POP-UP SHOP XIMENA MARQUEZ CAROLINA VITERI FASM 410 - RETAIL MANAGEMENT PROF. ALESSANDRO CANNATA
TABLE OF CONTENTS
Table of Contents EXECUTIVE SUMMARY 1 COMPANY SUMMARY 3 - 11 About Sephora 4 - 6 Brand Identity Matrix 7 Current Positioning in the Market 8 Current Distribution 9 Communication & Promotion 10 - 11
MARKET ANALYSIS 12 - 19 PESTEL Analysis 13 - 15 Size of Retail Market 16
Table of Contents MARKET ANALYSIS cont. Direct Competition 17 Indirect Competition 18 - 19
TARGET CONSUMER 20 - 22 Target Consumer 1 21 Target Consumer 2 22
POP-UP SHOP 23 - 36 Location 25 - 29 Design 30 - 37
PRODUCT PLAN 38 - 40
Table of Contents PROMOTION 41 - 46 Omni-channel Marketing 42 Promotional Activities 43 - 46
KPI OBJECTIVES 47 - 48 FINANCIAL PLAN 49 - 54 CONCLUSION 55 - 56 WORKS CITED 57 - 62 APPENDIX 63 - 74
EXECUTIVE SUMMARY
Executive Summary
The aim of this project is to create a pop-up shop for a company that we thought had
the potential to expand in an already existing market that said company had yet to fully explore. We decided to create a Sephora for Men pop-up shop in the Financial District of New York City targeting Wall Street men. We are targeting millennial men, which is a new highly increasing market in the beauty and grooming industry based on all our research, and Gen X as our second type of consumer, which nowadays has the potential and income power to afford high-end goods.
Our main goal is to increase awareness of the Sephora brand and take advantage of the
ever-growing men’s grooming and beauty market by creating a private label called “Sephora for Men.” As we mentioned before, we are targeting a very important sector which is yet to be fully explored by Sephora. Also, we expect to increase customer loyalty in the new market in which we are introducing the new “Sephora for Men” line.
2
COMPANY SUMMARY
About Sephora Company’s History In 1969, Dominique Mandonnaud founded Sephora in France. At the time, Sephora was called “Shop 8” and it was mostly a perfumery. Women quickly became obsessed with Shop 8’s concept, which consisted of customers being able to touch, smell, and try on products. Ten years later, a dozen more Shop 8 stores opened (We are Sephora). In 1993, Shop 8 was rebranded as Sephora. By then, there were already 38 stores and 12 perfumeries. Two years later, Sephora launched their private label, Sephora, which started off with a bath & body product line. In 1996, Sephora’s flagship store was opened on Champs Elysees in Paris (We are Sephora). In 1997, the luxury group LVMH acquired Sephora. After this, the brand grew even more. A couple of years after opening their flagship store in Paris, Sephora expanded internationally to Portugal, Spain, Poland, and Italy. This led them to open stores in the US a year later and steadily expand into other countries and continents (LVMH). Sephora started opening stores inside JCPenney in 2006. They are located in the middle of the store and they resemble to any other Sephora store, the difference is that the space is not as big (Sephora).
4
About Sephora Corporate Structure Sephora’s owner, LVMH, currently owns over 60 luxury brands. These brands are categorized into five sectors: wines & spirits, fashion & leather goods, watches & jewelry, and selective retailing (LVMH). Sephora is currently categorized into the selective retailing sector. As of 2014, LVMH’s Chairman and CEO is Bernard Arnault and Sephora’s President and CEO is Calvin McDonald (Sephora). According to LVMH, their mission is to “represent the most refined qualities of Western “Art de Vivre” around the world. LVMH must continue to be synonymous with both elegance and creativity. Our products, and the cultural values they embody, blend tradition and innovation, and kindle dream and fantasy.
They also have five priorities that mirror the values shared by the group. These five priorities are as follow:
• Be creative and innovate • Aim for product excellence • Bolster the image of our brands with passionate determination • Act as entrepreneurs • Strive to be the best in all we do (LVMH)
Revenue LVMH’s Selective Retailing sector had revenue of €8.93 billion during 2013. This made up for 30.66% of the revenue of the company. For the first half of 2014, the Selective Retailing sector had revenue of €4.38 billion (LVMH). According to Reuters, Sephora is estimated to generate 15% of the luxury group’s total revenue. This would mean that Sephora had a revenue of approximately €4.45 billion during 2013.
