoi. So whilst buzzwords like authenticity continue to plague the conversation in beauty, how is Sephora’s powerful digital undercurrent carrying it to world domination?

At the crux of Sephora’s unrelenting success, which saw it is its customer-centric strategy that shuns the aimless implementation of digital initiatives simply to be recognised as a digital trailblazer, in place of building technology around the consumer. A case in point is Sephora’s acclaimed app Sephora to-go, which was born from an observation that so many of its customers were using their phones whilst shopping in store. Instead of allowing traffic, both online and offline, to wander elsewhere in pursuit of purchasing guidance, the Sephora to-go app seamlessly blurs the two worlds for a smooth and informed customer journey. Most crucially, the app evades the unsolicited interference of store assistants, which do more to alienate and little to relate to a connected consumer who feels most at home interacting with a screen.

Can peer-to-peer act as a vehicle for true authenticity?

Not only is the Sephora to-go app built around the consumer, but driven by the consumer too; another reason why shoppers are so loyal to the retailer. Much of the valuable content is built by the consumers themselves, interacting with its features and submitting reviews. One product alone, the Kat Von D Everlasting Lipstick has garnered over 9,000 reviews and 650,000 “loves”, encouraging consumers to shop on a Tripadvisor-esque review basis. As bloggers and digital influencers become obsolete amid disingenuous fame and fortune, this unbiased narrative is crucial to engender trust and loyalty, and is emerging as the next revolution of true authenticity. For brands too, Sephora's mobile commerce platform will be of paramount significance in light of rumblings of discontent that Sephora is increasingly cutting physical shelf space to prioritise LVMH-own brands such as Make Up For Ever and Bite Beauty.

Smart customisation builds brand loyalty

The IQ Station is another Sephora revelation that echoes consumer demand for truly customised products and targeted solutions, alongside an intensifying boycott of human interaction by the connected consumer of today. These virtual advice dispensaries act much like the recommendations of the traditional department store sales assistant, from the days of luxury beauty gone by. The fragrance and skincare IQ stations encapsulate everything that Sephora knows its shoppers want at the lowest common denominator; personalised service without the person. Intuitive detection technologies will be the future of true customisation in beauty where gimmicky initiatives aren’t appropriate for such fast-moving goods but the heterogeneity of skin type and colour warrant something beyond only what brands prescribe. Indeed, many attempts have been made over the years to provide a solution, although never on the terms of the consumer. Take for example Lancôme’s LeTeint Particulier, a customised foundation service that requires advance booking and a wait upon production; both elements that are not conducive to the time-poor population who define today’s consumer landscape. However, get it right and the reverberations for brand, planet and consumer could be positive and powerful, enhancing product satisfaction and in turn minimising wastage and improving brand loyalty.

Augmented reality to emulate story-telling

Experiential retailing is all well and good in the premium sphere where space allows for interactivity and experimentation, but how can mass brands and retailers replicate Sephora’s model? Max Factor’s partnership with augmented reality and visual discovery app Blippar is a telling tale of a lost dialogue between brand and consumer. The collaboration involves Max Factor’s inventory being scan-able or “blippable”, allowing consumers to unlock content, reviews and advice on Max Factor products, emulating the story-telling of premium and niche players. Since narration of product provenance can prove challenging in an impersonal drugstore environment, augmented reality can help consumers understand the impact of their purchases and provide transparency in an increasingly ethically-conscious age.

Targeting the hyper-connected consumer

Considering that Sephora and the hyper-connected consumer go hand-in-hand, it is only natural that the retailers’ largest markets, the USA and France, rank within the top tier of Euromonitor International’s Digital Consumer Index. The Digital Consumer Index consists of two central components: The Digital Connectivity Index and Connected Commerce Readiness Index, measures that take into consideration markers such as internet access and speed, as well as smartphone possession, commerce infrastructure and digital commerce spend. The United Arab Emirates is one of Sephora’s fastest growing markets, achieving a stellar 24% value CAGR last year, and also ranking 17th in the Digital Consumer Index; the highest position for any emerging economy and one that is expected to climb to 13th globally by 2020. Brands looking to replicate the Sephora model must too avoid viewing digital opportunities through a one-dimensional "developed" lens and consider connectivity holistically; breaking into markets where technology will ensure enhancement, not disruption, of the customer journey.

Ultimately, Sephora has successfully engaged with the notoriously disengaged by not forcing an archaic or linear retailing strategy, nor forcing one of futuristic irrelevance. As Sephora’s repertoire of edgy, niche brands will continue to lure new adopters, the integration of digital practices that are already engrained in their consumers’ shopping habits will be the key to loyalty.


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