85% sales to happen offline for Sephora: Vivek Bali

While eCommerce has made its presence felt in almost every retail segment, beauty business especially with makeup and fragrances behaves differently as look and feel is of utmost importance in here, says Vivek Bali, Business Director and Chief Executive with Sephora during an interaction with Retailer. An industry veteran with over 25 years of Experience, Bali strongly believes that 85 to 90 per cent sales in beauty industry will happen offline, at stores.

How has the market evolved from the times when Sephora initially launched in India?

I have been in Indian beauty market for close to 25 years now. The scenario was very simple – one has to go to the store to experience and buy the products, but the kind of education that happened to the customers in terms of usage of product, its benefits etc. was not getting communicated properly. The lack of enough knowledge made Indian women go to beauty parlours leading to boom in business of parlours.

The Indian market is going through a transition. If you look, in last 10 years, more women have entered into workforce, their buying power has gone up and they are looking glamourous. They are moving up the ladder in corporate sector and simultaneously graduate in terms of product usage from Elle 18 to Lakmé and so on. India as a market starts from value products, then mass products and finally premium products.

One of the brands I personally like in India is Lakmé because that’s the brand that understood the Indian women very well in terms of likes, complexion etc. it is not that there is a dearth of knowledge but people aspire to move to premium brands, which is happening at the moment.

What's your target audience and how are you planning to get them to the stores?

Sephora is a young brand and therefore our core target group is 18 to 40 years. We run very strong launch campaigns of the store which starts with digital media. We localise the campaign and we also do hunt for Sephora girl for the city where we are launching our new store. Further, we indulge in mall branding where we are set to launch.

Talking about Sephora, it is a place where beauty breeds the preferred image so that the people remember it. We have a Sephora dance troop and we also use social media to announce offers and promotions around 10 days before the store opening. With the strength of the brand, we are very careful that we open stores on main floor of the mall to ensure accessibility. Also we indulge in lot of PR activities, print advertisements, product launches.

Now when eCommerce is the trend these days, why is Sephora delaying in creating online presence?

It is extremely important for us to understand that beauty business especially make-up and fragrances is about trying the product, matching it to your complexion and then buying it, which is not possible online.

It is possible online if you know a particular shade and then you want. But in case of new launches, one needs to try them before buying. No matter what we do online, one would never get the same feel as that in stores. So for us, online is mainly a medium of spreading information where we will represent what is there in the store for customers to see, select and know the availability of a particular product.  

When we will launch online platform, we will provide consumers with an option to buy, reserve a product in nearby store on choose home delivery as well. But I strongly feel that in beauty industry 85-90 per cent sales will happen at offline stores.

How many stores are you planning to open in this fiscal year?

If I look at India, Sephora will target the top 15 cities – metro cities are the bigger ones followed by places like Hyderabad, Pune, Chandigarh, peripheries of Delhi like Noida, Chandigarh followed by cities like Ahmedabad, Surat. We would mark our presence in these cities over next 5 years, and by then other cities will be ready to receive us.

We are looking at 50 stores in first 5 years, and in this year we will be opening 7 stores this year. Mall of India, Noida is the next one followed by Chennai, Mumbai, Kolkata, Chandigarh and Hyderabad.

Stores these days are an extension in the sense they provide experience to the consumers. How do you think is the continuation of stores in Sephora?

Stores are the most important part of our business and we have a 360 degree campaign to develop the brand, which begins with giving the customers a great shopping experience on all beauty categories and related activities.

The second part of strategy is that our beauty advisors are fully trained in terms of shade match, promotion of looks. They are trained on a daily basis. Third part is in terms of product and brand selection. We have a very powerful and exclusive portfolio of brands which nobody else carries. Others have brands available in multiple stores. Currently we have almost 23 exclusive brands in our stores.

What's your growth funda from here on?

Indian market is growing at around 18 per cent compounded annually for the last 5 years and we are growing faster than that. We will continue to grow at that pace by launching new brands, products and services followed by geographical expansion.
Any views regarding the growing global beauty fashion industry in India via franchising.

With the overwhelming response Sephora is getting in all cities, I think that in our segment, we should be leading the growth of beauty industry in this segment which is premium and above.