Sephora and Sephora.com
The Business Model
Sephora was first founded in 1969 at France. It was opened as a speciality perfumery retail shop. It was considered as a pioneer in retail due to the way Domique Mondonnaud designed and operated. In July, 1997, Louis Vuitton Moet Hennessy Group acquired Sephora and had turned it into one of the leading store in cosmetic, fragrance and toiletry industry.
Sephora department store are well – known for is distinctive store layout and delivers high – end beauty care to customer. Sephora’s open – sell retail philosophy offer customer the freedom to mix and match from a vast range of product offer in store. Customers also “look forward to an exciting experience with entertaining animation events and trendsetting service.” (The LVHM Annual Report, 2013, pg. 101)
“Sephora is highly regarded as a beauty trailblazer, thanks to its unparalleled assortment of prestige products, unbiased service from experts, interactive shopping environment, and innovation.”, according to Sephora’s website (“About Sephora”, 2014). Nowadays, Sephora recognized worldwide and below is figure that illustrate Sephora’s operation:
• 1,541 stores in 27 countries internationally
• 300 base store in North America .
• Sephora carries over 17,000 products from over 250 brands.
(source: The LVMH Annual Report, 2013)
Sephora is listed as selective retailing branch according to The LVHM Annual Report, 2013. Its operating and services activities are as followed:
• Individual department store.
• Sephora inside JC Penny store since October, 2006. (JC Penny is one of the major retailer which is popular in North America suburban)
• Online shopping channel: Sephora.com
• Recently, Sephora successfully launch mobile app: “My Sephora”...
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... the basis of group age as Sephora offers a variety of product to women and men between 15 to 70 year of age. However, due to the maturity of Australia Industry Life Cycle, it is suggest that Sephora should target two particular age groups:
• People from the age of 45 to 55+:
The age group of 45 to 55 accounted for 25 percent of the industry total revenue of $3.6 billion. With just 3 percent different, people from the aged group of 55+ considered as a major markets for Sephora. Currently, there are over 7.2 million people aged 50+ (around 32 percent of Australia total population). And within the next five year period, the industry anticipated an increase of 2.4 percent within this population. The people in this age bracket also have a significant purchasing power hence, they are considered as the largest consumer – buying group.
• People from the age of 25 to 44:
Macy’s intended to deliver enhanced shopping experiences to its consumers through dynamic department stores and online sites. In this regard, the company developed a North Star strategy that allows it to improve its sales growth and to develop its existing core activities. The company’s consumer research monitors, analyze and anticipate their needs and wants based on the changing market trends. This allows it to strengthen its customer base and also helps it in identifying new markets and customers. Macy’s also identifies different styles and designs based on various occasions and events that allow it to capture the changing preferences of its customers. The company also celebrates various iconic events to interact with its customers which
The company first needs to collect demographic and geographic information relevant to potential store location choices in order to segment its market. It is extremely important that the marketing team gather thorough information in order to ensure they are focusing efforts in areas where the company’s products will be best received. This will help them in achieving maximum sales.
Present day Federated consists of both Bloomingdale’s and Macy’s stores and operates in 34 states as well as Guam and Puerto Rico. While Bloomingdale’s and Macy’s provide both private and national brands and are similar in merchandising categories (men’s, women’s and children’s apparel, home décor, shoes, beauty, and accessories), they differ greatly in culture. Bloomingdale’s, being more upscale, targets consumers that are more concerned with trend and quality than they are price. Macy’s targets the more value oriented consumer and represents a broader Federated clientele. Macy’s represents 423 of the 459 Federated locations while Bloomingdale’s represents only 36 locations. Because I can better relate to the value conscious consumer of the Macy’s division and because they represent such a large portion of Federated, I will further explore their current characteristics and behaviors that suggest that they possess qualities of both monopolistic competition and oligopolies.
Locations average 10,000 square feet, and are a major hub for all things beauty, including cosmetics and unique salon products and services. The company claims its store layouts and wide array of merchandise and full service salons separate itself from online retailers like Amazon and generalist retailers like Target and Walmart. By snagging market share from competition, Ulta has been able to attract a new and highly lucrative demographic. Teenagers have been increasingly shopping in stores and are attracted to some of the new indie and trendy lines of beauty products. As Ulta keeps up with the latest styles, teenagers will continue to flock to stores.
Over the years, the American department store has developed and evolved as not only a commercial business but also a cultural institution. While it has weathered many storms and changes since its inception and throughout history, its most predominant enemy has been a change in the lifestyle of the American people (Whitaker, 2013). As the customer’s needs and wants have shifted, department stores have struggled to keep up with demands. It has been argued that the decline of the department store has been ongoing for the last 50 years (Whitaker, 2013). This dissertation aims to understand how the department store has historically played a role in consumer culture and spending, and additionally, how this has evolved and changed in today’s retail market. Although department stores may not be able to take all the credit for inventing modern shopping, they certainly made its conventions and conveniences commonplace. They set a new standard for the way the consumer should expect to be treated, the type of services that should be provided, and the convenience that should attend the process of acquiring the necessities and niceties of life all in one place. They made shopping into a leisure pastime. This environment meant shopping was a means of freedom to look around, pick up objects with no obligations to buy. As one historian remarked, department stores: “encouraged a perception of the building as a public place, where consumption itself was almost incidental to the delights of a sheltered promenade in a densely crowded, middle-class urban space” (Whitaker, 2006). Although this perception and view of the department store has changed over the years, this paper aims to follow the trail of how and why that happened.
Kohl’s also boasts a loyal customer base and strong brand equity. These strengths are critical to offset their weaknesses. Flaws include an imbalance on sales for men’s products and a lacking online presence. (Kohl's Corporation, n.d.) Another way that Kohl’s is actively counterbalancing their negatives is by capitalizing on opportunities. Kohl’s has found that their beauty sections are an immense source of opportunity. As a result, the company is expanding those departments in an effort to capture those sales that would otherwise go elsewhere. (Wahba, 2014) Finally, Kohl’s keeps the knowledge of their threats at the forefront of their decision-making. They understand that their coupon system can be abused and cause profit losses. They also recognize that price wars in their industry can also be very damaging. As a result, they are working towards more secure methods of offering savings and strategically making efforts to remain the leader for price setting. (Wahba,
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My company of choice for this report is Macy 's. 'The Magic of Macy 's ', as the company advertises it, has inspired me to shop there, take advantage of their incomparable discounts and great online shopping experience. Macy 's, Inc. is one of the largest department store chains in the United States of America. Macy 's manages stores under the Macy 's and Bloomingdale 's brands. I enjoy shopping at both of the company 's store brands, Macy 's and Bloomingdales. Bloomingdales provides a more personalized experience
Ron Johnson spent a great deal of time and money to promote his ideas of “stores-within-stores” by turning floor space into an area to house several branded boutiques. He did this in order to attract a target market of a wider demographic which includes age, gender, and generation. One of the m...
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