SEPHORA

Aim of Report: To offer Sephora [the selected brand] a detailed customer service improvisation and training package that will facilitate the enhancement of their service delivery. This in turn will enhance the outcome of their marketing activities, ultimately resulting in a better, more satisfied customer base. Therefore leading the company in a more systemized direction and increasing the sales of the company. Objectives of Report: To identify the company background and services offered by Sephora and to measure the strength and degree of quality of the services offered. To identify the gaps in the services provided as per standard service quality models and to establish a set blueprint for an improvised service delivery to fill the service gaps. To establish explicit processes to monitor close association with suggested blueprint and to assess results achieved thereafter. Coverage: This report will cover the following: Detailed background research on the Company, Brand, Products and Service Offerings. Detailed analysis of tangible and intangible cues in the stores based on the SERVQUAL Model [Berry, Parsu & Zeithmal, 1985] Suggestion on service improvisation to be in the form of a clearly defined service blueprint.

Introduction and Company Background: Dominique Mandonnaud founded Sephora in France in 1969. Sephora was originally called Shop 8, but Dominique Mandonnaud re-named Shop 8. In 1993 Mandonnaud merged the Biblical name, Zipporah (Moses' wife); with the ancient Greek word "Sephos" which means pretty. Sephora stores specialize in selling cosmetic and beauty care products. Sephora was founded in 1969. That one store later expanded to about 750 stores and 21 different countries. In 1996 Sephoras perfume outlet was opened in Paris. That outlet is the biggest perfume outlet in the world. In 1997 Sephora was acquired by Louis Vuitton Moet Hennessy (LVMH) a well-established conglomerate based in Paris. Sephora is a retailer company with more than 200 high-end brands and 13000 premier products in the cosmetics, makeup, skincare, hair products. It is a member of LVMH group that surrounds the most influential indulgence brands from all over the world. Currently, its the retailer of perfumes and cosmetics in US and the second largest is in Europe. It also offers the latest beauty trends, tips from the experts and whole selection of creative gifts. It is committed to excellence in quality and customer service and also well trained and dedicated employees. Products and Services: Sephora is a division of LVMH, the worlds leading luxury products group. LVMH luxury brands form a lineage stretching back into 18th century France. The ultimate expression of crafting, creative energy and vision, each is a byword for excellence. The philosophy of excellence and innovation at the heart of LVMH reflects directly in the spirit of Sephora and Sephora.com

WINES & SPIRITS:

FASHION & LEATHER GOODS:

PERFUMES & COSMETICS:

WATCHES & JEWELRY:

10 Cane Belvedere Bodegas Chandon Cape Mentelle Chteau d'Yquem Cheval des Andes Chopin Cloudy Bay Dom Prignon Domain Chandon Australia Domaine Chandon California Hennessy Krug Mercier Mot & Chandon Newton Ruinart Terrazas de los Andes The Glenmorangie Company Veuve Clicquot

Berluti Celine Donna Karan eLUXURY Emilio Pucci Fendi Givenchy Kenzo Loewe Louis Vuitton Marc Jacobs StefanoBi Thomas Pink

Acqua de Parma Benefit Cosmetics Fresh Guerlain Kenzo Parfums Laflechre Make Up For Ever Parfums Christian Dior Parfums Givenchy Perfumes Loewe

Chaumet De Beers LV Dior Watches Fred Omas TAG Heuer Zenith

New products are important to sustain growth, increase revenues and profits, and replace obsolete items. Sephora does a good job staying on top of what should be sold and how to go about. Almost every day, new ideas are brought about in the products they create. As time goes on Sephora reveals and comes out with new products (a product new to the world, the market,

