The Risks and Rewards of Fostering a Culture-Centered Brand

Once upon a time, companies could build a corporate reputation based solely on their products’ quality. In fact, the term “brand” harkened back to ranching practices when the “product” would literally bear the brand/symbol of its owner as a mark of its quality. Faster, better, crunchier, more absorbent—these were the attributes that marketers touted. 

Today, marketers still lean heavily on functional differentiators to tell their story. But for many years, Sephora has had a contrarian view. We’ve relied less on functional differentiators and more on human ones. This decision has proven to be a powerful strategy for our business. At the same time, we have learned over the years that having a human-driven brand comes with risks. Humans are not perfect, and organizations may stumble. We are still learning to manage these risks, but we believe the power of standing for something bigger, something more personal, will help the brand continue to thrive. 

From Sephora’s origins in North America, it was clear that a personal approach to beauty would matter to the business. The executives who brought the store concept to the U.S. established early on that Sephora would be a different kind of retailer—one where you didn’t need to wade past pushy, commission-based salespeople to try a new perfume. Instead, shoppers were free to explore. If clients needed help, a well-trained and supportive staff would provide assistance. If you simply wanted to test out the makeup for free, that was OK too. All were welcome.

To pull off a differentiated beauty experience, Sephora needed to build a people-centric strategy. Our people set the tone for your shopping experience. Our people helped you navigate a dazzling assortment of product and find the right one for you. Our people became your trusted friend when you needed a little “retail therapy.”

We invested in people first. For years, our field education team outnumbered our brand marketing organization. Our biggest marketing event was an internal rally of our field organization held every year. We were an “inside out” marketing model, one that insisted that a strong brand experience speak for itself vs. relying on an advertising campaign to tell the company’s story.

Our parent company, LVMH, was incredibly supportive. As a firm dedicated to creativity and craftsmanship, they have always declared that people make the difference. This is true for a luxury goods company. But it was especially true for a retail organization.

This focus on the culture worked. Growing from one store in SoHo in New York City, we now support a network of more than 1,000 stores in the U.S. We’ve gone from being the challenger brand in prestige beauty to carrying the largest slice of market share in our industry.

Beyond the store experience, we were growing a reputation for being a welcoming employer overall. For instance, in our distribution centers, Sephora established a goal of staffing 30 percent of our workforce with people with disabilities. As we opened new distribution hubs, teams worked closely with local nonprofits and agencies to train, onboard and create a welcoming culture to embrace these incredible talents. It’s been a powerful program that has enriched the work experience for all our employees in our distribution centers.

Over time, the Sephora experience could be defined by its people and our personal connection with our clients. We added makeover and skincare services, so every day, employees were having deeply personal interactions with clients. We introduced free beauty classes to share our knowledge and passion with our clients. We extended this program to our local communities so that we now offer workshops for people re-entering the workforce, a specialized curriculum for people facing cancer, and a class providing a safe and respectful community environment for the transgender and nonbinary population.

Given the strong focus on the personal beauty experience, we made our employees the visible heroes of our marketing. We cast our Beauty Advisors in multiple campaigns. When it came time to expand our influencer strategy last year, we included employees in our Sephora Squad vs. just hiring famous names online. Who better to advocate for the brand in social media than the very people who knew us best?

As it turns out, Sephora’s success talking about its values aligns with the trend we’re seeing in the marketplace overall. Consumers are demanding that brands go beyond the product benefits alone. Sephora recently conducted a study to understand the importance of brand values to beauty consumers. We found that being honest/open (56 percent) ranked even higher than having an informative website (50 percent). 

Consumers care, of course, that the products they’re buying perform as promised. But that’s table stakes. They’re also asking that companies be more transparent. Where were the ingredients sourced? Who is the founder of the brand? What does the company stand for?

