CUSTOMER EXPERIENCE MANAGEMENTASSESSMENT 2 – RESEARCH REPORT

Student name: Thi Phi Khanh DinhStudent number: 0197996TLecture: Donna GillDate: 12/11/2017

INTRODUCTION

The beauty industry has increasingly grown over the last decades when 'everything else' is in

decline, which is enjoying the profits of both women’s and men’s desires. When it comes to

activating beauty shoppers, Sephora is one of the most favourite beauty companies that has more

than 2,300 stores spread over 33 countries (Sephora, 2017). Halzack (2015) said that Sephora has

changed the beauty industry not like anything before, which means Sephora has gained traction

with shoppers by offering an in-store experience that is distinct in the beauty marketplace. It is

said that Sephora has filled in the wide chasm between those experience. It has an assortment of

upscale brands and trendy store design that give it a more exclusive luster than a drugstore. And

this make Sephora more accessible than a department store because customers can test out all the

products for themselves. This report will identify, analyze and research the customer experience

when they purchase Sephora products. By an online survey and other existing customer datas

will support this report with strong agurements.

METHODOLOGY

This research was conducted through a questionnaire with a total of 11 questions. There were 10

participants aged from 18 to 50 living in Sydney and the period of time collecting results was

from 29/10 to 05/11/2017. The questionnaire survey and responses were done and accumulated

online via Google Docs then automatically divided into pie charts, texts and column charts which

could be found in the appendix below.

PERSONAS AND EXPERIENCE JOURNEY MAPS

Actions & Behaviours

Heavily influenced by online and interactive media

Spend much time in store an online browsing makup retailers like Sephora

Girl college students3 participants

to read reviews and see new products Love watching Youtube makeup

tutorials and read makeup blogs Seeking for sales associates during in-

store time Love promotions and discounts

Demographics

Aged from 18-23College students SingleTechnology savvy and makeup enthusiasts

Goals & Pain points

Look youthful and confident The size of service team is very

important to them Stay on top of makeup trends Keep to a budget as a fulltime student Experiment with new brands and

products There were others involed in-store

seeking for help like them Low budget

Millennial women 4 participants

Actions & Behaviours

Buy beauty products at least three times a month

Heavily influenced by online and interactive media

Purchase richie products with high quality

Refer shopping online and alone in-store

DemographicsAged from 25-32Single, living alone Business women Technology savvy and makeup enthusiasts

Goals and paint points Want to be trendsetter and approach to

the newest products Want VIP/Exclusive treatment Convenience is key Value for money is important

Don’t want spend much time in store

Middle-aged women 3 participants

Actions & Behaviours

Buy beauty products once or twice a month

Have interest in self-improvement Feel too old to learn new technology

techniques Unlikely to switch brands Often seeks advice from family and

friends

Demographics Aged from 45-50

Goals & pain points

Married, have children Subtainable jobs with high incomes Moderate tech-users

Look youthful Willing to spend more money on

items that look good on them Want someone ‘same age’ to assist

them Hard to find products that fit their

needs Not tech savvy so don’t like the online

process Confused about new products

DISCUSSION

As the the generative research results presented above, there are 3 key customer experience issues which are: the online experience, the service team and the price, which will be compared among Sephora with its competitors, Mecca and Myer. Despite the later launch in the Australian beauty industry where have many strong and well-organized competitors, Sephora has proven its position since December 2014 and continuously remained.

The online experience

When it comes to online experience, it includes online reviews, rating, beauty blogs, etc. However, most of the product there are based on 'top ranked and word of mouth' type. Sephora’s entry is unlikely to lead to a price war because global cosmetics houses generally do not like to discount, preferring to add value through gifts with purchase. However, according to Mitchell (2014), Sephora might become a destination for beauty shoppers because of its wide range of international and niche skincare, make-up and fragrance brands and its popular private label range, which accounts for as much as 40 per cent of sales. Sephora is now the dominant player in the European cosmetics market and has captured about 20 per cent of the market in the US. Otherwise, Mecca is said that leveraging content produced by consumers, such as videos, images, social content, as well as ratings and reviews, is a key part of how the brand is driving customer engagement and authenticity. Mecca’s head of digital, Anna Stockley, spoke at the Online Retailers Conference 2016 in Sydney that user-generated content impacts behaviour across the entire customer journey, and people are increasingly engaging with and expressing their opinion about products and brand freely in social media posts, online ratings and reviews, blog posts, online videos and more” (William, 2016). The way Mecca does this on its website is to aggregate content from customers and showcase what people are contributing to the community. Both of them are considered as big threat to Myer and David Jones on cosmetics and fragrance market. Myer’s strength is not online experience but it is on the way to adapt the forces of digitisation (William, 2016).