the producer, the seller, or a combination of these). At Sephora, new ideas from many different places are generated and not only different products are sold but new colors, shades, fragrances are customized to the customers needs and suggestions. Sephora get their creativity and inspiration from Fashion Designers and Seasons. As time goes on trends usually change by the season so Sephora makes it their mission to come out with looks and shades that go with the current trend and style of the season. Given the fact that society is big on trends, Sephoras products, their designs and services are ever evolving and transformational. This transformation plays an essential role in the targeting, attracting and retention of potential and existing customers. Sephoras new products are debuted on their website www.sephora.com. To top it off, their new products are also talked about in numerous magazines like Cosmopolitan, Essence, Allure, Glamour and of course Sephora's own magazine titled SEPHORA. You can also see the debuts of Sephora's new products on Facebook at WWW.FACEBOOK.COM/SEPHORA. On their Facebook page you can find most of the information. Sephora also has tabs and links on their page where you can view Offers, Reviews, Discussions and there's a link to access their Twitter page too. With the cosmetic market on the rise Sephora continues to create and release new ideas and products. Stocked with high-end beauty brands, this French chain store also sells a good in-house brand, the stores namesake, which is popular with beauty buffs on a budget. Items to watch out for are the adorable emergency kits that come in little tin boxes, and the aromatic line of Sephora shower gels. The good thing about this shop is that it has everything under one roof; so whether you want perfume, make-up or toiletries, pretty much every brand under the sun is represented[Timeout Dubai, 2009] Detailed and Critical Analysis of Sephora Stores The analysis of Sephora outlets [in terms of customer service] in Dubai Mall, Festival Centre and Mirdiff City Centre has resulted in a list of services exclusive and not exclusive to the products Sephora has to offer. The customer experience at Sephora can be defined as having the following features:

External Store Display and Aesthetics: The Main Display window has a great deal of activity in it. The name of the store in neon blue with the tagline The Beauty Joyride in pink neon has a very catchy effect on the mall crowd. It has been noticed that the RED LIPS have become prominent residents of the display window and communicate a very important message that is Sephoras core business of making people look beautiful and bold. Apart from the shapes and an extravagant use of color, extensive use of snappy expressions like Explore the Beauty Joyride in both English and Arabic languages grab the attention of Sephoras target audience. The store has five entry cum exit points of which three of them are predominantly the main entrance points and the two approaches on the side are used as exit points essentially. Internal Layout and Spacing of the Store: Given the fact that Dubai Mall is the largest mall in the UAE and all stores are expected to be relatively large. On a busy weekend like a Friday, the store can get very cramped up in terms of space and flexibility in movement for the customers. It was noticed that a promotional stand for GUESS perfume was placed on the main entrance of the store. The right wall of the trapezium shaped store sports the womens fragrances and the left side carries the popular banners of fragrances for men. Perfumes are displayed well and the racks that cover the entire wall have been labeled, but the labeling can be improved if the brand names are displayed on the lighted display instead. Coming to the centre of the store where looks are transformed, there was much ado noticed about many things. The display stands for the cosmetics and their accessories were well stocked and presented. Moving further into the store and towards the end, the cash counter was accompanied by a few small stands for last minute necessity products like foundation cotton pads, hair clips, eye pencils, hand mirrors and many smaller items. Towards what looked like the exit points, the medicinal skin care range has been stocked and displayed.

Packaging and Presentation of Products: Consumer culture is as much about the packaging as it is about the product itself. A great example is the Benefits make-up line. Their creative packaging is very attractive and stirs a certain sense of nostalgia. So, what makes a product stand out amongst the so many others just like it on that shelf? Sometimes its the promises (eliminates 10 years off your eyes!), other times its the in-your-face advertising (Heidi Klum is wearing it!) or it could be brand loyalty from using it for so long. And sometimes, its simply the packaging. Customers see themselves in the products they own and the packaging is a major part of creating that image. Full of illustrations of Barbie-like pin-ups searching for romance, Benefits products illicit a temporary glimpse of ones pre-teen self, discovering makeup with novel eyes and experimenting with how it can make them look to get that guys attention. That is one of the draws of makeup for women its about us being girlie-girls on the inside and putting on a play with how we can look (and feel) with it on. [Lorena, Lorenas Epiphany,
Lebanon, 2010]

For some women, putting on make-up is an art and a finely-tuned practice. Benefits packaging with its playful, fairy-tale like approach reminds us that make-up is not just about hiding imperfections, but about having fun with it. The designs remind the customers of grannies old powder box (circa the 50s or 60s) The distinct packaging is very rare to find. Therefore, Sephora has managed to successfully display the wide variety of products with versatility in stimulating style, sense, mood, passion and want in the target demographic. In-Store Staff: The staff was noticed to be incapable of answering simple questions with regards to choice of make-up or any accessory. Product knowledge was almost negligible and personal appearance was not up to standards expected from Sephora. The same has been experienced by a few expat female customers at Sephora and has been reflected in the later parts of this report.

