icant growth over the last two years. We doubled the business in 2016 and we’ll double again this year, just in terms of the store network as well as topline growth. So far, we have a really significant business in Australia versus global. We currently have three stores that sit in the global top 50 in our network and that’s out of more than 2,500 global stores. We currently have a plan for 15 stores as a baseline commitment. We’re being opportunistic with new locations at the same time. They must be significant, large locations in the best mall or high street locations in the country.” IRW: What has Sephora done lately in terms of the digital side of the business? LA: “To date, we have put a big investment in online. We truly see ourselves as an omnichannel retailer. We don’t try and break down online versus in-store because our customers shop regularly across both. That’s part of the investment we’ve put in locally. We have a local warehouse so we can deliver our goods to the Australian consumer as quickly as they demand it. We also just made a huge investment into an app, which was only launched a few weeks ago. It’s currently trending as the third most popular app on iTunes, which was just behind Facebook and Instagram. We’ve just seen a huge, huge spike in downloads for that. It’s a transactional app that allows you to purchase online. It’s really easy to navigate, we’ve got an excellent feed showcasing new products and great titbits of advice.” IRW: How would you describe the Australian Sephora customer? LA: “We have a number of customers that have been with us for a long time, they’ve experienced Sephora in the US or in Europe and they’re already part of our loyalty program so from day one, we welcomed a whole series of existing customers who are well-accustomed to shopping with us globally. In general, our customers are extremely discerning, trend-driven and well-educated. They’re on top of all the trends, so they’re doing YouTube tutorials and following influencers – they know what product to look for. When they come into Sephora, for the most part, they know what they’re looking for, but they’re looking for us to provide them with the best upcoming brands and education on trends that they don’t receive from online. So they look to us for expertise for beauty. They really see us as the beauty authority and somewhere they can access beauty in a way that’s unbiased.” IRW: How would you describe the way that Sephora has been merchandised? LA: “It’s not your traditional department store environment. Part of the true integrity of Sephora is the idea that all our brands should be treated as equal in terms of merchandising. So there are no large oversized counters – we have our beautifully standardised Sephora fixtures for the brands to fit within. You’ll have a brand like Givenchy or Estee Lauder that’s merchandised alongside a new brand like Huda Beauty. It’s an egalitarian approach that allows customers to shop in the way they want to shop. These days, they don’t want to commit to one brand, they want to shop with ease across multiple brands. They’ll grab mascara from Marc Jacobs, a foundation from Kat von D, then go to Dior for a fragrance. It’s much more aligned with the demands and needs of a modern consumer.” IRW: Sephora in the US has been experimenting with in-store technology lately. Do you see that happening in Australia in the future? LA: “Yes, definitely. On the app, we’ll have accessibility for our store teams to access the devices so they can secure product if it’s sold out or waitlisted for our customers in-store. It’s about integrating elements of the app with the in-store experience. We have some cool technology through our site through virtual make-up artists, too. It is a virtual reality piece on our site that allows you to try on our full catalogue of lipstick shades. We’ll be putting in more investment in technology in 2017 both online and in-store.” IRW: Fast fashion entered the market a few years ago and now fast beauty is on the rise. Do you think the speed of customer demand for new beauty products will continue? LA: “Yes. It’s up to companies like Sephora to keep up with that and make sure we’re in touch with the needs of customers. We are fortunate in a way, because we’ve built our business around creating trends. We try to be well ahead of what trends are coming and we work with brands to create new products with them and give them feedback on what we’re seeing. So Sephora is influencing trends in that way. I think the speed is going to be there, but it’s about how you manage the business to be in front of it. It’s about the speed of the trend and also working in a brand environment where there’s a focus on the integrity of brands. Customers want to be part of something that’s new and innovative. We’ve really cultivated a sense of having very niche, exclusive brands at Sephora. What that means is that sometimes the brands are small and need help, so we have a hand-in-glove approach to growing their business with them. Working with niche brands requires different skills as a retailer. It’s largely about the education piece, which I feel Sephora does very well globally – we’ve been responsible for the creation and launch of many niche brands