Sephora Final Essay

1488 Words Dec 11th, 2014 6 Pages
Sephora Direct

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?

According to 2010 data, 45% of Sephora's media spending is in retail marketing that includes catalogs, store animations and print followed by 35% in Online marketing that includes search, affiliate and social media and 20% in Beauty Insider marketing that includes mails, gifts and events. The major chunk of media spending goes to traditional retail spending which in my view needs to be cut down. The reason for cutting catalog and print costs is that each day
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Retail stores and manufactures have their personal fan loyalty base. Online merchants compete with Sephora on a large scale as they offer discounts and specialty items and multi-brands. MAC products are not sold by Sephora.

The company should be most worried about ULTA beauty store which is a national chain of beauty stores that brings together designer fragrances, drugstore staples, salon-only hair products as well as a growing selection of prestige cosmetics like Benefit and smash box. There are 331 stores across USA. Ulta has 21,000 in-store products combined with cut and color salons. Unlike Sephora which is located in malls, Ulta is located in strip malls which is convenient for many people as it saves time and also provides easy shopping experience to the customers particularly women. Ulta stores have critical mass of prestige appeal. Ulta offers inexpensive beauty staples found in retails like target along with easy access to prestige treats. Ulta also has an edge with women older than 44 years as these women tend to be more loyal and also ulta rewards them back in terms of savings. Ulta has its own personality of being approachable and in style. One customer termed Ulta as Sephora's nemesis.

4. What metrics do you propose Sephora Direct use to measure the success of its digital efforts going forward? Why?

a. One important metric is to

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