Popular retailer making major change to how you shop

Though it may not feel like it, there’s more than one model that leads to success in the retail world today.

For some retailers, the answer may be to focus strictly on online sales, as brick and mortar locations can drag down profits and slow down growth.

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For others, accessibility to most every shopper in America via large warehouse retail space is the answer.

Other captivate customers with aspirational luxury, selling shoppers on the chance to buy into a lifestyle or name brand that offers them a mood or a membership to some exclusive club.

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One of the more successful retail models over the past decade has been Sephora, which blends the success of brick and mortar with online sales, plus a healthy dose of aspirational luxury. And in some cases, all-out luxury. Not everyone can afford a $610 cream moisturizer, after all.

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Sephora is lauded partly because of its ambitious growth plans, but also because it almost perfectly threads the needle between young shoppers on a budget but a heavy ability to buy into and propel trends, and a more mature audience seeking out quietly luxurious products, like fragrance or upscale beauty devices. 

Shoppers enter a Sephora store in Spain.

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Sephora wins in a competitive market

Sephora’s ascendence was achieved with a somewhat uncommon approach. The luxury goods company LVMH owns Sephora, a retailer that’s in a highly competitive space. Every high street and luxury brand already has its own beauty line, including Christian Dior and Gucci, and so do many lower end retailers like H&M and Forever 21.

Sephora’s success doesn’t come from creating its own brand that’s supremely better than incumbents already in the space — though it does have its own popular brand sold in stores and online. Rather, Sephora’s success comes from curating all of the top brands at the moment. Reports suggest that some makeup brands pay upwards of $100,000 just for a small shelf space in stores.  

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It makes sense. Sephora’s allure is that it features a highly experiential brick and mortar experience. Online sales are robust too, but to get the full experience, many customers prefer to go into physical stores and sample products before buying them. This is an invaluable process in the makeup community; shoppers can swatch lipsticks and foundations to test for color matches, sample perfumes, try on face moisturizers, and more.

Sephora planning major investment

They say major store renovations happen when times are either really good or really poor for a business. And it seems the former is the case for Sephora. 

The beauty store announced in January that it would revamp all 700 of its North American locations, with some getting an overhaul and others receiving a few tweaks here and there. The project began in autumn 2024 and will continue over the next five years.

“We’re not a cheap date, and we don’t want our brands to be spending a ton of money on building these amazing fixtures, and then it doesn’t work out,” Artemis Patrick, president and CEO of Sephora North America, said at the NRF’s Big Show Conference. 

Some renovations will include changes to Sephora’s iconic checkout process, which requires customers to “snake” through a maze of mini sample products, available for purchase before hitting the cashier. 

But since about a quarter of shoppers are now using mobile assistants to check out, Sephora will put modular displays throughout its stores to tempt customers sporadically, rather than all at once before checking out. And these displays will be able to move, depending on customer behavior. 

“We can actually break up the fixture and move it to the front if we wanted to, creating a much more agile footprint,” Patrick said. 

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