Customer Service GAPS and Blueprinting of Service Enhancement Packages for Sephora: The Service: A pure service cannot be assessed using any of the physical senses. It is a concept which cannot be directly physically examined before it is purchased. Therefore an interaction of the producer and the consumer is necessary for the utility of the service to be realized. For example Sephora customers need to be greeted and attended to by trained members of staff so that the products are well understood and the utility of each of the different products is optimally and continually realized. Services offered by Sephora staff will always be heterogeneous in the sense that they will differ among staff depending on the training received, product knowledge, interpersonal communication skills, physical and mental capacity to coping up with various situations. The sale of the products might experience vulnerability due to variability or inconsistency in service delivery. The perishability of services at Sephora is a common attribute of its delivery through staff which means that the services delivered could depend on the energy of an employee. Towards the end of a busy weekend and many customers and their exponential questions and cries for help, the employee will have a lot less to offer than as compared to the beginning of the week. This also holds true on a daily basis. To experience the service on its own or as a part of a package, the consumers need to be present at all times. But this is not the same for the producer. This is where information processing is very important and the delivery method of the same shoul d be chosen carefully. Customer Service at Sephora: Sephora has a blend of People Processing and Mental Stimulus Processing in the sense that the information about its products is conveyed in both ways where People Processing requires the people involved in the exchange of its products and services to be physically present in order to get them immersed within the service process and to personally experience it. While, the process of Mental Stimulus Processing

requires the people to be mentally involved in the service interaction and experience the intangible cues that the product or service has to offer to complete the service experience. The multicultural and diverse nature of the UAE in terms of customers and potential consumers has enabled Sephora to flourish and expand its base here. As its products are for all skin types, targeting both male and female consumers from all nationalities aged over 16 with a need for beauty and skincare coupled with a want to have customized and special service which will meet their expectation and retain their perception is a huge task and responsibility for Sephora. With consumers increasing demands for high quality products, their expectations of high quality customer service are also increasing. Gaining strategic marketing advantage through physical products alone will not suffice in this competitive market and only companies that offer good quality customer service which meets the expectations of consumers will sustain. From a consumers point of view, customer service is considered very much part of the product.[Talebzadeh, S. MBA(UTS), Brainmates, 2011] The above detailed analysis has enabled this report to be seen as identifying the missing parts of the customer services which will if paid attention to and rectified, enhance the reputation and image of Sephora and facilitate the change in perception of the brand by its customers in the UAE. These missing parts of the service as a whole have been enlisted and discussed as follows on the basis of the GAPS/SERVQUAL Model as a method in measurement of service quality [Berry, Parsu & Zeithmal, 1985] Customer Gap: Gap between customer expectations and customer perceptions Customer expectation is what the customer expects according to available resources and is influenced by cultural background, family lifestyle, personality, demographics, advertising, experience with similar products and information available online.

Customer perception is totally subjective and is based on the customers interaction with the product or service. Perception is derived from the customers satisfaction of the specific product or service and the quality of service delivery. While the research was made, blogs and websites comprised the primary bulk of the knowledge pool for further transition into first hand data collection. Customers were not very satisfied with the customer service at Sephora and how they were treated especially in the UAE outlets as compared to the other outlets worldwide. After first hand data collection, perception of the authors of this report has stood up to their expectation before entering the store in the sense that they went in with a negative review and have come back with nothing changed. Therefore in a customer orientated strategy, delivering a quality service for a specific product should be based on a clear understanding of the target market. Understanding customer needs and knowing customer expectations could be the best way to close this gap.[Talebzadeh, S. MBA (UTH), Brainmates, 2011] The Knowledge Gap: The Gap between Consumer Expectation and Management Perception The knowledge gap is the difference between the customers expectations of the service provided and the companys provision of the service. In this case, managers are not aware or have not correctly interpreted the customers expectation in relation to the companys services or products. It was noticed that Sephora has the right products for their target market and are well stocked keeping the logistics in control. They have very well recognized and have maintained the essence of their core business. If a knowledge gap exists, it may mean companies are trying to meet wrong or non-existing consumer needs. The knowledge gap is non-existent in this case.

