Redefining Retail in the Pandemic: Sephora’s Perspective

Organised by Victoria University at Sunway, the talk was held on April 30th 2021 from 3:30-5:00PM on Zoom. Pei Shan Soon hosted the session and welcomed the guest speaker Charanpal Singh, with a turnout of over 80 participants. 

With his experience across three different countries and three years in retail as a Senior Marketing Associate at Shopee (2018) and now as an E-Commerce & Campaigns Assistant Manager at Sephora since 2019, Mr Charanpal shared his knowledge and insights on how retail has been redefined in the pandemic and advice on getting into retail, as well as answered audience queries at the end.

It is no surprise that retail, like many other businesses sectors, suffered losses throughout 2020 and continues to grapple with the after-effects in 2021. With MCOs being enforced thrice, not even the spike in “revenge-shopping” during the times lockdowns were lifted and borders had opened up, could really be significant enough to recover from the damage. This begs the question of how retailers and brands work to continue to bring in consumers, clear their inventory, and ultimately survive. 

(Source: Malaysia Tatler

According to Mr Charanpal, prestige brands saw a 55-75% decline in cosmetic and fragrance purchasing compared to 2019. While make-up lost up to 75% sales volume, skincare, in fact, saw a big turnaround with an increase in sales volume of up to 200%. This trend was due to the fact that more people were staying home and, with fewer necessities to wear foundations or lipsticks, had more time to focus on taking care of themselves, such as adopting 5-10 step skincare routines. Skincare tends to provide a bigger revenue for retail as it is generally higher priced in comparison to makeup items, thus it has helped to grow the basket size of consumers.  

The Malaysian e-commerce market is still at its infancy, as it took grave hits in pay cuts and job cuts. Still, among all markets, Malaysia’s is notably tech savvy. More and more people are encouraged to do things online, from teaching and learning to socially distanced gatherings. As such, once retail-only customers have also moved online. From a business perspective, the e-commerce market was thus presented an interesting time to be in the digital space. There have been lots of opportunities to explore different companies and Mr Charanpal himself received many offers from companies big and small looking for the likes of his digital experience. He recommended that having skills in digital technology would lead to a path towards good career opportunities once e-commerce becomes matured. 

E-commerce has played an important role during COVID-19 in bridging the gap between online and offline and making a seamless transition for customers to have an online and retail experience. For instance, one of the main reasons customers felt deterred from buying online before is the lack of trust in the service and products. Sephora have therefore worked to develop trust through firsthand product reviews, local and foreign, and employed a system where consumers who send reviews can reap certain benefits and gift rewards, encouraging the behaviour of reviewing. This has succeeded a global reach with demographics in Singapore, China, Africa, to name a few, and is especially helpful for smaller niche brands launching new products to develop trust with their customers, too.  

(Source: Medium)

Investing in working with google, Sephora has unleashed Augmented Reality (AR) and Artificial Intelligence (AI) functions. Top examples include: Virtual Lipstick Assistant, Virtual Artist (which involves facial avatars that instantaneously brings certainty and confidence in buying their products), Inhalio (fragrance perfume IQ system which allows shoppers to smell the superbness without a single spray on their sensitive skin), the Pantone test (which recommends beauty-holics what suggested products would totally glam them up) as well as Instagrammable make up experiments that don’t even require a penny or a smear. 

(Source: Milled)

Virtual consultations provide customers with more confidence in their purchase decisions and, at the same time, provide jobs to knowledgeable beauty advisors who otherwise may not have been able to continue their work in retail throughout the pandemic. 

(Source: The Verge)

Sephora Virtual Artist allows customers to experiment with their looks digitally and see how products would look on their skin before making their purchase. They can easily move across different palettes of foundations, eye shadows, and lip shades, and the like, almost like an Instagram filter. 

To heighten audience involvement, Sephora hosts workshops and mini masterclasses, now online, in which speakers from the various brands they carry come to introduce their products and share insights on how to use them. Some of these events feature celebrities from celebrity brands, such as supermodel Miranda Kerr for KORA Organics. These present exciting opportunities for audiences to meet the star founders themselves and ask questions to strengthen their bonds with the brand and Sephora. 

(Source: LVMH)

Physical stores are set up strategically, with expensive ranges in the front, mid-range in the back, and cheap products at the checkout counter. This tends to get customers to walk more, pique their curiosity, and incite them to shop until the last moment when they’re standing at the checkout counter. 

Before and after screenshots of Sephora’s redesigned mobile app. The new design, on the right, has a more user-friendly bottom navigation menu and a personalized greeting at the top of the page.
(Source: Think With Google

Similarly, Sephora is able to foster these shopping behaviours online with web cookies by tracking browsing history, including how many times one has viewed an item or added it to their cart or wishlist. It aids in the tailoring of product recommendations  (e.g. “New for you,” “We think you’ll also love,” or “Your next obsession!”) on the app and in emails that act as reminders, notifying that a product has been restocked or is on a limited time offer. Mr Charanpal said that there is an estimated 3.38 trillion worth of sales in carts alone, which Sephora could lose due to cart abandonment. Often customers are waiting for the right time to buy something, or for certain products in their cart to be restocked; hence, they simply need a little nudge to follow through with their decision. 

The app’s push notification inbox tool was recently developed to combat the common issue of customers accidentally closing promotional pop-up notifications before they’ve had a chance to properly check out the deals. Promotional notifications reside in this inbox so customers can go back and see the offers in one place. On top of that, this gives them a chance to revisit offers that they may not have wanted a few days ago but do want now. 

