Sephora

1. Sephora should allocate 30% of its digital marketing budget to mobile app development such as improvements in the iPhone app, mobile website development and android application development. Handheld devices are becoming popular for online presence of many people and hence appropriate budget allocation is necessary in that department. Another big share of the budget should go into content creation which includes creating YouTube videos, updating and maintaining YouTube channel etc. I would recommend they allocate another 30% in this segment. 10% of the budget should be allocated to discounts, coupons to priority customers. 10% for maintaining their website and enhancing user experience. 15% of the total budget should be given for diversifying in other social media channels such as Instagram. Lastly, remaining 5% should be provided for marketing through other discount aggregators. Additional budgets should be pulled from traditional marketing provisions. As said in the case the target customers are the women in the age group of 25-35. To this age group digital campaign would appeal more than traditional marketing efforts and hence, traditional marketing can be cut down to an extent without suffering major losses.
2. Sephora launched their website Sephora.com in 2008 and they got tremendous response. By 2010, Sephora was starting to focus more on their digital marketing initiatives by creating product videos, ‘How to’ guides, starting to mark its presence on social media websites like Facebook and twitter. They also received a lot of product reviews and ratings through their online clientele. One of the endeavors in their digital marketing campaign was ‘Beauty Talk’ which is a dedicated platform for connecting and encouraging interaction between its clients similar to social networking sites like Facebook. Beauty Talk was meant for people who were interested in beauty products and had beauty related queries. Beauty Talk was a success in my opinion as it catered to specific audience, provided user privacy and anonymity. Also, Sephora incorporated gamification to recognize efforts of those users who provided answers. This in turn encouraged communications and knowledge sharing. The features that Beauty Talk provided were difficult to incorporate by using social networking platforms like Facebook. Also, Facebook acted as a source to pull people interested about beauty products to Sephora but what made them aware of the products and ratings and reviews was the dedicated platform of ‘Beauty Talk’.

1. ULTA has been a traditional competitor for Sephora for many years. Both of them sell the same products and at the same level of distribution i.e. retail. Hence, Sephora has the biggest threat from ULTA. Since, Sephora is going to focus on online and digital marketing there are other competitors like Amazon, Macy’s etc. who currently are dominant in terms of online sales. These companies are not specific to beauty industry but they can very well pose threats to Sephora’s business as they also sell beauty products as a part of their product lines and have much more online and digital penetration than Sephora. Other competitors that Sephora should be wary of while advertising in the digital space are MAC, Nordstrom and beauty.com

1. To gauge the performance of its digital marketing efforts, Sephora can use different metrics such as Click through rates for its advertises online. For the website they can look at time spent by each customer on the website by keeping track of sessions. Average amount spent by customer through website sales, mobile app sales (Total sales/No. of users or downloads) etc. Identifying unique customer traffic to the website through IP address. No. of pages viewed by each customer.

1. The digital marketing space and online presence is been proven to be beneficial or Sephora as from the information in the exhibits. The next challenge for the digital marketing team is to ‘go broad’ while also ‘going deep’ i.e. they need to diversify the digital marketing efforts while creating stronghold in the channels that they are already present. One way to do it is to integrate all the platforms that they are currently on to their website. Some simple features like sharing your purchases on Facebook, twitter or finding your Facebook friends on the Beauty Talk community, having a live chat feature or video feature with beauty experts for privileged customers can encourage sales rapidly and also the brand awareness.

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