RETAIL LOCATION STRATEGYLauren Haden, Jamaal Camper, Allie Humes & Ashleigh Van Der Watt

SEPHORA

KEY FACTS• Upscale beauty retailer

• Founded in France, 1970

• 1,900 stores in 25 countries

• 360 stores in North America

• 485 JCPenney boutiques

CLIENT & LOYALTY• Ages 18-45• Predominantly female

Rewards Program • Beauty Insider• V.I.B. (Very Important

Beauty Insider)

PRODUCT OFFERING & PRICING

• Over 250 major brands

• Sephora Collection - 10% of sales

• Cosmetics $5-$90

• Hair care $5-$85

• Skincare $5-$380

• Overall $1-$675

KEY ISSUES

Competition Within Retail Landscape

• JCPenney’s demise• Negative brand association

• Macy’s acquisition of BlueMercury• Success of ULTA• “Open sell” strategy no longer unique• Competition in customer service

“Store in Store” Retail Strategy

SWOT ANALYSIS STRENGTHS

• In-store setup and self service approach

• Successful online and social media presence

• Growth in brand presence

SWOT ANALYSISWEAKNESSES

• JCPenney: Not the right brand message?

• Rewards program & shopper incentives

• Pricing strategy

SWOT ANALYSISOPPORTUNITIES

• Increase awareness of men’s product offering• Harness holiday shoppers through unique selling experiences (i.e. pop up shops)• Partner with popular YouTube vloggers and makeup bloggers to create free internet buzz• Venture into salon services to compete with ULTA & BlueMercury

SWOT ANALYSISTHREATS

• “Store within a store” trend no longer innovative

• Online presence posing a threat to in-store sales

• The demise of JCPenney

COURSES OF ACTION

1. Pop-Up Retailing2. Specialty Boutique Retailing3. College Retailing4. Stay the Course?

POP-UP RETAILING• Temporary retail spaces• Surprising consumers• A unique retailing experience• On college campuses and in major cities

Sephora’s 2012 Pantone Color of the Year Pop-Up Shop:

PROS & CONSPros: • Greater brand exposure• “Guerrilla marketing” tactics leave lasting impressions on customers

Cons: • Wide and varied product offering - tough to narrow down

SPECIALTY BOUTIQUE RETAILING

• ”Something new” in a cluttered beauty landscape

• Micro-niche retailing

• Spread concept to cities, test different markets

PROS & CONS

Pros: • Reaching new markets• Segmented clientele creates loyalty• Unique retailing experience

Cons: • Costs associated are high• Consistency• Lack of brand connection

COLLEGE RETAILING

• Increases convenience for college students (bookstore and student center locations)

• Creates brand awareness that will lead to more in-store traffic

PROS & CONSPros: • Sephora is more relevant to young people, especially college-aged

Cons: • Clinique monopolizes that college retail beauty market with its in store makeup counters

STAY THE COURSE?

• Leverage social media presence to drive in-store traffic

• Build upon successful online retailing strategies

• Continue operations of 300+ standalone stores and 470+ Sephora boutiques

PROS & CONS

Pros: • Can focus on creating more innovative online retailing techniques• Further develop HR and training programs to help boost in-

store sales.

Cons: • JCPenney’s future is uncertain • ULTA’s recent success – Sephora no longer “ahead”• Macy’s acquisition of BlueMercury poses threat• Keeping same retail strategy will not give Sephora an edge

RECOMMENDATION:COLLEGE RETAILING + POP-UP RETAILING

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Summer Style College Tour

COLLEGE POP-UP INSPIRATION

UTILIZING STRONG ONLINE SOCIAL PRESENCE

On-site photo booth

Fans vote on favorite

#SephoraSummer

Instagram contest

“Summer Style” board showcases looks

BRAND RECOGNITION & LOYALTY

• Establish campus brand ambassador role

• Promote and raise awareness for Summer Style tour

• Modeled similarly after Victoria’s Secret PINK campus rep program and pop-up shop tours; Rent the Runway and other ambassador programs

QUESTIONS?