The service team

It is obvious that the Aussie service from Mecca is notably bubblier than at Sephora and Myer stores. In fine Aussie style, all the staff are friendly and enthusiastic and they make customers feel like you can ask them anything about their products. Three per cent of Mecca’s annual turnover is spent on training. In addition, employees receive a generous quarterly product allowance, in-store discounts, subsidised personal training, yoga and pilates. Horgan, founder of Mecca, holds frequent ‘lunch and learn’ sessions, featuring speakers on topics from financial management to mindfulness and business inspiration for her employees. Mecca is a flexible workplace, but because culture is important, the preference is for staff to work in the office if they don’t require flexible working arrangements. This comfortable workplace keep the staff always enthusiastic and full-of-energy when they interact with customers. The service team of Mecca encourages them to trust their recommendations and then purchase and come back. In Sephora stores, the Beauty Insider rewards program encourages loyalty, as client’s can save points from past purchases and receive exclusive sample sized products from them. The highly trained staff can assist and educate clients on all beauty needs and provide technology in store to show clients how other users felt about those products. The combination of technological innovation, staff training and a rewards program creates an experience unlike any other beauty retailer provides. Sephora has super friendly sales associates and providing amazing customer service. In Comparison, Mecca and Sephora beats up the service staff of Myer because their staff have less customized products to focus on while at Myer, staff has to handle much more work on other kind of products not only cosmetic department.

The price

Sephora, Mecca and Myer have some same brand such as Bobbie Brown in Mecca and Myer, Clinique in three stores. However, the prices may be slightly higher or even higher than in different markets. The most obvious price differences are in the company’s own brand, Sephora Natural Volume Mascara, the price of which in US is $US12.84 or $US12 which includes an average sales tax of 7%, when this was changed into Australian dollars, $15.66. The same product was selling in its Sydney flagship store at $25 including GST, making it a massive 60% more expensive than the US. Another example is the Formula X Nails, a brand owned by Sephora, which was selling in the US for $US11.24 including tax, which was $13.70 Australian dollars. But the product was selling in Sydney at $20, which made the product more expensive in the US by 46% (Feguson and Cormack, 2014). According to the pricing comparison on the website, Sephora can definitely be cheaper than Mecca, where is known for high-end and luxury products. Most of the customers was disappointed at the price of Sephora because it is much higher than the US price. (Feguson and Cormack, 2014).

In addition, Myer is in threat due to the poor performance of Australian department stores varying broadly (Bailey, 2017). It’s because of the poor service, botched online strategies and a host of other operational and marketing issues. Otherwise, other retailers, for instance, Sephora and Mecca, have dramatically grown in recent years. Sephora and Mecca are positively expanding in Australian beauty market due to their right management strategies.

CONCLUSION

From the above results, it can be concluded that customer service is the key of the business strategy and the needs of the customer. Each group has different goals and pain points during their experience journey. And the way they approach to the products is also different from the others. If Sephora want to expand in the Australian beauty market, the biggest opportunities lie within the skincare and cosmetics space, the brand will need to create innovative experience-based ways to stand out from their competitors. Concentrating on millennials, which are second only to baby boomers (middle-aged people) when it comes to spending on beauty products, is one way to break through the noise. It is said that Sephora has been the expressive change agent in the industry by shifting the unique from the traditional brands to kind of becoming a laboratory (Halzack, 2015).

REFERENCE

Bailey, M. (2017). Department stores: If history is any guide, Myer and David Jones’ strugles will continue. Retrieved from http://www.abc.net.au/news/2017-10-30/department-stores-history-suggests-retailers-will-struggle/9099876

Halzack, S. (2015). The Sephora effect: How the cosmetics retailer transformed the beauty industry. The Washington Post. Retrieved from https://www.washingtonpost.com/news/-business/wp/2015/03/09/the-sephora-effect-how-the-cosmetics-retailer-transformed-the-beauty-industry/?utm_term=.8c382940f390

Ferguson, A. and Cormack, L. (2014). Sephora in damage control over broken Australian promise. The Sydney Morning Herab. Retrieved from http://www.smh.com.au/business/retail/sephora-in-damage-control-over-broken-australian-price-promise-20141219-12amob.html

Mitchell, S. (2014). Beauty retailer Sephora to open stand-alone stores in Australia. Retrieved from  http://www.afr.com/business/beauty-retailer-sephora-to-open-standalone-stores-in-australia-20140409-jyw90#ixzz4yD2e3JZb 

Sephora (2017). About us. Retrieved from https://www.sephora.com/about-us

William, A. (2016). How Mecca’s user-generated content strategy drives customer engagement. Retrieved from https://www.cmo.com.au/article/603816/how-mecca-user-generated-content-strategy-drives-customer-engagement/

William, A. (2016). How Myer is leveraging technology to boost customer experience. Retrieved from https://www.cmo.com.au/article/603811/how-myer-leveraging-technology-boost-customer-experience/