Sephora to open first Australian store in December: Three things you didn’t know about the cosmetics giant

International cosmetics retailer Sephora will arrive in Australia in time for Christmas, with the retailer confirming on Thursday that it will open a stand-alone store in Sydney’s CBD in December.

After reports earlier this year that the retailer would enter the Australian market in the first half of 2015, Fairfax reports Sephora has secured a three-level 800sqm store in Pitt Street Mall which is currently occupied by clothing retailer Esprit.

It’s just the first step in the retailer’s ambitious plans to shake up the local beauty and cosmetics market, with Ravi Thakran, group president for Asia and the Middle East for parent company LVMH, telling Fairfax there is room for around 20 Sephora stores to launch in Australia in coming years.

Sephora is the fastest growing brand within the LVMH group, which includes other brands such as Louis Vuitton, Givenchy and Bulgari.

The retailer will be hoping to secure a share of Australia’s cosmetic and toiletry sector, which according to the latest figures from IBISWorld generates annual revenues of $5.5 billion, and is projected to grow at an annual rate of 3% over the next five years.

Senior IBISWorld analyst Caroline Finch told SmartCompany the local cosmetics market is “big bikkies”, with local shoppers choosing to spend their cash with a variety of retailers, including David Jones and Myer, Priceline, and speciality retailers such as Aesop and the Body Shop.

As the latest international retailer to set its sights on the Australian market, we’ve pulled together three quick pieces of information you probably didn’t know about Sephora.

1. European market leader

Sephora has a long history in the European beauty and cosmetics market, having been founded in in 1969. The retailer is now the market leader in Europe, as well as holding a large portion of the United States cosmetics market.

The business was acquired by LVMH in 1997 and now operates more than 1400 stores in 30 countries.

2. A wide range of premium products

According to Finch, Sephora will opt for a “targeted approach” to the Australian market that will be based on offering an extensive range of premium beauty products, including high-end brands such as Marc Jacobs not currently distributed locally.

For this reason, Finch believes the retailer will pose the biggest threat to DJs and Myer, rather than Priceline, which competes on everyday low prices. In fact, Finch says Sephora may complement Priceline’s strategy, with customers choosing to buy high-end products from Sephora but continuing to visit Priceline for basics.

3. More bang for your buck

Finch says the biggest challenge for the department stores will come from Sephora’s customer service strategy, with the retailer’s sales staff able to sell across brands.

While sales staff at DJs and Myer work on commissions, customers visiting Sephora stores will be shown products from more than one retailer at a time. Finch says this is likely to please shoppers, who will see value in the approach.

Internationally, Sephora is also known for providing free samples to its customers, another feature of the retailer’s strategy likely to impress local shoppers.


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