5 Reasons Why Personalized Marketing Is Important For Your Business [Sephora Case Study]

There are countless businesses that provide goods and services for all of us. Within all existing brands, we always have our favorite brands that we go to without a doubt. There are many factors that drive us to be loyal to a certain brand: price, quality, customer service, to name a few. Besides those factors, I also pick a favorite brand based on its relevance.

But what do I mean by saying relevance?

Every day, we are bombarded with hundreds of emails from businesses trying to convert us into their customers. Would a 21 year-old college girl be interested in high-end RV advertisements ? Maybe. But the percentage is fairly low. On the other hand, there is a higher chance of her clicking on the ad if it’s about a special 15% off sale on beauty and fragrances.

A simple explanation for her decision is because she finds that ad more relevant to her, unlike the high-end RV ad.

Relevancy is one of the main keys to attract and gain customers’ loyalty. Together with rapid growth in technology and e-commerce, we, the customers, have become more savvy. We want brands to know us, to understand our needs and preferences, and to communicate with us in a more personal way. There is just one marketing strategy that allows companies to deliver that, and it is called Personalized Marketing.

In short, personalized marketing, or “one-on-one marketing”, is an implementation of using data collection, analysis, and automation technology to help deliver ads to customers in a more relevant way. In this blog post, I would like to tell you a little bit about one of my favorite brands, Sephora. I will let you know how this brand won my heart and gained my loyalty by implementing personalized marketing as one of their main marketing tactics.

According to Sephora’s official website, Sephora is a prestige omni-retail, owned by LVMH, the world’s leading luxury good’s group. Since 1998, Sephora has been an industry-leading champion of diversity, inclusivity, and empowerment in the US. Sephora has won the hearts of millions of beauty shoppers, and the leaders are planning to expand their horizons to the Asia and Australia market. As stated in LVMH Record Results Report in 2019 Sephora, which is categorized in their selective retailing business group, achieved organic revenue growth of 6% in the first nine months of 2019. Sephora recorded steady growth in revenue and gained market share in all key markets. Online sales continued to grow at a rapid pace. The expansion of its distribution network continued with the opening of its first stores in Hong Kong and Auckland.

There are a few key elements taken from Sephora’s success, but I will be only discussing Sephora’s implementation of personalized marketing, using my own experience that I have gained with this brand since 2010.

Sensing the growth of technology and how it influences customers’ shopping habits, in 2010 Sephora rolled out its mobile platform with a very personalized touch,which served the purpose of giving the customers the same shopping experience, whether online or in-store. With that clear goal in mind, Sephora used its new platform to collect data, which later was used to map out customers’ persona.

After sharing my personal information and my preference to Sephora voluntarily, what do I receive in return?

Product recommendations.

Firstly, Sephora creates a list of recommendations for me by a virtual beauty advisor, based on my previous purchases, my cosmetic preference, my skintone, and more. I love this feature because of its convenience and accuracy. It saves me time browsing through thousands of products. Moreover, it definitely encourages me to try new products.

Location-based content.

Secondly, using beacon technology, Sephora app recognizes when I am in store, so that it can provide me information about daily promotions, in-store events, or even remind me that my in cart products are in-stock in-store or not. This feature creates a more personalized and engaging shopping experience for me.

Emails with personal touch.

Email is one of the easiest ways to get started with personalization. Instead of using generic format, Sephora includes my name in their emails sent to me, and always ends the emails with “We belong to something beautiful”. With such an easy yet personalized approach, I feel like I belong in the beauty community and in the Sephora community.

Loyalty Program.

Sephora’s Beauty Insider Program is well-known among rewards marketing programs across retail and e-commerce. In order to attract budget shoppers, other competitors like Ulta normally have a reward program where points can be redeemed for discount toward purchases. Sephora, on the other hand, isn’t as focused on helping customers save money. Being a Sephora beauty insider is more about being a part of an elite beauty community, with access to exclusive launches and deals. Knowing the mindset of the elite beauty community, Sephora created 3 tiers with different benefits for all customers, which later became a successful strategy for the Beauty Insider Program.

Triggered emails.

Sephora implements this tactic cleverly. They record my shopping cart and my browsing history on their website. Then they send me not spams, but relevant emails to remind me of my interested products. They even extend their savings discount for me, so I have more time to think if I want to purchase or not. This is dangerous for my pocket, but it totally works out for them. Trigger emails also help them promote sales by targeting Holiday sales, Weekly sales, or Special occasion sales.

Based on my examples above, there are 5 main outcomes from Sephora’s successful implementation of personalized marketing :

• Target specific customers in the most effective way.
• Increase conversion rates and sales.
• Build brand loyalty.
• Create an image for their business.
• Provide valuable insights for businesses on trends and tactics.

Final thoughts.

Personalized marketing is not a new trend in the marketing world, but it is proven to boost growth to both small and big companies. In order to stand out from other competitors, you need to be able to fulfill customers’ needs and demands, as well as putting your unique touch in your marketing strategy. While brands should be careful to not scare off customers with “hyper-personalization” and staying legally compliant, by successfully implementing personalization marketing, companies are able to attract more loyal customers and get better recognition to their business.

What are your thoughts on personalisation? Have you purchased anything recently through remarketing ads or location based marketing efforts? tell us in the comments below!