by Queenie Yao & Davy Huang
[This is an authorized translation with original Chinese copy released by Tencent’s 2021 Smart Retail Growth Guideline whitepaper]
By 2020, Sephora already owned over millions of connected customers in WeChat Work, a platform also widely knowned as WeCom. With a refined operation of countless customer chat groups, Sephora is successfully developing a user journey from "WeChat Work group chat, to WeChat mini-program livestream, and to mini-program store transaction". The move has effectively boosted the mini-program GMV growth.
During this year's 618, Sephora set a new record of over 100 million GMV for its mini-program store sales, and increase by over 60% YoY, bringing new inspiration of mini-program operation and omni-channel retailing to the beauty industry.
About Sephora China
Since its debut in France over 50 years ago, Sephora has been the world's leading premium beauty omnichannel retailer. As a subsidiary of the world's leading luxury group LVMH, Sephora inherited the pursuit of excellence, innovation, and entrepreneurial spirit, and deliver the belief in the power of beauty to 35 countries, providing an omnichannel environment for customers to experience and learn about beauty. To date, Sephora is present in 86 cities in Greater China, offering a full range of beauty services in over 300 offline premium shops. In September 2018, Sephora officially launched WeChat Mini-program shop.
Demands and pain points
In the mobile commerce era, beauty consumers are active on every sales channel during the decision-making process. There is also an increasing demand for authentic consumer content. Premium beauty retailers and brands need to understand consumer demands, communicate seamlessly with users, and offer a pleasant experience in both online and offline sales channels.
To refine the omnichannel strategy, Sephora is using WeChat's omni-touchpoints and a suite of private domain tools including WeChat Work, mini-program live streaming, and WeChat Work groups, to complete the journey between the brand’s private domain and brick-and-mortar stores. It overall supported the retailer to achieve more efficient connection with customers, while driving the conversion of product sales both online and offline.
Touchpoints and tools
• Private domain touchpoints: WeChat official account, WeChat channel, official mini-program, offline beauty advisors, WeCom groups, BA's WeChat Moments.
• Public domain touchpoints: WeChat Moments ads, WeChat official account ads, offline shops, digital beauty equipment
• Operation tools: WeCom
Develop WeChat Ecosystem with "Omni-Channel Approach", and Focus on Mini-Program & Private Domain
In 2006, merely 2 years after entering the China market, Sephora set up its official web shop to provide consumers with a shopping channel. Inspired by the omnichannel mindset, Sephora was also the first beauty retailers that stepped into the WeChat ecosystem and leveraged the official mini-program store to connect online and offline sales channels, accumulate and operate on private domain customers.
In offline shops, Sephora attract consumers into their private domain via beauty advisors and AR/VR powered digital initiatives to experience extended online services. When online, Sephora actively use the touchpoints within the WeChat ecosystem, such as operating an official account with millions of followers, targeted WeChat moment ads, WeChat Channels account, live streaming, and WeCom groups to direct traffic to the mini-program. By the end of 2020, the GMV growth rate of the WeChat mini-program has surpassed 150%.
Sephora’s Four Forces enabling a flexible & interlinked public-private domains CRM operation model
As an experienced retailer, Sephora has a well established sales channel operation & CRM system to bridge between private domain traffic with offline brick-and-mortar stores. With the development of the WeChat Private Domain "Four Forces", Sephora is continuing to explore digital transformation solutions and leverage digital products to remove boundaries between sales channels. As such, Sephora provides consumers with an omni-channel shopping experience.
1. Organisational force: Strengthen cross-departmental cooperation and improve efficiency with "centralized" omnichannel solutions
In September 2018, Sephora launched its WeChat mini-program store in just 90 days, bringing rich social gameplay and a seamless retail experience to Chinese consumers.
