Sephora Loyalty Programs: A Comparison between France and the United States

Sephora is a beauty products retail chain founded in France by Dominique Mandonnaud in 1970 and owned today by Louis Vuitton Moet Hennessy (LVMH), the world’s leading luxury goods group. Sephora’s self-service environment carries classic and emerging brands as well as Sephora’s own private label across a broad range of product categories, including skin care, color, fragrance, body, and hair care. Sephora has a strong presence in several countries around the world. It operates approximately 1,300 stores in 27 countries worldwide, with more than 300 stores in North America. It opened its first U.S. store in New York in 1998. Since 2006, Sephora stores are also found inside some JCPenney stores. These stores, smaller than normal with approximately 1,500 square feet, feature the signature Sephora look and an edited assortment. The company launched its Internet retail store in the United States in 1999 and Canada in 2003, which is Sephora’s largest North American store in terms of sales and selection of products and brands.

1. Identify the benefits for a company to implement a loyalty program.

2. What are the design characteristics of an effective loyalty program?

3. What are the benefits of having a tiered loyalty program such as Sephora’s?