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Sephora Leveraging Loyalty Data to Drive Sale

Sephora Using Loyalty Data to Reach New Customers

The beauty brand is tapping its customer data and data from its loyalty program to reach first-time customers and loyal clients. Sephora has a tiered loyalty program. Sephora’s Beauty Insider loyalty program attracts users with the ‘exclusivity’ of each tier. The following are core benefits of the Insider program that don’t change from year to year.

  • Point Multiplier: The higher the tier, the better the multiplier. Insiders receive 1 point per $1, while VIB members receive 1.25 points per $1 and Rouge members receive 1.5 points per $1.
  • Rewards Galore: Each month in the Rewards Bazaar, members may exchange their hard-earned points for a variety of trial-size products and sets and one-of-a-kind experiences. VIB and Rouge members also have the choice to redeem their points for full-size products monthly, while Rouge members can redeem 2,500 points for a $100 Rouge Reward, to use on their favorite Sephora products. New rewards will be released in the Rewards Bazaar every Tuesday and Thursday, while supplies last.
  • Full-Face Makeovers: Rouge members may receive free Makeup Deluxe Full-Face Makeovers with no minimum purchase. Appointments can be booked through Sephora.com, the App or by calling your local Sephora store.
  • The Beauty Insider Community: A destination for all beauty-lovers to find inspiration, ask questions, and get recommendations in an unsponsored, real-time, “real talk” social setting.

Sephora Tiered Loyalty Program

Building an Optimization Culture

Sephora is currently dipping its toes into big data visualization, with the help of new technologies that simplify processes for the brand’s business units. Data is imperative when it comes to pinpointing how best to target consumers since many of them complete shopping journeys across multiple devices.

“When we think about our clients, we know that they don’t just go to the store and buy something,” Ms. Singh said. “There is a journey.”

  • 23% of shoppers compare prices on mobile while standing in-store and before going to a brick-and-mortar location.
  • 24% engage with a retail app each week, leaving a prime opportunity for marketers to connect with loyal customers.

Sephora has extended its omnichannel reach to include optimized emails, a new subscription box, a mobile app, and a mobile Web site.

Sephora has started to segment customers belonging to the Beauty Insider program, which has proven to be effective. Loyal clients generally make up 20 percent of its core customer base and spend the most. They are also the most active on social media.

Social media channels are another avenue from which the beauty retailer garners valuable consumer information. Each year Sephora announces new gifts for its clients. “Sephora’s birthday gifts are something our clients look forward to every year. They are a great way to explore new products, many of which are exclusive to us,” said Allegra Stanley, Vice President, General Manager of Loyalty for Sephora. “As our clients continue to show interest in different categories like clean beauty and hair care, we’re pleased to be able to deliver differentiated options through our birthday gift offerings, providing clients more choice than ever before.”

VIB and Rouge members can also choose from an additional product option, available exclusively via the online Birthday Boutique during clients’ birthday months. This limited-edition item rotates throughout the year, so Sephora uses social media to remind VIB and Rouge members of the latest product offering during their birthday months.

Birthday Facebook Post for Sephora Insiders

Sephora is focusing on digging up real-time data, which has previously proven to be a trickier process due to silos. Having access to individual data would help the brand – as well as in-store associates – give shoppers a personalized experience based on their skin types, beauty regimes, and past purchases. “We want to recognize everybody,” Ms. Singh said.

“Since its launch in 2007, Beauty Insider has provided members with countless opportunities to receive more value and engage with their favorite brands and products in a way that only Sephora can offer,” said Allegra Stanley, Vice President of Loyalty for Sephora. “Our aim is to continuously adapt and grow our Beauty Insider program as clients’ needs and wants evolve. We are on a multi-year journey focused on raising the bar on client excitement and engagement in a prestige beauty loyalty program.”

This one-to-one client analysis is part of the retailer’s commitment to building a data culture and undergoing data democratization. While targeting loyal customers is an effective strategy, Sephora also hopes to market to consumers who may not have previously made a purchase, but have tried on beauty products.

Meshing Physical with Digital

Sephora’s digital offerings also help optimize the in-store experience for cosmetics fans. Consumers appreciate walking into a bricks-and-mortar location and having the sales associate offer products they have been searching for on their personal devices.

“When you go into a store, there are a lot of products and you don’t necessarily know which product is right for you,” Ms. Singh said. “[Shoppers] want it to be less confusing and they want some help in that regard.”

These issues prompted the retailer to delve further into connected innovation. In San Francisco, Sephora introduced its Store of the Future, which features a learning table with makeup tutorial videos playing on tablets. All of the showcased products are available on the table as well.

Sephora’s Virtual Artist feature

Meanwhile, various mobile offerings help consumers locate the right products for their skin shade.

 Sephora Virtual Artist on Mobile

In a reflection of augmented reality’s growing role in beauty, Sephora brought the technology to a wide audience via a new app feature, titled Virtual Artist, that allows users to virtually try on different lip shades and makeup shades.

“We don’t build for innovation, we build because our clients want it and want to use it,” Ms. Singh said. “Sephora is known for digital disruption. We’re meshing really great innovative ideas with all the great data we have on our clients.”

Mary Shaw