Sephora Direct Case Study by Hannah Mc Arthy

Sephora Direct: Case Study by: Hannah Mc. Arthy Published by: Harvard Business School

Assumptions q Sephora will at least have a minimum $ 1 million budget for social media, video, and mobile q Sephora will continue to update social media platforms q Ulta will continue to be Sephora’s main competitor q Online search advertising will be minimal, since a heavy amount of 2010’s budget went directly to online search advertising q Beauty Talk will still be available and maintained q Facebook and Twitter will still be current (still be heavily used by the public) q Sephora is focusing on the other social media sites, such as Pinterest and Instagram q Sephora’s target market will not change, it will remain women between the ages of 25 -35

Sephora’s Problem Bornstein, senior vice president of Sephora, wants to double her budget in social media, video, and mobile for 2011. q Justify Sephora’s need to increase the budget for social media, video, and mobile q It is currently less than 5% of the marketing budget q Allocating the budget to make the biggest impact q Metrics need to be put in place q Return on investment needs to be found and calculated

Recommendations q Come up with a specific marketing objective for social media, video and mobile q Increase focus on non-traditional marketing while integrating it with the traditional platforms q 60% of online sales are more than $25/month, compared to 40% who do not shop online q Survey customers in-store and online after checkout q Compare Sephora’s social media, video and mobile to its main competitor to ensure Sephora will not get left behind q Come up with common metrics that can be taken across multiple platforms q ROI q Conversion Rates

Implementation q Implement the social media, video, and mobile objective to focus on extending customer service and driving sales and leads to Sephora. com q Help narrow down to see if these platforms are performing q Survey at in-store and online checkout and ask what marketing mechanism encouraged them to purchase from Sephora q Facebook, Twitter, Catalog’s, etc. q Both in-store and online to get rid of bias q Integrate social media, video, and mobile with Sephora. com and traditional media q All social media should be linked to Sephora. com q Magazines have social media information or QR codes that lead to social media, video and mobile information q Benchmark Sephora’s social media, video, and mobile to Ulta q Number of tweets, posts, uploaded photos on various media platforms, video’s on You. Tube ( Burke)

Implementation q Calculate ROI and conversion rates to calculate where to allocate the budget and to justify non-traditional marketing budget q ROI – Social Media Value Chain (Exhibit 14) q Derived Value – Investments/ Investments 1. Measure Engagement (Followers ) 2. Measure the Social Media Impact (Benefits) 3. Compare Investments from Derived Benefits q Conversion rates – see how Sephora’s digital marketing platforms bring visitors to Sephora. com q Google Analytics q Goals and Advanced Traffic Segments q Goal: Destination (Sephora. com) q Create a funnel for the goal (path you expect people to take)