The Policy Gap: The Gap between Management Perception and Service Quality Specification According to Kasper et al, this gap reflects managements incorrect translation of the service policy into rules and guidelines for employees. Some companies experience difficulties translating consumer expectation into specific service quality delivery. This can include poor service design, failure to maintain and continually update their provision of good customer service or simply a lack of standardization. This gap may see consumers seek a similar product with better service elsewhere. An apt example would be consumers shifting to M.A.C stores in the absence of good customer service by Sephora. This gap is clearly reflected in the first hand data that was collected by interview with Sephora customers: Yesterday made my THIRD attempt to splurge on some fancy make-up in Sephora and left without buying anything, this time out of pure principle! Every time I am going there with an intention to try a new product or experiment with some make-up, I leave upset, disappointed and empty handed The staff has no clue about their products, never listen to what you are trying to tell them and push one and one only product they were told to. I went this time to buy a compact powder and every single person in the store 'offered' (I had to personally ask every lady for help, no one ever approached me) the liquid foundation. I mean, are you kidding guys? I was trying to explain that I am here to buy a powder, but they were all like zombies, again and again showing me the foundation by only 2 brands, even though I have never mentioned any preferences. The staff looks tired, wearing smudged makeup (attention, in the make-up paradise!!), de-motivated and sometimes even irritated with the fact that you came there to buy something. So, decided I'd much rather spend my money at MAC, where they at least know the difference between liquid foundation and compact powder! They are an international, well-known and professional chain, I wonder why they aren't properly trained? Can't imagine anything like that in States!

Did you ever have a good experience or professional advice from anyone there? Maybe it's only me? [Customer, Expat, 2011]

The Delivery Gap: The Gap between Service Quality Specification and Service Delivery This gap exposes the weakness in employee performance. Organisations with a Delivery Gap may specify the service required to support consumers but have subsequently failed to train their employees, put good processes and guidelines in action. As a result, employees are ill equipped to manage consumers needs. Some of the problems experienced if there is a delivery gap are:

Employees lack of product knowledge and have difficulty managing customer questions and issues Organizations have poor human resource policies Lack of cohesive teams and the inability to deliver

This gap is clearly reflected in the first hand data that was collected by interview with Sephora customers: I had the same problem but did purchase a lot only because i knew exactly what I want ed. I would have purchased more if they were more helpful with some of my questions but found they kept pushing the same product which had nothing to do with my request. They were clueless when it came to perfumes as well. [Customer, Expat, 2011] The Communication Gap: The Gap between Service Delivery and External Communications In some cases, promises made by companies through advertising media and communication raise customer expectations. When over-promising in advertising does not match the actual service delivery, it creates a communication gap. Consumers are disappointed because the promised service does not match the expected service and consequently may seek alternative product sources.

This gap has not been noticed/identified during the research.

Evaluating service quality and customer satisfaction:

Traditionally, customer research agrees that the service quality is to measure of how well the service levels have delivered with customer expectations. The delivering quality service means to conform to customers expectations on a regular basis. The high quality of delivery services is one of the most important and different tasks that any of the service organizations face, because of their singular characteristics, services are really tough to evaluate. A customers perception defined the service quality of how well service meets or exceed their customers expectations. The customers judge most of the cases service quality.

The Importance of Service Quality:

The biggest barrier for the customers in evaluating the service quality is the intangible nature of the service. Most consumers need the knowledge or skills to evaluate the quality of different types of services. The difficulties in evaluating quality, service quality is the only way that the customers can choose one service over another. For this reason, service marketers live or die with understanding how consumers judge the service quality. The customers evaluate the service quality by RATER. R: Reliability: It is the promise to deliver with dependability and accuracy. A: Assurance: the knowledge of products, courtesy and ability to convey the trust, competence and confidence. T: Tangibles: the facilities appearance, Self esteem in your environment, workspace. E: Empathy: Caring and individual attention of the customer needs, treat them as an individual. R: Responsive: willing to help without distractions, respond quick, customer expectations.

