Arvind Limited, led by textile tycoon Sanjay Lalbhai, tied up with the French cosmetics and beauty retailer, Sephora, owned by Moet Hennessy Louis Vuitton (LVMH), to run it’s India operations, bagging both the store and e-commerce rights.
The brand re-introduced its first re-vamped flagship store at Select CITYWALK, Saket in 2016. The Sephora stores were revamped after Arvind Ltd took over the brand in India. The new outlets are brighter, with a much better laid-out in terms of category segregation and ease of product finding. The product merchandising is such that it is easy to select for consumers and is placed in the way the brand wants people to use the products. The display in the fragrance segment of the store is at par with any other Sephora store worldwide.
Vivek Bali, Chief Operating Officer, Sephora India, says, “With its navigation-friendly layout, the revamped store enhances the shopping experience of the customers. A customer can walk in to the store and go straight to the area which houses the products s/he wants to buy and find them easily.”
“A lot of emphasis is on category demarcation. Within the category, there is demarcation on the position of the brand and within the brand, the position of the products. The way we place the products is an effort to educate the customer in terms of buying the product,” he explains.Apart from stressing on exclusive brands – Sephora, Make Up For Ever, Benefit, Burt’s Bees and Boscia – it also lays emphasis on Louis Vuitton brands like Dior and Bulgari, and also selective global partners including Estee Lauder, Clinique and Lancôme.
Journey from Beginner to Best
Sephora has come a long way in the past two years.
“It has been a really long journey in the sense that the brand had a lot of problems initially when we took over and the major problems as we looked at it was managing the category – and there are number of categories inside Sephora. I think that had to be put in place. The other thing that had to be done was in terms of building the brand along with the customers,” Bali says.
The brand did a full research on what kind of customers shop at Sephora and narrowed down three segments that came out very clearly:
Evolved Beauty - These are customers who are about 25-45 years old. They are premium customers and they are looking at products which are high on R&D and research and technology and innovations.
Beauty Queens - The second type of customer the brand worked upon was a category known as beauty queens. These are much younger customers between 18-35 years of age. They are also premium customers and primarily look for trends. They don’t bother too much with technology and innovations.
For these customers, Sephora roped in exclusive brands available only inside their outlets like Benefit, Make Up For Ever, Stellar, Becca, Cover FX and Foreo to name a few. This ‘beauty queen’ customer shops for these particular brands inside Sephora, something which is a major differentiator for the brand versus other beauty retailers.
Beauty Basics – The third set of customers are referred to as Beauty Basics. These are also young customers between the age group of 18-25 years. However, these consumers are the ones who are transitioning from mass brands like L'oreal, Garnier, Lakmé or Revlon and want to buy more premium products.
These are the customers who are looking for value and therefore within Sephora they can shop for brands like Beauty On The Go, which has small-sized products and they fit into their budget. The brand also has a lot of value gift sets and value palettes which satisfy their needs and helps them transition into Sephora.
“Category was the first thing that we worked on, and then on bringing in and retaining the customer. The third thing that we worked upon was engaging these customers. We also worked very strongly on our own Facebook page. We have our own Instagram page and Twitter handle. To become a part of the communication and conversation of our customers we ensure that a lot of regular content is put up, addressing them,” says Bali.
The brand also worked on changing and vastly improving its store design - how the store is laid out in terms of categories. “We have changed a lot of things inside the store and we have brought make-up right in the front, we have fragrance right in the front - these are two sunrise categories in India and we have taken skincare a little on the back while it was earlier kept in the front," adds Bali.
Since the takeover by Arvind Ltd, Sephora India is going strong on the makeup and fragrances front. Skincare is also a fast-growing category and then there are other categories like bath and body accessories, men's accessories and haircare, all of which are well represented in-store.
In any given store, Sephora stocks close to 13,000 SKUs and houses an inventory of roughly 40,000 pieces. Make up is the largest and dominating category inside Sephora followed by skincare and fragrances.
Apart from this, the brand is conducting a lot of in-store activities every month with the idea of promoting looks where the brand promotes looks to customers. The store conducts a unique activity called Mini Flash Makeovers, which gives people a taste of products which they usually end up buying.
“This change has led to Sephora’s footprint expanding from 4 stores to 16 stores in a matter of just two years and the business has almost become 10X from where it was two years ago,” says Bali.
Brick-and-mortar stores apart, Sephora is available online in India at nnnow.com. The brand’s seamless unification between online and offline stores, combining their strength using an Omnichannel model, allows consumers to do much more than just buy! The brand entices consumers to use technology to find their favourite stores near them, place an order online – Sephora has presented its complete offering online with special sections for makeup, skincare, fragrances, bath and body, haircare and accessories for women and men’s grooming – and either have it delivered to their location of choice or pick it up at a store.
The e-store also hosts several exclusive-to-Sephora brands including Benefit, Makeup Forever, Becca, CoverFX, Smashbox, Stilla, Burts Bees, Boscia, Foreo, and Percy & Reed. The website – optimized for both smartphones and tablets – is easy to navigate for first time e-shoppers with its distinct sections. It’s also a hot bed of innovations including shade sliders which add to the user experience.
Bali says, “Sephora is constantly evolving its experiences for beauty enthusiasts. Our e-store encourages urban shopping in its true sense. But urban shopping is not just dominated by metro cities. We have received requests for Sephora products from many small towns and cities in India and with the combined Omni-reach of our stores and nnnow.sephora.com, we are available across the country. We are very excited with this new business and we will continue to add more features and products to grow rapidly in e-commerce.”
Going forward, the brand is planning to aggressively foray into all key markets in India.
Bali says, “In India, 60 percent of the business comes from urban centres and 40 percent comes from Tier II and III cities, so all cities are important for us and we have aggressive plans to enter all these cities. On the cards are stores in Hyderabad and Kolkata. We will be expanding aggressively in the North. We have already launched a store in Chandigarh and soon we will be entering Amritsar. We are also looking at Jaipur, we will be looking at going into Lucknow and Indore also.”
By December end, Sephora is planning to add between 6 to 8 stores.
“All the upcoming stores will be launched in malls since high streets are more suited for fashion retailers than beauty. Also, all beauty stores require a good mix of people, a mix which is only possible in a mall,” explains Bali.
“Sephora’s inhouse private labels contribute almost 55 percent to the overall revenue. For this fiscal-end, we are looking at a very strong double-digit growth in terms of revenue and same-store sales growth, which we have been delivering consistently over the last two years,” he concludes.