Question 1
Sephora is the largest prestige beauty specialty retailer in the world, with itsheadquarter based in San Francisco, California. It generated approximately $2 million of revenues from the company’s store in the U.S. and Canada. Sephora Direct is responsible for all direct marketing and digital initiatives, including Sephora.com and the Sephora Beauty insider loyalty program.
Current marketing programs and its effectiveness
It plans to double its investment in digital marketing, the current spending in social media and digital platforms is around $1 million, which is five percent of its total marketing budget.
Departmental Stores
Compared to the data from 2010, Sephora had over 1000 stores in 23 countries in premium malls. This was so effective that Sephora launched a deal with JC Penny (Large mid-range dept. Stores) to be its exquisite beauty store retailer in all its department stores.
Sephora Direct
Sephora.com was launched in 1999 with 100 brands. Under this approach, the company has Sephora.com and Beauty Insider. The online sales are projected to be 15 to 20 percent of Sephora USA and offers higher margins than a typical store would have due to the lower overhead cost.
Beauty Talk
Beauty Talk is another productive way to engage its customer.Although Facebook is an efficient platform but Beauty Talk,on the other hand, provides forums for which, one is not required to sign in with their official names. Further, it helps the customer to ask questions without giving their personal information and would help customers to answers questions that one might feel embarrassment while asking.
Sephora Direct Harvard Case Solution & Analysis
Question 2& 3
| budget category | Strategy | 2011 budget allocation | % |
| video production | To produce quality video and its editing requires special skills that would attract customers to watch it till the end. The video can be placed on different platforms such as YouTube, Facebook, TV commercials, etc. Thus the quality and its production is an essential factor and the ultimate goal is get the product displayed to the right audience. | 200,000 | 20% |
| video/YouTube advertising | Sephora can contribute five percent of $1 million in a video contest, by doing so it will attract more audience. Further, it will encourage others who are not even buying the product and would get a chance to know the product is offering. | 150,000 | 15% |
| video contest | Sephora can contribute five percent of $1 million in video contest, by doing so, it will attract more audience. Further, it will encourage others who are not even buying the product and would get a chance to know what the product is offering. | 50,000 | 5% |
| Facebook development | Sephora is more concerned about its response in real-time as it enablesit to get input from its customers without being shy. The company should do some spending on real-time responses and offer discounts when they follow on Facebook for the very first time. Other than this, there should be some spending on its sweepstake by offering two wishes only on Sunday. | 150,000 | 15% |
| Holiday/ Viral promotion | Holiday or viral promotion has its significance. Therefore, Sephora can offer different packages to its customers on holidays or special events, which will enable the customers to shop more and get some benefit out of it. | 100,000 | 10% |
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