Sephora Direct: Investing in Social Media, Video, and Mobile

Sephora Direct: Investing in Social Media, Video, and Mobile.

1. Assuming she receives the additional funding, how should Bornstein allocate her budget across the various digital categories? Given that the additional funding requested must be shifted from Sephora’s other marketing spending, where would you propose to cut? Why?

Julia Bornstein is a senior vise president of Sephora Direct. Sephora was the largest beauty specialty retailer in the world with $2 billion of revenue. Julia wanted to increase her budget for social media and digital marketing. Digital marketing efforts have been implemented in the past two years; however, Julia is looking to improve social video. Julia needs that the board provides an additional funding for her department.

Julia must determine how to divide money into various social platforms. Therefore, her challenge is creating a long-term strategy that will identify how these platforms will increase Sephora’s sales. Sephora needs to compete with online websites such as Groupon and Shop Socially.

Receiving an additional 1 million in funding in the budget will be a very important investment for Sephora. Their target audience is very young. Sephora has achieved reliable reputation and loyal customers range between 25-35 year old women, and they need to engage teenage girls in order to increase revenue.

Sephora should pursue digital efforts in marketing, their mobile app that allows their customers do shopping wherever and whenever because of the growth in e-commerce. Their competitors already increased growth in visits; Sephora needs to allocate more of the budget to be more competitive in mobile experience.

Sephora’s advertising budget is 45% going to retail such as prints, store animations, and etc.). I think that Sephora has achieved popularity with the Beauty Insider and they could cut their expenses and cost for circulation of print. Millennials (demographic 18 – 35) are trying to not use this type of information and move to digital. I believe Sephora still prints and mails their advertisement but I think that it will be better that if they improve their mobile and social media channels. Sephora needs to innovate itself and move forward.

1. What do you make of Sephora’s digital and social media efforts as of the fall of 2010? Was it wise in your opinion to create Beauty Talk as a separate social platform to Facebook?

As of the fall of 2010, Sephora believed that their marketing image should be the same with the store experience. The company focused on advertisement through YouTube videos. In YouTube, customers can watch advertisement when someone apply Sephora’s products and see the final result.

In 2010, Sephora’s marketing plan was $1 million; they decided to invest most of that money into online search advertisement. Sephora bought thousands of keywords, products, and beauty related items. They also created Beauty Talk as a separate social platform to Facebook and believed that with Facebook, one of the popular and fastest social network in the world and over 500 million users worldwide, will allowed Sephora to receive feedbacks from the consumers and also, improve the advertisement system overall. Later on, Sephora has attracted over 900,000 fans to like its Facebook page. I think that creating Beauty Talk was a very wise decision. It was very important for the company hearing from their customers. Q&A option gives the company an opportunity to improve in the future.

1. As Sephora increasingly dabbles with digital marketing and social media, which competitors should the company be most worried about?

Bornstein stated, “we know our clients shop at multiple stores, and we want to increase our share of their wallets. To do that, we need to make our brand come alive and inspire clients to buy more.” She believed that social media played an important role to hear back from customers. Creating Beauty Talk on Facebook became a two-way conversation. Sephora posted the questions under the headline: “Sephora Asks.” Sephora became number one beauty website, but the most important was to become number one at selling beauty products.