Building customer loyalty in an ever-changing retail landscape is difficult.
The retail industry is incredibly tough and competitive, with even some the biggest and most powerful organizations often failing to build a stable and predictable customer base as business models change to favour giant online retails. Customer loyalty is no easy feat, but a shining example of a company that has succeeded in developing devoted customers through a unique retail experience is Sephora (also take a look at this video to see how Indigo uses Idea Management System to change the customer experience).
Mitigating All Risks for First Time Buyers
It is not easy to claim a chunk of the $382 billion global beauty industry as your own, but Sephora has been able to successfully navigate this marketplace and sell their high end luxury products to millions of individuals worldwide. How? By identifying and eliminating risks to purchasing beauty products. These risks are the top three reasons why a customer may not end up purchasing from Sephora.
- Our own personal perception of beauty and the products we choose that can react differently on one individual from the next.
- Beauty products are a luxury and not a necessity.
- Experimenting with a new beauty product can have an unfavourable and embarrassing result (i.e. choosing a lipstick that makes your teeth seem more yellow).
Where Sephora excels is in creating a risk-free environment for customers by:
- Allowing customers test the product prior to committing to purchase it.
- Allowing customers to obtain samples and try the products at home (and for those that can’t be sampled, the company allows customers to return or exchange a product as long as they have the receipt).
- Each store is equipped with professional Sephora stylists who provide real-time guidance and make perceptive product recommendations. Intuitive Color and Skin IQ tools are also readily available for customers to take advantage of.
By mitigating risk, customers enjoy a pressure-free shopping environment that is fun and engaging. It also helps that the store has a variety of product options for the same beauty product. From Marc Jacobs to Stila to Kat Von D, the company makes it difficult for anyone to stroll out of their store without toting the easily recognizable black and white Sephora bag.
Creating Repeat Customers, One Customer at a Time
Selection, stylist advice, and an open atmosphere all go into creating a positive and memorable customer experience. But the company makes use of other key tactics that turn one-time customers into repeat customers:
- Every customer leaves with a selection of exclusive or best-selling samples in their shopping bag.
- Customers immediately begin accruing points with every purchase which eventually earns them “VIB” or “Very Important Beauty Insider” status that offers a variety of exclusive perks, such as invitations to private events, early access to sales, and customers earn a silver VIB card (points can also be redeemed for deluxe sample size products). VIBs can shop from home and write reviews, share expert advice, and more on their beauty products/
- Relevant, consistent, and aesthetically-pleasing emails that are delivered at predictable frequencies keep customers interested and up-to-date.
Finally, what Sephora has truly mastered where so many other large corporations have failed is cross-selling. While many companies try to sell customers products that are “similar” to ones purchased in the past, most customers find this to be a cheesy and unwelcome sales tactic. Sephora’s recommendations, on the other hand, are invited if not encouraged by customers. Remember the company’s readily available Color and Skin IQ tool? When a customer uses this insightful technology, Sephora gets a virtual “snapshot” of you, such as what your skin tone, skin type, and eye color is. They are then able to make intelligent and useful beauty suggestions. It’s a win-win!
Some would say that Sephora has mastered the art of building a steady stream of loyal customers by providing a top-notch customer experience, and it would be hard to disagree. The customer service experience that the company is able to provide leaves customers feeling confident and satisfied with their purchases, but perhaps more importantly, customers trust the company. In the beauty industry which is often regarded with a large dose of skepticism, this has proven to be the key to Sephora’s success.