Sephora Looks to the Past and Future
Sephora, the world’s leading omnichannel prestige beauty seller, keeps catapulting forward, despite today’s complex macro-economic and socio-political climate.
Its goal is to win globally, by swiftly reapplying ideas around the world and driving culture and trends. Diversity, equity and inclusion remain firmly at its core.
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From his eighth-floor office in the Paris suburb of Neuilly-sur-Seine, Sephora president and chief executive officer Guillaume Motte commands a sweeping view of old-style zinc rooftops and soaring, glassy towers in La Défense. The mix is apropos as he looks forward and back through a global lens while discussing, during his first interview since taking the retailer’s reins on Jan. 1, his vision for Sephora.
An executive who had worked at the retailer before, Motte succeeded and reports to Chris de Lapuente, chairman and CEO of the Selective Retailing division at Sephora’s parent company LVMH Moët Hennessy Louis Vuitton. Motte’s appointment came at a critical moment for Sephora, the only global prestige beauty retailer, as it expands geographically and vies head-on with increasingly omnichannel players.
“My vision is [for Sephora] to be the most loved brand and best prestige beauty retailer for three groups — our customers, our brand partners and all of our teams,” he said. “The U.S. is giving incredible strength.”
According to industry sources, Sephora sped past the 12 billion-euro sales mark in 2022 and is on pace to achieve its goal of 20 billion euros over the coming years. It also placed first among beauty retail specialists worldwide, Euromonitor International rankings show.
“I’m blown away, because I see a truly winning Sephora in a lot of our markets,” said Motte, who declined to comment on the figure. “The first thing that strikes me is our passionate people, our passionate teams, their commitment, their engagement for beauty. We have 46,000 people working day and night to promote beauty, who live beauty and want to share this beauty.”
Sephora recently carried out an internal survey, which garnered a 90 percent participation rate and 110,000 comments. “The pitch was: I want to hear each of your voices, because this matters to me, and I know how important it is to build this community for our teams,” said Motte. Mission accomplished. The study’s engagement rate came in above 80 percent.
Here, Motte talks about leveraging that connection to continue Sephora’s momentum.
Your remit includes making Sephora the most loved beauty community. How do you describe that community?
G.M.: It’s not only people walking in. It’s actually people gelling with our beauty advisers and people. Second is our incredible product offer. We are expressing a very strong point of view [on beauty], which is about trends, but also about how we want to support some of our communities. Sephora is the community where beauty beats and things are happening. Third is our brands. From Day One, we’ve been obsessed with building our brands and innovating.
We’ve always believed in brick-and-mortar. We have 2,700 stores across 35 markets. That’s a big investment, and we continue to open stores. This has a purpose — to engage our community and make sure that it can learn, play and discover the products. There is digital and omni [channel] that we’ve developed, which is another way to develop our community.
How is this community evolving?
G.M.: Our point of view is around inclusivity and diversity. From Day One, we’ve said and we’ve driven the fact, that beauty is personal, that you can come to Sephora the way you want, the way you truly are. We keep reinforcing this point. I would hope that we can attribute a small part of the evolution of some of society to Sephora.
Our community is also evolving to give more back to where we operate. For instance, our Classes for Confidence.
What is the importance of the U.S. as a market, and how does it fit into Sephora’s overall strategic vision?
G.M.: It is the biggest prestige beauty market in the world and probably one of the most innovative in terms of new brand ideas. It’s also very developed in terms of omnichannel, which pushes our innovation. It is a key market, but one out of 35.
Winning in the U.S. as we are doing is key for Sephora overall. Our relationship to the U.S. market is win-win. There are a lot of innovations which are coming from there and a lot are given to the U.S.
What does the U.S. bring to the party? In terms of product differentiation, innovation — it’s amazing what we’re able to tap into. Because we are the only global prestige beauty retailer, we have the ability to give the opportunity to these brands to conquer the world with us.
If you’re a founder with a great idea, with a great brand, if you are American, you start with Sephora U.S. But the great thing is, we open the world to you. The 35 markets we are in represent more than 80 percent of the prestige beauty market.
Second, innovation. By its scale and size, Sephora U.S. has the ability to continue to innovate and has led some innovation. Sephora’s first website was in the U.S., in 1999. We’ve been building this e-commerce business like crazy, and now it’s a real strength.
On the other hand, I would say Sephora U.S. benefits from other innovations in the world. The first country to introduce Click & Collect, or in the U.S. we call it BOPIS [buy online, pick up in store], was France, for example.