In our research, we’ve seen a rise in consumers seeking brands that reflect their values. When Sephora asked beauty purchasers how they felt about companies sharing their values, they responded:

• 35 percent: I prefer to buy from companies that have the same shared values as me.
• 30 percent: I prefer to buy from companies that honestly publicly share their values, even if those values are different from mine.

While company values aren’t always an affirmative reason to buy, they can certainly be a reason to quit a brand. In today’s “cancel culture,” more consumers say they will delete an app, cancel a membership or rethink their purchases when they are disappointed by a company’s misdeeds. 

This focus on culture at the center of the brand might seem like an amazing win-win that’s great for clients and great for employees. But building a brand based on human relationships has its challenges too. 

Case in point: In summer 2019 Sephora introduced a marketing campaign called “We Belong to Something Beautiful.” Launched during Pride Month and featuring a cast and crew of transgender and nonbinary artists and advocates, this campaign was inspired by stories of people finding their safe space at Sephora. It was one of the most visible campaigns a major brand had launched on gender identity. In it, we publicly committed that Sephora never stops working to create a beauty community where everyone feels included. 

But in the middle of our launch, a celebrity tweeted that she had been followed by security in a Sephora store. This tweet set off a wave of internet outrage and conversations about racial profiling. The conversation reflected deeper challenges with retail at large vs. Sephora in particular; however, it was an eye-opening moment for us. We never want any client—famous or not—to feel uncomfortable in our stores.

Here was the rub: Is it even wise to build a brand around a human experience—when that experience is ultimately dependent on the consistency of more than 15,000 employees? We have millions of client transactions each year, and while most are good, if not great (according to our Net Promoter scores), we don’t get it right 100 percent of the time. That is a vulnerability.

We had serious discussions over the summer about how we were going to respond. We apologized to the celebrity but also took the opportunity to dig deeper into the broader story. We went on a multi-location listening tour to hear from clients of color and their experience at retail and at Sephora. 

What we heard was that bias in retail is real, and that it affects how even loyal customers interact in retail settings. How do you dress to look like you can afford the merchandise? How can you get service in store when no one looks like you? 

One of our own employees noted that she had worked in various retailers for years, and yet she is super conscientious about her behavior in stores. She wears prescription sunglasses, and when she steps inside a store and needs to change to her regular glasses, she intentionally does this at the threshold of the store, lest she be seen rummaging in her purse. 

We were saddened to hear about these experiences, and we were wondering why we didn’t see a strong pattern earlier. But when we dug deep, we learned that clients are often resigned to being ignored, and that experiencing microaggression and misperception is normal. When issues arise, some clients don’t even want to make their concerns known, as they don’t want to be seen as the “angry black girl.” 

Our realization after these sessions was that we were going to have to look harder, be more sensitive and be more self-critical of the experience we were providing. As our head of stores noted: “We are good, but we could and should be great.”

From Sephora headquarters, we started to re-examine many of our practices—from the greeting experience to our loss-prevention policies. We quickly saw that to deliver fully on our commitment of an inclusive and welcoming store, we needed a complete cross-functional engagement in realizing our values across the entire system. This was a plan built by the full operating committee and sponsored by both our CEO and our global CEO. 

Then we got to work. We invested in training for the entire organization—working with partners like the NeuroLeadership Institute to develop a research-driven curriculum. We started fine tuning our Color IQ technology to further serve clients of color with shade matching—not just understanding skin shade, but also undertones. We built a more extensive marketing library of how-to content to serve a broader range of beauty needs. We covered topics like nude lipsticks for all skintones, foundation for mature skin, and eyeshadow for “hooded” eyes. We tapped into our employee resource groups, which evolved from being groups focused on community to becoming a critical sounding board for the organization.

We are by no means done with our work. But we’ve learned a few things about the path we’ve chosen as a brand.

1. Human brands create their own support system. 

In the heat of the backlash we experienced on social, we saw some people speak out. This included employees who said: “We’re sorry to hear this. But this is not fundamentally who we are.” 