The success of the rapid launch of the mini-program not only relied on the recognition and support of the senior leadership team, but also the relationship with Tencent Smart Retail team, who helped Sephora to better carve out the digital transformation journey under the WeChat ecosystem. This initiative supported the group’s innovative strategy to transform online business into omnichannel retailing plus private domain operation.
To optimize the 'organizational force,' Sephora has deployed and implemented an 'omnichannel mindset' and strengthened cross-departmental collaboration with an 'E-Commerce & Digital' team within the organization.
The "E-Commerce & Digital" team is responsible for the operation of the e-commerce channel while providing a "centralized" omnichannel solution for omnichannel development and other operational departments, working together to enhance the omnichannel consumer experience.
<Sephora’s “E-commerce & Digital” team structure>
2. Operation force: Deeply cultivating the WeChat ecosystem, continuing to lead the innovation of beauty retail private domain operation
As a leader in high-end beauty retail, Sephora has always been consumer-centric and explores innovative approaches. For instance, Sephora used private domain operations in the WeChat ecosystem to provide users with a quality service experience.
• WeChat mini-program social fission marketing realizes efficient user recruitment
Sephora has taken the lead in the industry to explore social fission marketing with help from WeChat mini program technology. It took the exclusive launch of major brands as an attraction, to invite potential users to WeChat mini-program from various brand-consumer touchpoints, including WeChat official account, advertisements, and social sharing.
At the same time, social fission is stimulated by inviting friends to get rewards, which can effectively promote the purchase while pulling in new users.
According to Tencent Smart Retail analysis, the proportion of new consumers who participate in the activities and purchases exceeds 50%. The conversion cost of new users is 30% lower than that of traditional channels, so the effect of pulling in new users is remarkable.
By the end of 2019, more than 25% of the new users of the mini-program store came from social fission activities.
<How Sephora drives traffic to its WeChat mini-program>
• WeChat mini-program live streaming help brands spoil their fans in a fancy way
Back in August 2019, Sephora began live streaming on the WeChat mini-program. By the end of 2020, the newly upgraded Sephora mini-program had successfully hosted more than 80 livestream campaigns, attracting a cumulative total of more than 3.5 million viewers.
Sephora has been exploring and precipitating a wealth of experience in live streaming events.
On 23rd April this year, Sephora took its first-of-kind show online and launched the new season's beauty trends in a livestream event. Sephora's beauty gurus explained the 6 trends in-depth and independently created and crafted 12 individual makeup looks in the live streaming. The live broadcast was also thoroughly planned in line-up and session settings, including inviting top beauty KOLs and directors of beauty from fashion magazines to interact with the audience.
< Source: Sephora WeChat Mini-program livestreaming>
The brand's top executives even made personal appearances to shorten the distance with fans, in addition to launching a no-threshold lottery, Koi prizes, and other exclusive benefits. Backed with flexible operations, live stream events effectively inject enthusiasm that attracts user participation and conversion efficiency.
• SmartBA digitally empowers offline BAs
In June 2020, Sephora launched the SmartBA project to systematically promote top-down BAs to guide consumers into the private domain through Sephora's WeChat Work. Digital ecosystem empowering each "beauty advisor" to continuously provide professional consumers with one-to-one personalized advisory and shopping service in the WeCom groups with their professional knowledge and aesthetic vision.
Through the SmartBA project, beauty advisors can continuously communicate with consumers on WeChat and provide them with personalized services, such as reminding consumers who "placed an order yesterday but did not pay" to complete their orders and reduce churn.
The system also provides real-time transaction data billboards, which can calculate online related sales into actual performance, effectively motivating "Beauty Advisors" to achieve their performance targets.
Sephora can match them with a beauty advisor in the nearest shop based on the consumer's positioning on the mini-program to provide exclusive 1v1 consultation for online users who have not yet visited a shop. Users can also book in-store appointments for various services on the mini-program, such as makeup customization, brow customization, etc. This helps BAs to target enthusiastic fans of different beauty products and recommend new brand products for them.