5
About Sephora Plans for Growth Sephora’s collaboration with Marc Jacobs to launch the Marc Jacobs collection is expected to generate more than $20 million in 2014 (BoF). According to Sanford Bernstein, it is expected that they will launch more lines with LVMH brands. Sephora is also planning on opening about 120 stores a year through 2017 (BoF).
SWOT Analysis This SWOT Analysis was created based on information found on the We are Sephora website and Reuters.
6
Brand Identity Matrix Brand Identity Matrix
7
This Brand Identity Matrix was created based on information found on the We are Sephora website.
Current Position in the Market Matrix Based on primary research, we established that Macy’s, Ulta & MAC Cosmetics are Sephora’s competitors. High Price 1300 Stores Worlwide Over 300 in North America
850 Stores in North America
1000 Stores Worlwide
Low Distribution
High Distribution
715 Stores in North America
Low Price
Macy’s has 850 stores in 45 states in the United States. Their beauty product price range goes from $10 to $140 (Macy’s). Ulta has 715 stores in 47 states in the United States. Their beauty product price range goes from $4 to $100 (Ulta). MAC Cosmetics has 1000 stores in the world. Their beauty product price range goes from $16 to $200 (MAC). 8
Current Distribution Brick & Mortar Distribution Sephora currently has about 1300 brick and mortar stores in 27 countries worldwide. In North America alone, Sephora operates over 300 stores (Sephora).
E-commerce Sephora.com was launched in 1999 in the United States and in 2003 in Canada. It also has 16 international websites (Sephora). Sephora also has a mobile app through which customers can shop wherever they are.
Others Sephora inside JCPenney began operating in October 2006. Currently, there are over 485 Sephora stores inside JCPenney in the United States (Sephora.
Brick & Mortar E-commerce Sephora in JCPenney
9
Communication & Promotion Current Advertising Activities Traditional Sephora advertises through traditional forms, such as by having billboards on buildings or ads on bus stops. Also, they run magazine ads as well as newspaper ads. Digital Sephora runs ads on the side of websites and prominent blogs that are relevant to beauty and/or fashion.
Direct Marketing Activities Sephora is able to communicate with customers through traditional and more modern ways. The most traditional form of direct marketing is via catalogs and direct mail. E-newsletters are sent to customers who are signed up for them, and sometimes include coupons (DMNews). Other forms of direct marketing include social media. Currently, Sephora has over 6 million likes on Facebook, which seems to be their most popular platform. The brand also has Twitter, Pinterest, Instagram, Tumblr, and a YouTube channel.
10
Communication & Promotion Current Sale Promotion Activities Sephora’s customer loyalty program is called Beauty Insider. The customer loyalty program employs email marketing, SMS, and on a more traditional note, direct mail (Sephora). This program provides recommendations and rewards, such as earning a point for each dollar spent (Sephora).
Beauty Insider consists of three reward levels:
• Beauty Insider o Offers a birthday gift o Free beauty classes o Product rewards o Seasonal promotions • VIB (Very Important Beauty Insider) o Unlocked by spending $350 in a calendar year o All Beauty Insider benefits o First pick on new products o Seasonal VIB only gifts o Advance access sales o Private VIB only events • VIB Rouge o Unlocked by spending $1000 in a calendar year o All Beauty Insider benefits o All VIB benefits o Free shipping on all orders o Unlimited access to the Beauty Studio o Exclusive Rouge events o Special gifts 11
MARKET ANALYSIS
PESTEL ANALYSIS The following PESTEL analysis is on the United States since the potential location of our pop-shop would be in New York City. Political The United States has a Representative Democracy. This means that elected officals by the people are meant to represent the same group of people (CIA).
The government structure has three branches:
• The legislative branch comprises of the Senate, the House of Representatives, and agencies that support Congress. • The executive branch comprises of the President, the Vice President, and 15 Cabinet level executive departments. • The judicial branch comprises of the Supreme Court, lower courts, special courts, and court support organizations. Although the Federal Government goes by the Constitution and it is meant to be followed by everyone, States have their own constitutions which cover issues that the Federal Constitution does not (CIA).