Customer Service Blueprinting: In order to fill the gaps identified during the research, this report details a list of suggestions and guidelines on the improvisation of the in-store services of Sephora to enhance the customer service experience for their customers.

The employees will need to be trained in order to keep pace with the dynamic sphere of customer retention and adapt to the following: Changes in customer needs, Growth or restriction in business Launch of new products and services. Performance improvements for specific tasks.

Training Program at Sephora: A customer service training program for employees has been planned for the existing as well as new employees at Sephora for the following outlets and is detailed as follows: 1. Festival Centre 2. Mirdiff City Centre. 3. Dubai Mall. The Facilities Requirements: The following facilities will be provided as part of the package and will be inclusive of the total fee: Beverages Transportation

Who are required to be trained? 1. Store Managers. 2. Employees. 3. Managers. Training Program Session: The training program session will be conducted at Sephora Training Institute, UAE. The training session will cost as follows:

December 2011 Weekly session: 10,000AED per week. [Transportation: 500AED per month] [Beverages: 20AED per person]

Weekly Session: Monday and Wednesday. Sunday Monday Effective communication skills. Designation and Positioning. Presenting skills/appearance. Technology skills training Tuesday Wednesday Effective support materials. Responsiveness Thursday Friday Saturday

The objectives of the training package for Sephora employees are as follows: Effective communication skills: To build confidence in the employees and boost personality traits that will improve communication skills so that there are no barriers in terms of communicating required information to customers, offering a smooth customer service experience. All staff members are required to have fluency in Arabic AND English to be able to cater to the bulk of the UAE consumer market.

Greeting, general courtesy and behavior of the staff should be taken care of and be polished in a way that customers are always greeted with a smile and treated well throughout their shopping experience until they leave the store and its premises. Responsiveness: Responsiveness to consumer complaints and suggestions should be top priority for the staff and management of Sephora as this is the backbone of the customer service experience. If the customers have raised a suggestion or voiced a complaint regarding a particular instance or their experience at the store, they should be attended to as soon as possible and in certain stipulated time frame. Appearance and Personal Presentation: As a cosmetics retailer and a brand that is associated with beauty and appearance, employees and staff appearance is the key to attracting consumers and projecting an image that will meet the expectations of the consumers associated with the brand. It was noticed in the stores that the employees looked very tired and washed out from their days work and on a busy weekend, they looked like they were just out of bed. Well-groomed staff is essential to retain the perception of the brand stable. After all, when the employees look good, they make the consumers want to look good too. Designation and Positioning: Designation and positioning of the staff in the store was seen to be erratic and not well designed. Therefore a team should be ideally formed so that a certain team of employees represents a particular set of products and customers with any queries regarding those products should approach this team for expert advice. Product and Competitor Knowledge/Effective Support Materials: Professionalism is displayed with good knowledge as well. Therefore, employees should possess extensive knowledge about the products they are selling and should be able to answer any questions posed to them. They should be up to date with the upcoming products and promotions and the use and effects of misuse of the products assigned to them. Technology skills training: Employees will be taught to use the cash register, magnetic cards, security and cameras.

December 2011 Monthly session: 3500AED per class. [Transportation: 50AED per person] [Beverages: 20AED per person] Monthly Session: Saturday. (Once in 2 weeks). Sunday Monday Tuesday Wednesday Thursday Friday Saturday Stress management skills.

Managing expectations.(telephone course training) On job training: Stress management skills: The course provides candidates with the ability to take charge of life and work pressures to improve wellness. Managing expectations: they will be taught how to manage the products/goods to be delivered on time. Evaluation: The qualities of a product will be better explained in training programs. It will give a chance to the employees to better understand it so that it can be marketed and sold efficiently. Employees also learn how to deal with and handle various customer needs. The

training program will definitely help the employees with their ability to work and service customers positively. Conclusion: Effective service management is a complex undertaking which includes many different strategies, skills and tasks. Managers plan for creating the best services and operational excellence to maximize customer satisfaction, loyalty and retention. Recognizing and closing gaps offers high quality customer service to the consumer and helps them to achieve their goal whilst maximizing market position, market share and financial results through customer satisfaction. It also helps managers to identify areas of weakness and make improvements to a companys service delivery.