US Insights

Sephora: A Look Behind the Forecast

Tiffany Hogan

Senior Analyst

Retail 05.15.2019 / 12:00

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Here's where we think the beauty giant is heading.

During Kantar’s latest round of forecast updates, we took a deeper look at our numbers for Sephora. Though it is less-revealing than most publicly traded retailers about its results, we’ve pieced together the story to bring our data in line with Sephora’s current and historical performance, as well as what we think the future holds.

Here are the assumptions that went into this year’s revised Sephora forecast:

Sephora is a leader in online beauty retailing.

With years of investments in technology and digital initiatives behind them, Sephora is already a premier online beauty destination. Developments such as Sephora Reorder help make online repeat purchases easier, while tools such as its Virtual Artist make it easier for shoppers to make informed purchase decisions away from stores. We expect that online sales are already a billion-dollar business for Sephora, accounting for around 25% of total sales. We expect this to approach 40% by 2024.

Store growth will fuel omnichannel sales.

Sephora’s latest plans will add 35 new stores to its US fleet. It has previously announced that it will emphasize its smaller, service-oriented Studio format in the region, and we’re looking for this format to populate many of these new locations. We expect these stores to fuel sales across the omnichannel spectrum: smaller stores may generate fewer sales per square foot or sales per store but will boost brand awareness locally, helping to fuel online sales.

A focus on brand engagement will drive future sales with top shoppers.

Sephora has made it clear that its focused on engaging more personally with shoppers. New upgrades to its Beauty Insider loyalty program offer free personalized services for top spenders, while new partnerships with companies like Orange Twist will fuel new revenues from services. Both strategies keep shoppers coming back to stores for an immersive brand experience.We expect total US Sephora sales to continue to grow by an average of 5% per year through 2024.

For more detail on Sephora’s US strategy and initiatives and a look at the updated forecast, checkout our Sephora Insights Center, complete with a freshly-updated executive summary and the five slides you need.

Source: Kantar

Editor's Notes

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