across the world that are now true big players in the beauty game. Education for niche brands is two-fold. Firstly, we develop marketing programs and strategies to help inform our beauty-savvy consumers on the relevance of new brands and why they should take note, and secondly, it’s about working with our brand partners about local market trends and what the consumer is looking for. It’s a great partnership where we can work in a collaborative way to truly be a ‘beauty incubator’ in a sense for these niche brands and watch them grow into something spectacular.” IRW: How would you describe the beauty industry at the moment? It certainly seems to be thriving at the moment. LA: “It’s really very healthy right now. There are more people really interested in beauty and the benefit that we’ve seen for our business is that we compete across multiple worlds, so we have a great assortment across skincare, fragrance, makeup, body, accessories, suncare, men’s. We really do service a broad section of consumers. Our customers can range from 11-year-old girls who are coming their very first lipgloss from the Sephora collection for $14, through to women who are really discerning when it comes to skincare and are purchasing something from Guerlain that’s more than $60 a jar. The real difference for retail in terms of beauty versus fashion is that beauty is very inclusive, it’s certainly very open to interpretation in the way that you wear a look and what your individual demands are for products, so that’s part of what’s fueled beauty globally and within Australia. In terms of where Sephora sits, we’ve really benefitted from the fact that we’re a global brand. Having 2,500 brands around the world has enabled us to quickly get into the hearts of Australian consumers. Our model is different to others in the market. The average size of our stores is 450-500sqm, so they’re very large. It’s really getting behind the idea of multiple brands, more than 100 brands to explore. There’s probably not someone who has the same presence as we do. If you look at the total beauty market, there are other competitors from standalone boutiques and department stores to other multi-brand players like Mecca Cosmetica, but we feel with the growth of the market and the fact there’s nothing that’s existed like us, there’s room for all of the players in the market today.” IRW: How has the beauty retail industry changed over time? LA: “It’s completely changed and continues to change. I think the beauty retail industry – and we’re talking the premium beauty industry here – was very focused on department stores for a very long time. The focus there was on having the counters tell the brand stories and getting customers to make a lifelong commitment to brands. That has completely changed. These days, people don’t have the same sense of loyalty to a brand, which is where you’ve seen businesses like Sephora start to take off, because people don’t feel they have to make that commitment anymore. They now rely on the retailer to show them what’s happening in terms of beauty brands and their evolution. There have been brands that we have brought in, curated, helped grow and then they’ve moved on to becoming a department store brand, which makes space for a new hip niche brand to take their place. It’s a constantly revolving door of brands. That’s what the consumer is looking for as well, they want to have an experience that allows them to try new things. That’s something that we’ve seen – that focus away from a beauty counter model and loyalty to customers now shopping across multiple brands. Through social media influencers, there’s also an element of how beauty is now very inclusive. They’ve shown people that it doesn’t have to be the makeup artists to try trends. The influencers are the ones who are building up tutorials on YouTube and they’ve been instrumental in changing the beauty business. You now have a full suite of customers who aren’t afraid of putting false eyelashes on their own or trying contouring or highlighting. They’re comfortable with trying something through tutorials.” IRW: How does Sephora work with beauty influencers and what is the strategy behind that? How have influencers impacted the business? LA: “Beauty influencers and bloggers are hugely instrumental in the Sephora business. The Sephora customer is a social shopper who is heavily inspired and influenced by what she sees on Instagram and Snapchat, so it’s important that we have a great relationship with bloggers and keep them abreast of all the latest trends they need to stay on top of. Sephora works with local influencers in a number of ways, both by staging branded events to give them easy access and face-to-face contact with our international brand partners but also by regularly sending them products that we’re soon to launch and believe they’re going to love. Influencers have impacted the business significantly, with many of our international brands gaining their local following through the power of a mention by a Key Opinion Leaders (KOLs) on social. If a brand is highlighted on social by a credible influencer, it can be the thing that moves the dial for them when it comes to sales.” Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.