One of the parts of our We Belong to Something Beautiful campaign included video stories of belonging from our employees and clients. We heard from men who discovered a love of makeup. Transgender employees who found their strength sharing beauty with clients. Disabled clients who overcame prejudices. We were prepared for a level of negativity for some of these stories given their content. But by and large, what we received on social was an outpouring of support.

 

“I absolutely love the fact that you guys didn’t support pride month just by slapping a bunch of rainbows on your brand and calling it a day. 10/10 going to Sephora ASAP.”

“This video makes me want to shop exclusively at Sephora in the future! You are amazing.”

“I am so inspired by this whole campaign and the individuals who are featured.”

By showcasing the humanity of the people who are part of our community, the community embraced us even more.

2. Human brands can make friends. 

We had a strong network of partners before our Belong project, but over time, we met new friends. We worked with an amazing array of leaders in the equality and justice space on how to be even more inclusive of different clients, employees and stakeholders. 

These partnerships were only possible because we raised our hands and asked for help. Just like a person in a human relationship, Sephora found that earnestness and transparency helped foster trust. We were transparent about the steps we were taking to do better for our clients, but we were also honest in admitting we did not have all the answers. 

Human brands can ask for help. Human brands can make amends. Human brands can commit to taking steps forward with the support of their friends. We’ve been so heartened by the partnership we’ve received from experts who have met us in our journey and have offered their expertise, guidance and support.

3. Human brands have room for continued growth and leadership. 

By being vulnerable about our strengths and opportunities, we got to know other retailers who are working on their inclusion plans too. So in fact, our hope goes beyond our four walls. Our aim is to develop insights and best practices that can be shared with colleagues in the industry. We’ve commissioned a retail-wide study on examining the state of bias in our industry. We intend to share the results publicly so that we can all learn.

Then within Sephora, we’ve set aside the capacity to implement interventions that can improve our results. The hope is that there can be an empirical approach to measuring before and after results to our inclusion efforts. Just as we A/B test our digital efforts, we can measure the softer aspects of our experience as well.

It’s a common concept in branding that a great brand should be like a person. It should have a tone of voice, a brand personality and a sense of style. But beyond these superficialities, great brands should have values and should not be afraid of expressing them—even if they are aspirational. 

For Sephora, we’re just beginning our work, but we’re starting to see encouraging results. We’ve seen growth in brand consideration and preference, especially amongst LGBTQ+ and minority populations. We see that the idea that Sephora is a diverse and inclusive retailer continues to grow.

We are determined to do our part to improve the retail experience for all and are building a new set of metrics by which to assess our business. For instance, we are examining the entire consumer journey—from pre-shopping to the purchase to repeat visit—to understand where clients feel most and least included. At the same time, we’re looking to catalog forms of unfair, marginalizing, alienating and harmful experiences that consumers of color have in retail settings. The goal is to identify patterns and incident rates, and then start to point to solutions. 

Some define culture as the consistent expression of beliefs and values in a person or organization’s actions. The key word here is consistent. We know that in an organization as large and diverse as Sephora’s, we’ll never be perfect all of the time, but our ultimate goal inspires the whole team, so much so that we’ve written it on the walls of our stores.

SEPHORA BELIEVES IN

CHAMPIONING ALL BEAUTY,

LIVING WITH COURAGE, 

AND STANDING FEARLESSLY TOGETHER

TO CELEBRATE OUR DIFFERENCES. 

EVEN IF WE STUMBLE,

WE WILL NEVER STOP BUILDING A COMMUNITY WHERE

DIVERSITY IS EXPECTED

SELF-EXPRESSION IS HONORED

ALL ARE WELCOMED

AND YOU ARE INCLUDED. 

WE BELONG TO SOMETHING BEAUTIFUL

Deborah Yeh is Chief Marketing Officer at Sephora. She can be reached at Deborah.Yeh@sephora.com.