The Sephora Story: The Retail Success You Can't Makeup

AUTHOR’S NOTE

Sephora did not respond to requests for interviews. All interviews and quotes come directly from online presentations, news articles, books, case studies, as well as Sephora’s website and press releases.

We aim to be the best-loved and most-admired beauty community in the world.

—CHRISTOPHER DE LAPUENTE,

CEO, Sephora

Never underestimate any woman’s desire for beauty.

—ESTÉE LAUDER

INTRODUCTION

Very few industries and retailers these days can say they are Amazon-proof or even Recession-proof. That is unless you’re in the global cosmetics business, which is expected to grow 7 percent a year over the next three years—reaching 806 billion dollars by 2023, according to Orbis Research. ¹ Companies like Sephora, and its competitors, Ulta, Dermstore, Nordstrom, and Macy’s, are no exception. In fact, since its founding in 1969 by Dominique Mandonnaud, Sephora has grown from a small perfume shop in Paris to one of the leading beauty product retailers in the world. Beauty product retailers like them, which carry cosmetics, skin care, body care, fragrance, nail color, beauty supplements, styling and beauty tools seem to be impervious to the ebbs and flows of the economy. When other industries and companies have floundered to stay afloat, Sephora has adapted, innovated, and risen above.

Some argue the reason the beauty industry, as a whole, is thriving is because of all the rampant societal pressure and norms that increasingly suggest that younger is better. Globally we are seeing an increased aging population² who simply can’t abide wrinkles, dry skin, blotchy skin tones, freckles, age spots, adult acne, thinning brows, upper lip fuzz, broken, damaged, or graying hair, or any other unseemly looks on the beauty don’t lists. It’s not just the aging populations that are feeling the heat and raising the demand for more advanced beauty products. With the widespread use of social media—YouTube, Facebook, Instagram, Twitter, Snapchat, and TikTok—it’s nearly impossible for young people to escape the social pressure to appear beautiful at all times. Some critics even go so far as to blame the cosmetic and beauty industries for raising the standards of beauty in order to market and prey on an unsuspecting public. While the beauty industry isn’t completely blameless, it’s not solely responsible either. The desire to be young and beautiful dates further back than the inception of Instagram, or even the makeup counter, for that fact. Companies like Sephora have found success not because they have marketed or preyed upon the insecurities of individuals, but rather they have anticipated their deepest needs, desires, and hopes and responded in kind. Well aware that feeling beautiful is more than skin deep and is an intrinsic desire, Sephora meets its customers where there are.

"Companies like Sephora have found success not because they have marketed or preyed upon the insecurities of individuals, but rather they have anticipated their deepest needs, desires, and hopes and responded in kind.

In fact, the name Sephora harkens back to beauty’s historical (or more accurately literary and etymological) origins. Sephora is a mashup of sephos, which means beauty in Greek, and Zipporah, which was the name of the Biblical Moses’s beautiful wife, whose name in Greek is spelled Sepphora.

The desire to be look and feel beautiful and youthful is not something Madison Avenue advertising agencies and cosmetic companies invented. Long before Insta influencers were trying on mascara and making serum recs, in prehistoric times red ochre was used as a way to decorate the skin (and discovered in excavated graves of our female genetic ancestors) and over a thousand years ago women and men painted their eyes with kohl, sprayed perfume, used red rouge lipstick,³ and soaked in warm baths of milk and honey. The desire to luxuriate, accentuate one’s most beautiful features, satisfy the senses, or even change one’s look has been a driving force in humanity for eons.

A Very Brief History of Makeup: I Am Ready for My Close-up, Mr. DeMille

Though the desire to be beautiful may be as old as civilization itself, Teresa Riordan’s 2004 book, Inventing Beauty, argues that as photography became more popular and widespread (somewhere after 1870) cosmetics did as well. Prior to this, makeup was reserved for the tawdrier members of society, i.e. the euphemistically called Ladies of the night, and of course, thespians whose faces needed to stand out under the harsh lighting and seen from the back of theatre. But with the rise of photography and cinema, cosmetics became mainstream. As early as the 1880s, many budding entrepreneurs saw the opportunity to create cosmetics so their customers could look as beautiful as the women in the magazines and advertising. Most of these companies were independently owned and operated by women—the most popular being the California Perfume Company, which later became Avon. Individual agents—mostly women—sold beautifying creams, lotions, and facial tints to their friends and family members. This unique business model allowed women to become more financially independent. It also meant that with more women working in the cosmetics industry there was more money to spend on cosmetics. It’s a win-win formula that still is winning today for similar tier-marketing cosmetic companies like Mary Kay, Arbonne, and Beautycounter, which afford women the opportunity to earn money as entrepreneurs, cosmetic agents, and makeup artists.⁴

"As early as the 1880s, many budding entrepreneurs saw the opportunity to create cosmetics so their customers could look as beautiful as the women in the magazines and advertising. Most of these companies were independently owned and operated by women—the most popular being the California Perfume Company, which later became Avon.

Even during serious economic downturns, cosmetic sales steadily increased.⁵ Where other industries completely collapsed, makeup was a simple, small luxury a woman could afford in desperate times. Instead of rationalizing buying a dress or a pair of shoes to feel pretty, a woman could simply purchase an inexpensive tube of lipstick and feel instantly glamorous.

