- Sephora has a massive following.
- Members of the store's rewards program have spent upwards of $35,000 to redeem exclusive members-only trips.
- The store offers unique technology, Color IQ, to identify specific foundation shades to match customers to products.
- Visit Business Insider's homepage for more stories.
Following is a transcript of the video.
Narrator: Have you ever left Sephora with way more products than you intended to buy when you first stepped in the door? You're probably not the only one. Sephora was named retailer of the year at the 2018 World Retail Congress. And it seems that people can't get enough. Here are some sneaky ways you might not have noticed that Sephora gets you to spend more.
As soon as you walk into one of their locations, you'll notice what makes Sephora different from the traditional department stores it competes with. Sephora has nearly all of their products on display, so customers can try just about everything. It's great for the customers because they can test stuff out, but it's equally great for the company because you're in the store for longer, which means you're more likely to buy more.
A 2015 study found that the likelihood of purchasing a product increases with time spent holding and looking at it in the store. The more time you spend trying out a product, the more it feels like it's already in your possession and you need to purchase it.
Sephora also has kiosks stocked with makeup remover, tissues, and other necessities so customers can clean up, and, more importantly, so that they can try more products throughout the store. And if you're not sure what to get, Sephora has even developed special technology to match customers with their perfect foundation shades. The device, called Color IQ, scans your skin to assign you a four-number code, which gives you a curated list of all the foundation shades from different brands that will best match your specific skin tone.
And if you're not taking advantage of the samples, the shelves are also set up with an eye on your wallet. The most expensive products are placed on top shelves because they're the easiest to reach, while cheaper items are on the bottom shelves. And, of course, the checkout line is surrounded with travel-size goodies to tempt you at the last minute.
Amanda Krause: So, when you're up against the register lines and, you know, you're kind of looking at all those mini products, you'll find things that are maybe, you know, $5, $10, depending on what it is. And that can be enticing for a lot of reasons. Maybe there's a primer you really wanna try but you don't wanna spend $25 on the full size, so you can just get a smaller one for 10 bucks.
Narrator: But while the smaller products and their smaller price tags may seem like a good deal, they're often not. Take, for example, the GlamGlow SuperMud mask. The full size costs a whopping $59. In comparison, the mini half-ounce jars for $25 seems like a steal. But in reality, the mini costs $50 per ounce, while the full-size jar comes out to about $35 per ounce. So if you're looking to save money, the larger product is actually more cost-effective.
Another way Sephora gets customers to spend more is simply by being their go-to beauty store. They accomplish this by carrying a diverse array of brands, including ones that can't be found anywhere else. The company often collaborates with brands to release limited-edition items, which not only draws customers in, but pressures them to purchase the products.
Krause: Sephora might have that one exclusive item that you can't get anywhere else. So it really kind of draws people in because you never really know what you're going to find there.
Narrator: Exclusive brands and items make it easy to keep coming back. More than anything, Sephora's all about building brand loyalty. Case in point: their robust rewards program. According to the Harvard Business Review, reward programs not only encourage customer loyalty, but can also get new customers to shop like older, more profitable customers. And the longer a person has been a customer, the more profitable they become to the store and the less they cost to serve.
Sephora's Beauty Insider program has three tiers, and anyone can sign up for the basic level. Members earn a point for every dollar they spend, as well as perks like a birthday gift and beauty classes. The highest, most coveted tier is Rouge, and you have to spend $1,000 in a calendar year to qualify. The exclusive benefits include significant discounts on all merchandise during Sephora's sales and free two-day shipping year round.
Nico Reyes: So, I've actually been a Sephora shopper since about 2014. And only just recently, this past year, did I become a VIB Rouge.
Narrator: Sephora's exclusive rewards for Rouge members include sponsored trips with cosmetics brands to New York City or Los Angeles, and some members have even spent more than $35,000 to rack up enough points to redeem on such trips. But is it worth the $1,000 to reach Rouge status?
Reyes: VIB Rouge has benefits that VIB doesn't have, like early access to products, like invitations to, like, Sephora events, facials, whatever. If that's something you're interested in, then work towards it, sure. But if not, VIB is literally so similar. They're so similar in terms of their benefits; I don't think it's worth it to actively try to spend $1,000 a year to reach that status.
Narrator: After all, both VIB and Rouge members have access to Sephora's sales. Sephora definitely makes it easy to spend more, but finding good deals isn't impossible.
Krause: Sephora constantly puts things on clearance, just maybe not at the forefront of the store. Keep an eye on the website, keep an eye on their social-media pages, like their Instagram, their Twitter, see what promotions are going on, and really just kind of focus on some of the sales and promotions that they do, because a lot of the times you can get equally good products for a little bit less money.
EDITOR'S NOTE: This video was originally published in August 2019.
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