Company Analysis of Sephora Beauty

Key partners

Being a retail store, Sephora's main partners are designer beauty products in makeup, skincare, and fragrances, among others. The partners have evolved based on market popularity over the years. Some key suppliers within the last two years include Shenzhen Color Cosmetics Products Ltd and Tianjin Crafts Technology Ltd, both in China, offering supplies of a wide variety of makeup brushes and Jada rollers used as skin care products (Sephora Suppliers, Manufacturer, Distributor, Factories, Alibaba, 2022).

The most recent blooming partnership is Kohl's Sephora partnership, intending to have over 400 Sephora physical shops worldwide.

Sephora has over 1,000 suppliers and partners worldwide (Sephora Suppliers, Manufacturer, Distributor, Factories, Alibaba, 2022).

Key activities

Sephora’s activities are in sync with the vision and mission of the retail organization. Therefore, its activities include;

It is maintaining an active social media presence and proper customer treatment to build loyalty with its customers.

It is improving the technology within its physical stalls for faster customer service and a better physical shopping experience. In addition, technological adaptation to the online platform allows the company to expand its market base, intending to offer these customers a similar shopping experience to that of physical clients. To achieve this, Sephora continually updates its website and its official app and updates demos on how to use products they offer on its various social media platforms (iBot, 2020).

Key Resources

Sephora has a wide range of financial, physical, and human resources.

Sephora's physical resources are the physical locations of its stores in North America, Asia, Canada, and Mexico.

The Mississippi, Maryland, Nevada, and Utah stores have over 1600 employees who transfer products from the physical stores to customers' doorsteps.

The financial resources are needed to pay the staff, run the technologically advanced stalls, continually renovate, and expand the operations to different states and countries. Additionally, financial resources are needed to pay obligatory taxes in the states and countries the stores are located in.

Value propositions

Sephora offers valuable designer brands products and its brand products. The products' performance, newness, durability, design, and price are determined by the brands Sephora retails. For instance, offering products from brands such as Mac cosmetics implies that Mac cosmetics determines the price, durability, and product features.

Its brand deals in affordable, eco-friendly, clean, and biodegradable products with similar features' packaging (Clean+Planet Positive Beauty Brands, 2022).

Customer relationships

Sephora has maintained its loyalty base with its consumers through consistent communication on its social media platforms to give its clients insight. In addition, through customer relationships, Sephora offers planet-friendly products based on clients' preferences in recent years and ethical considerations (Clean+Planet Positive Beauty Brands, 2022).

Customer Segments

Sephora's target market is women. However, it has grown to encompass makeup and beauty enthusiasts, especially within the age bracket of 18-35 years. Additionally, Sephora targets beauty enthusiasts in the technological space, mostly influenced by social media such as Instagram, Twitter, Facebook, and its own Sephora app (Sephora: consumers by age group U.S. 2016 | Statista, 2016).

As of 2019, millennial women (born between 1981-1996) were the most common customers for Sephora beauty products.

Cost structure

As a retailer, the costs of business operations are the most expensive for Sephora beauty. They include payment of their staff, renovations, technological adaptations, and payment of its influencers, which increase the brand's sales (Liu and Berger, 2018). 

Revenue streams

Since Sephora is a retailer, the brand obtains its revenue by obtaining wholesale products from recognized brands whose products it retails at a 40%-50% discount (Quora, 2021).

The partners of Sephora also finance the brand activities through their investments (Sephora Suppliers, Manufacturer, Distributor, Factories, Alibaba, 2022).

Sephora recently sold products under its brand, including makeup brushes. In addition, they receive a revenue stream through selling their products (Clean+Planet Positive Beauty Brands, 2022).

Channels

Sephora's customers are reached through the online platform and the brand's physical stores and retailers. However, the brand has established many stores, mainly in North America, parts of Asia, Canada, and Mexico.

Its biggest stall, however, is located in New York, 34th Street.

Many customers prefer physical stalls shopping compared to online shopping. Through physical shopping, customers interact with the products before paying for them. Additionally, although technology has allowed many physical shopping perks, physical shopping is a fun experience. Some perks include color matching for makeup products, scent testing, and trying out the compatibility of products (Liu and Berger, 2018).

Technological intervention description

Machine learning and artificial intelligence-  Artificial intelligence employ human-like senses and abilities such as voice detection, recognition, and proper decision making, depending on the program's information.

Robotics technology-

Engagement of customers

Artificial intelligence(AI) can be used in Sephora beauty to collect information on consumers’ preferences.

Robotics technology can combine the information obtained using AI to create products that customers prefer, with little margin of error.

Employees’ empowerment

In a digitalized world, the understanding of technical skills for employees would be pertinent for better production of cosmetics in Sephora beauty. Therefore:

Multidisciplinary teams can be created, combining mechanical engineers and beauty experts to create technological platforms that suit clients’ needs and current technology.

Optimized operations

AI has features of big data advantage. This means that large pools of data that would have otherwise been impossible to analyze are obtained and analyzed for better and faster decision-making. For example, these interventions would imply that customer preference patterns are studied faster, and so is the creation of new products.

Increase in sales of goods and services

Since technology is faster than human labor, more sales are made since there's a faster company response to market needs and customers' preferences.

With proper programming of machinery used to manufacture goods and services, small margins of error imply that customers get the products similar to their needs, improving customers’ loyalty and company sales.

Consistent website updating will increase sales to continents such as Africa, where physical stores are nonexistent, increasing company sales and services.