What’s the significance of Sephora’s 25 years in the U.S.?
G.M.: First, it shows the long-term commitment of our largest shareholder LVMH, because the start was a bit of a difficult one. Unless you’re a true entrepreneur like Bernard Arnault, unless you believe in the brand, entrepreneurship and leaders being able to make a difference, I’m not sure you’d hold to the adventure.
Twenty-five years is an incredible success, but I’m more looking forward now. We’re still a very young company. There is so much more to do, to grab. That reinforces our absolute need, obsession about innovation, brand-building, differentiation in offer and building these communities. For me it’s an inspiration — our success — but it’s only the beginning.
How do you think and operate globally and locally simultaneously?
G.M.: Sephora is a multibrand retailer. We win locally, with our local customers. That’s who we are, how we operate, where the accountability of our P&L is. And we think global, we strategize global. We have a global game plan and give access to the globe to our brand partners and innovations. When I strategize our key numbers, our must-win battles, our initiatives, these are global.
We have the ability to tell a brand: “We will build your brand where you were born.” We grow them together in their local markets, and then give them access to the world when they are successful and have the strength. That’s something that we intend to push and to drive even harder.
What have been some initial learnings as Sephora has globetrotted into the U.K. and further into Germany?
G.M.: The world has changed over the past 20 years. Sephora is truly global. We’re answering a customer need which probably wasn’t there before, or we didn’t have the ability to really trigger. What excited me in the opening of Westfield in London and the 5,000 people waiting to enter was the power of the brand, the excitement and the trends that we’re bringing. Germany is the same story.
Asia is another key market, and Sephora has tested some “stores of the future” there. What are some key takeaways?
G.M.: We launched the first store in Singapore, and we’ve just opened another one, on Nanjing Road in Shanghai. [We have an] obsession for experiential retail and innovation. We want our stores to be places where our communities discover the product, the trends and play.
You have some pretty cool ideas — like you can lift the product and have the story of the ingredients. We’ve devoted a big section of our stores for classes. There is a lot of demand from people to have services. We’re truly an experiential store with a lot of innovation. So very excited by Asia, by the growth. You should see this again as cross-fertilization.
At the end, my job is I define the global game plan, but there is part which is fostering innovation, because it’s happening in a lot of our markets. How do we quickly pick up the best ideas and roll them out? This is an incredible strength.
What are some other key geographies Sephora has to conquer around the world?
G.M.: [I’ll share] my dream and then my short-term priority. I see no reason for Sephora not to be present in all major cities of the world, because the customer exists there. This being said, my short-term focus is on our 35 markets. They cover already 83 percent of the prestige beauty market. We have room to grow in our existing categories: in makeup, skin care and fragrance. We have room to grow in new or newer categories. Hair care is an incredible category opening up to prestige, body and sun care — same thing. These categories were more in masstige types of environments. We intend to create a big space for prestige beauty with these categories. It doesn’t mean we’re not going to open one or two markets, but directionally, we already cover almost 100 percent of the world.
Which are some new ways Sephora melds diversity into its corporate ethos, operations and product mix?
G.M.: Diversity, equity and inclusion are really at the heart of Sephora. This being said, we’re very intentional on some key initiatives. If I take gender equality, I’m pleased to say that in my leadership team, five out of nine leaders are women. Two of them are leading very important regions — Europe, Middle East and Asia.
If we were to look at our top-100 leaders, the number would be 75 to 80 percent female. So that’s already an incredible commitment that we have.
The U.S. has been very powerful on some [DEI] initiatives, such as the 15 Percent Pledge and the way we support through our accelerator program. I like these initiatives that exist in a lot of parts of the world. We want to continue to be intentional.
What else is notable category-wise at Sephora?
G.M.: Makeup is our fastest-growing category. There is still a lot of innovation and we intend to continue to grow makeup. Skin care — same thing. In fragrance, we can play a bigger role. It’s a growing category. We have good market share for fragrance, but we could do with our brand partners even a better job.
Sephora Collection within all this is not a category, it’s our love brand. It carries our name and all our commitment in terms of sustainability and product. Sephora Collection is an incredible brand to recruit customers to prestige beauty. This is our way to make sure that we grow the pie in most of the markets.
We intend to stay very focused on prestige, because that’s a clear line where we define who our customers are and what type of brands we’re going to sell and develop together.
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