In 2020, Sephora's WeChat Work consumer base exceeded millions, a year in which the French beauty house mini-program GMV grew by over 150%.
Digital beauty equipment accelerates private domain precipitation and conversion
Sephora has introduced digital beauty devices such as Fragrance Studio, Foundation Finder, and Virtual Artist to "find" more potential consumers in its brick-and-mortar stores. Consumers can scan the WeChat QR code to enter the private domain and add BA's WeCom as a contact to receive efficient, professional, and intensive communication and service. As such, it has accelerated the precipitation and optimization of Sephora's private domain traffic.
3. Merchandise Force: Big branded products + exclusive sales to cultivate users' minds and promote sales conversion
Private domains bring users closer to the brand, and the power of the product determines whether the brand can turn "traffic" into "retention." Sephora's WeChat mini-program developed a "New Products Trial" portal and has joined forces with Guerlain, Givenchy, and many other big names to launch exclusive first-run campaigns, which can effectively stimulate social fission and increase sales conversion with activities such as friend sharing.
Sephora also joins hands with beauty KOLs from time to time to put on high-end sale beauty big brand tips live streams on the mini-program. In 2020, during Estée Lauder's Double 11 carnival, 230,000 people flocked to Sephora for Estée Lauder's livestream event, which attracted beauty enthusiasts' engagement, including more than 60,000 comments and likes alone.
<Spehora x Estée Lauder Livestream event>
Last November, Sephora launched the "Latest Local Domestic Products SHOW" channel in the "Beauty Livestreaming Live," featuring six high-value Chinese national style indie brands, such as Marie Dalgar and Wei Beauty Inoherb, and Maogepinglight. The show attracted 45,000 viewers.
4. Product Force: Build the shortest chain, break the channel limitations and collaborate to enhance the omnichannel consumer experience
Nowadays, consumers will jump and interact with each channel in consumer decision-making, and brands need to provide an omnichannel experience to increase user stickiness.
After continuous exploration, Sephora has integrated a series of features, including an online store, membership centers, in-store service appointments, etc. With the support of accurate advertising through official account ads and WeChat Moments LBS ads (geographic positioning, crowd targeting), Sephora builds a solid path of:
→ Direct external traffic to follow Sephora's WeChat official account
→ Visit mini-program store
→ Guide to add beauty consultant WeCom account as contact
→ Join WeCom group chat.
The ultimate purpose of this path is to drive traffic of the public domain to feed the private domain.
To tackle membership management from multiple channels, Sephora developed an omnichannel membership system to combines online and offline sales data – so customers can earn points from both online and offline orders; they will always get the points.
As such, users can quickly complete identification according to their phone numbers and automatically redeem the corresponding level of membership rights in the mini-program.
In addition, as a live streaming feature embedded in the mini-program, the entire consumer journey from livestream warm-up to a subscribe to livestream reminder. Then the order purchase is realized on Sephora's private domain. WeChat's ecosystem and features help the brand deliver value to users more precisely, enchant fans, and shorten the journey from engagement to conversion. Meanwhile, the whole process is smooth without external jumping, making it easier for users to receive an immersive experience.
Since entering China in 2005, Sephora, a high-end beauty collection store, has been adjusting its strategy to deepen its connection with online shoppers.
Sephora continues to step up its efforts in omnichannel operations, and the WeChat e-commerce-friendly ecosystem centered on the mini-program has gradually become another core business position for Sephora.
During this year's 618, Sephora set a new record of over 100 million GMV for its mini-program store, with an increase of over 60% YoY. Overall, Sephora has brought new inspiration and approaches for the beauty industry and mid-to-high-end brands.
Through the optimized operation of the WeChat ecosystem's entire touchpoints and the innovative mini-program gameplay linking online and offline, Sephora has brought new inspiration and thought to the beauty industry and mid-to-high-end beauty brands to open up the second growth curve of online retail.