Modern Cosmetics and the Beauty Industry

By the early 1900s, however, makeup had become a mainstay, not to mention part of the lexicon. Perhaps the most notable makeup artist of this era and the founding father of the modern cosmetics industry is Max Factor. In the early 1900s, he was a famed wigmaker and face artist for Hollywood studios and he developed a greasepaint foundation that didn’t crack or flake off.⁶ It was an instant sensation. It wasn’t long before actresses began wearing it offscreen as well. Factor went on to develop lip gloss and eyebrow pencils, and pan-cake compact of powdered foundation called Pan-Cake Brand Make Up. Many attribute the term makeup (now just one word) to him because of this. It’s considered the first time the term is seen or used in media advertising. By the 1920s, he took his products to the mass market with a promise to his female customers that they too could look like movie stars. Ad copy along with featured stars like Judy Garland, Rita Hayworth, Lana Turner, Merle Oberon, and Ella Raines, promised This is make-up that actually creates glamour . . . . The Screen Star Secret that beautifies instantly. Who wouldn’t want to look like Rita Hayworth or Lana Turner?

Max Factor hit pay dirt. But, he wasn’t the only one.

Around the same time in 1915, T.L. Williams started Maybelline Company, though at first it was only an eye-makeup company. In truth, the makeup was his sister Mabel’s idea, or rather a result of her resourcefulness. After singeing her lashes off by accident, she mixed coal dust and Vaseline and applied to what was left of her lashes to duplicate the look of real ones. She discovered she could make them look even longer, replicating the look of the big-eyed Hollywood starlets like Mary Pickford. A savvy businessman, her brother packaged the concoctions (without actual coal) in a tin and called it Lash-Brow-Ine. He named the brand itself Maybelline by combining Mabel and Vaseline.⁷ Our idea of what constitutes an acceptable lash length has never been the same since. Thanks, Mabel.

For the first part of the twentieth century the makeup industry grew as the proliferation of women’s magazines (which required ads for makeup and other popular items for women) also flourished. However, the way in which customers purchased and experienced makeup began to change by the end of World War II. Prior to this time period most makeup was typically available by mail order, behind the counter at department stores, or through independent agents. But thanks in large part to Estée Lauder, founder of the eponymous brand of makeup that still exists today, the cosmetic buying experience fundamentally changed. In 1946, Lauder began what was to become a massive makeup empire though a particularly revolutionary approach—by meeting women where they were. Or should we say, where they would be a captive audience to hearing about skincare. Where was that? At beauty salons of course. With women stuck under hair dryers, she gave away free samples as well as bonus gifts of the skin cream that she developed with her uncle. In addition to her unique marketing and sales approach, she allowed customers to interact with her products. Eventually Saks Fifth Avenue placed an order, and it was there that she continued to give away free samples, added gifts, and focused on recurring personalized marketing techniques to build brand loyalty.⁸ Her approach proved successful. Since launching the Estée Lauder brand in 1946, the Lauder family has expanded to include a number of popular brands as well, including but not limited to Bobbi Brown, Clinique, Origins, Glamglow, Prescriptives, La Mer, MAC, Smashbox, Too Faced, Aerin, Becca, haircare lines Aveda and Bumble and Bumble, and numerous fragrance lines. In many ways Lauder was the pioneer of the modern cosmetics industry, and paved the ways for stores like Sephora, which not only carry most of her brands today but also meets the customer where they are (not in beauty salons, but rather online, in store, on social media), offer free samples and free gifts with purchase, showcase interactive displays, as well as provide recurring personalized marketing and brand loyalty programs.

"In 1946, Lauder began what was to become a massive makeup empire though a particularly revolutionary approach—by meeting women where they were. Or should we say, where they would be a captive audience to hearing about skincare. Where was that? At beauty salons of course.

The modern cosmetics and beauty industry (and thankfully the science behind it) has come a long way, and not just from the days of Cleopatra’s Egypt, but from Max Factor’s greasepaint and pan-cake makeup tins as well. Gone are the days of painting one’s face with poisonous ceruse and other hazardous lead- and arsenic-based methods. In addition to scientific and technological advances in the past 150 years, the entire beauty industry has grown exponentially and become an integral part of the growing global economy.

Sephora’s Origin Story Linked to the Past

Sephora has been one of those companies leading the way for the past fifty years. They’ve been doing so both differently and better than their competitors thanks in part to their strategy, which Dominique Mandonnaud introduced when he opened his small perfume shop in Limoges, France, in 1969. Perhaps inspired by Estée Lauder’s approach, or perhaps his own need and desire to interact with the product, Mandonnaud wanted to create an experiential encounter. Where he lived, most women and men shopping for perfumes were separated from the products by a counter, which was managed by a sales associate. There was very little experiential nature to the purchase. He wanted to interact with products when he shopped, and thought customers would want to too. He didn’t just want to sell a product—he wanted to provide an experience. Come in, walk up to the perfume, hold it in your hands, spray it on your own wrists, and savor it—maybe go home with a sample to try out for a day or two. Though in 1969 there was no data to show, as there is today, just how compelling and effective this experience actually was in order to close a sale, Mandonnaud knew intuitively that this was where the beauty industry needed to go.

Much like Lauder, Mandonnaud believed the future of beauty meant removing the barriers between the customer and the product—and it meant meeting the customer where they were. Like Max Factor, Mandonnaud believed his customers should feel extremely special, as if they were walking onto a theatrical stage and playing the starring role in their own lives. In fact, up until 2018, the sales floor in Sephora was called the stage, and all