(Source: Braze

Furthermore, Sephora uses data across the entire timeline since they launched their app to recommend the best products catered to both customers who have larger basket sizes and first time customers who aren’t familiar with Sephora. Starter packs are based on what is popular among existing customers to satisfy the interests of these new customers. Campaign varieties range from new launches, to thematic campaigns, to competitive campaigns that encourage people to spend/shop more, whether it’s more frequently or in bigger amounts. Along with brand gift with purchase (GWP) campaigns and shop & win contests, the FOMO marketing is used extensively to motivate customers to keep coming back for more. 

To top it all off, Mr Charanpal explained how they try to limit the number of clicks to make a purchase to the fewest number possible, making the online shopping experience fast and smooth. It is also helpful for those fearful of technology or technologically inept to navigate their platform with ease. Sephora cleverly presents the lowest-hanging fruit – the carrot dangling right in front of a customer – and all they have to do is grab it.  

Since the launching of the Sephora app after notable market research that consumers use their smartphones foraging for honest reviews on Sephora products. Much ado about their worry on what they put into their skin, this wide customer base can be assessed, statistics-wise, directly by the consumers. Transparency of data, to the users, plays a big role in stimulating trust in sales. 

Through these interactions, Sephora can successfully trace and statistically tally the trends and thus can formulate the perfect e-commerce strategy in boosting demand, record beauty standards, reduce shoe leather costs in comparing which hue to purchase or which red roars louder, subdue every senorita’s social insecurities and pave the way to more free samples and make up tips whether you step in their stores physically or virtually. 

There is no correct approach in business and marketing. Consumer’s decisions are instantaneous, raw and though unpredictable, retail does not end there. Economies of scale are not anymore an obstacle. The market base will be at everyone’s fingertips. Businesses have the choice to reform, in structural indifference, to suit life after pandemic. 

Sephora has proven that online sales, online promotion and trust in e-shopping can be established, even if the world is not ready to accept its perspective yet. Visualisation has led Sephora to become the world’s model example in technology retail since 2013.

Forget liquidation plans or the turning in circles whether an online store would survive after the pandemic. There will always be a way to promote beauty in the world. Driving up the economy, Sephora’s expansion is likely to drive up the make-up industry as well. If more entrepreneurs and businesses take on their approach to selling, economic growth might jump start again.

Redefining Beauty as prestigious, powerful and practical; with every purchase, Sephora aims for every presence to be as pristine as the Eiffel could be.

Mr Charanpal has offered some tips to success when working within the e-commerce industry: 

  • After working with people who don’t like data, Mr Charanpal realised one can’t do fun stuff together if comrades just aren’t the right people of like interest
  • Learn Google analytics, it’s very useful in this industry
  • Learn how to organise complex raw data and put it into simplified table 
  • Take time to understand/know what’s there within the data, build an idea bank

so that once one starts working and team needs ideas, one is equipped

  • Some ideas from most of the big players (companies) tend to be hard to execute but many can be valid and are worth trying out 
  • Have a creative & analytical mind to structure campaigns and understand data 
  • Grit is a must to maintain cool under high pressure situations (e.g. dealing with site traffic during sales that start at 11pm-12am onwards). 
  • Keep a smile on one’s face: enjoy the challenge and the process. Mr Charanpal admits that he’s been at this for 3-4 years, yet he still feels like a baby learning something new and happy to teach the next batch, while they teach him their innovative new ideas too! 

Mr Charanpal added that there are no age or gender barriers for this profession. AirAsia’s head of e-commerce is 28 years old, he illustrated. The beauty industry is very female dominated while males are limited in proportion, so how do they survive? He thinks of it as a refreshing experience because he has been able to work with so many capable women. “Don’t be scared to go into either a female- or male-dominated industry!” As a minority, one can stand out further in the application process and may even gain higher chances of getting selected, Mr Charanpal explained. 

Q&A session:

Audiences have also enthusiastically pitched in their own questions during the event.

How does Sephora sell their House Brand beauty products with competing brands?

Mr Charanpal: Sephora has adopted the approach of “SYMBIOSIS” meaning: working together. Various brands pay a certain sum of advertising fee to Sephora to promote their own products to the wide customer base founded by Sephora through their e-commerce tactics. The challenge lies in the difference in level of the brands and their recognition (one wouldn’t compare entry level and midrange products to Pat McGrath). It is the ability of making every brand work together and providing the most personalised service and recommendations to shoppers in order to maximise revenue by the end of the day. Teamwork, with the augmented publicity of all brands tend to drive plus selling and increased profits.

How does one prepare to enter this field of analysing beauty queen behaviours?

Mr Charanpal: The degree and qualification is still stressed as most crucial as an entrypoint. Doing side courses on Google analytics, SQL, Quarries and Media Ads can boost your resume with an added touch of fun within understanding how social media works, the very apps that keep us glued to our phones. To increase one’s chances, finding the right job on Linkedln that can enhance your experience, connecting with the right people within the field and establishing connections with no fear, you never know who might be your sephora fairy godmother giving you the very opportunity you covet.

What if one is transitioning from other fields?

Mr Charanpal: Much to the optimism of many, other fields not directly related to e-commerce or retail are acceptable so long as the skills are transferable. This is namely: social media, graphic design and advertising expertise or those within this range. 10 – 20 hour courses provided online about data processing is surely to help one succeed in this position. In the e-commerce industry, having the right mindset and the desire to learn is still the most important. Young bright minds will do just well.

With this, Sephora has thus presented haut monde wisdom to maximise the economy in the most beautiful and efficient way possible. It might even be the first stage of a total makeover for the ever-nearing future of an online utopia.

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Written by: Twis & Michelle Cheong

Edited by: Pei Zoe

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