Case Analysis of Sephora Direct
Case Analysis of Sephora Direct
MAR 6815
December 4, 2013
Problem Statement
The main issue with Sephora Direct is that Julie Bornstein, Senior Vice President of Sephora Direct, wants to double the budget for social media, video, and mobile in 2011. For the funding to be doubled, Bornstein must first convince David Suliteanu, President and CEO of Sephora USA. To convince Suliteanu, Bornstein’s team must identify what the company could gain from “winning” in the social media, video and mobile space. Also, figuring out what a “win” will mean for the company and how to measure the success of these digital efforts is important for Sephora.
Situation Analysis
The Sephora Direct Group is responsible for all of Sephora’s direct marketing and digital initiatives, including Sephora.com and the Sephora Beauty Insider loyalty program. Sephora’s current budget is estimated to be about $20 million. Of this, about $7 million is spent on online advertising, with the bulk taken up by online-search advertising. Only about $1 million is devoted to social media, mobile and video -- representing slightly less than 5% of the total marketing budget. Bornstein would like the social media, video, and mobile budget for 2011 to increase by $1 million to a total of $2 million.
Sephora spent millions on online-search advertising by buying thousands of keywords for brands, products, and beauty-related terms. Search advertising represented the single largest component of Sephora’s marketing budget and was the largest source of new traffic to the Sephora website. Email marketing to Beauty Insiders was also a key element of the marketing mix, and Sephora spent millions on the entire Beauty Insider program.
Social Media is an important element for Sephora to invest in because it is becoming an increasingly popular way to shop and gain clients; especially its younger clients. According to Comscore, mobile shopping rose from $396 million in 2008 to $1.2 billion in
MAR 6815
December 4, 2013
Problem Statement
The main issue with Sephora Direct is that Julie Bornstein, Senior Vice President of Sephora Direct, wants to double the budget for social media, video, and mobile in 2011. For the funding to be doubled, Bornstein must first convince David Suliteanu, President and CEO of Sephora USA. To convince Suliteanu, Bornstein’s team must identify what the company could gain from “winning” in the social media, video and mobile space. Also, figuring out what a “win” will mean for the company and how to measure the success of these digital efforts is important for Sephora.
Situation Analysis
The Sephora Direct Group is responsible for all of Sephora’s direct marketing and digital initiatives, including Sephora.com and the Sephora Beauty Insider loyalty program. Sephora’s current budget is estimated to be about $20 million. Of this, about $7 million is spent on online advertising, with the bulk taken up by online-search advertising. Only about $1 million is devoted to social media, mobile and video -- representing slightly less than 5% of the total marketing budget. Bornstein would like the social media, video, and mobile budget for 2011 to increase by $1 million to a total of $2 million.
Sephora spent millions on online-search advertising by buying thousands of keywords for brands, products, and beauty-related terms. Search advertising represented the single largest component of Sephora’s marketing budget and was the largest source of new traffic to the Sephora website. Email marketing to Beauty Insiders was also a key element of the marketing mix, and Sephora spent millions on the entire Beauty Insider program.
Social Media is an important element for Sephora to invest in because it is becoming an increasingly popular way to shop and gain clients; especially its younger clients. According to Comscore, mobile shopping rose from $396 million in 2008 to $1.2 billion in