Economic Currently, the United States is the largest economy in the world (CIA). The market determines the supply and demand of all products. The economy in the US is finally picking up its pace after a rough patch (US Inflation Calculator). The inflation rate as of August 2014 is of 1.7%, and the unemployment rate has dropped below 6% (US Inflation Calculator). The US Dollar is a global currency, but the Euro is a very strong competitor (CIA). 13
PESTEL ANALYSIS Social As of July 2014, the population in the US is of 318 million (CIA). The population consists of 79.96% Caucasians, 12.85% African Americans, 4.43% Asians, Amerindians and Alaska natives 0.97%, native Hawaiians and other Pacific islandesr 0.18%, two or more races 1.61% (CIA). The age structure in the US is as follows:
• 0-14 years: 19.4% • 15-24 years: 13.7% • 25-54 years: 39.9% • 55-64 years: 12.6% • 65 years and over: 13.9% (CIA). The median age in the United States is of 37.6 years (CIA).
Interesting enough, the US has no official language, but 82.1% of people speak English, 10.7% speak Spanish, and 7.2% speak other languages (CIA). Also, the literacy level is quite high, being that 99% of the population can read and write (NCES).
Technology Currently, there are about 310 million cellphone users and 245 million Internet users (CIA). Because of this, the US has proposals regarding cyber security and Internet policies (White House). The president has declared that “cyber threat is one of the most serious economic and national security challenges we face as a nation,” so his administration is constantly working on finding ways to maintain the internet safe and open (White House). Also, the America Invents Act allows companies and inventors avoid costly delays and unnecessary litigation, which in return lets them focus on innovation and job creation (White House).
14
PESTEL ANALYSIS Environmental Sadly, there are plenty of environmental issues in the US, such as air pollution, which results in acid rain, not only in the US but also in Canada, large carbon dioxide emission from burning of fossil fuel, water pollution from the use of pesticides and fertilizers, and desertification, which means that fertile land is turning into a desert due to deforestation (CIA). Despite all of that, the US is part of several international environmental agreements that have to do with issues, such as Ozone layer protection and marine dumping. Also, the US is the largest producer of environmental technologies in the world (Select USA).
Legal The US has countless federal regulatory agencies, but there are two that are especially important for us. These agencies are the Consumer Product and Safety Commission and the Food and Drug Administration. The Food and Drug Administration, or FDA, also regulates cosmetics (American Bar).
15
SIZE OF BEAUTY MARKET Retail Sales Volume According to Statista, tHe beauty industry is divided into the following six categories: •Skincare •Hair care •Make-up •Perfumes •Toiletries •Oral cosmetics Only facial skincare takes up to 27% of the beauty market. In the US, the beauty industry is worth about $56.6 billion and it is estimated that by 2016 it will be worth $62.4 billion (Statista). According to Euromonitor International, men’s grooming products’ global revenue rise an average of 6% a year. Men’s toiletries are forecasted to be a $3.2 billion market by 2016 (eMarketer). In 2009, American consumers spent $4.8 billion on men’s grooming product, while in 1997, the numbers were half that (eMarketer). Euromonitor estimates that the men’s grooming category in the US will reach $5.8 billion by 2016.
16
DIRECT COMPETITION After conductiong research, we have established that Macy’s, MAC Cosmetics and Ulta are our direct competitors since they offer some of the same categories Sephora has to offer. One fourth of the products offered by our competitors are specifically for men. Macy’s Macy’s started as a small, fancy dry goods store that opened on the corner of 14th Street and 6th Avenue in New York City in 1858 (Macy’s). By 2005, Macy’s had about 240 locations, primarily on the East and West Coasts. Now the company serves customers through approximately 800 stores in almost every major geographic market in the United States (Macy’s). Macy’s offers make-up, perfumes, and skincare products.
MAC Cosmetics MAC was established in Toronto by the makeup artist and photographer Frank Toskan (MAC). In March 1984, MAC line was launched from a single counter in a department store in Toronto (MAC). With magazine credit and word of mouth popularity the company grew. It was the first cosmetics brands which invests in the training and education of its staff as well as the customer’s point of sale experience. Mac offers make-up, skincare, perfumes, and tools.
ULTA Beauty ULTA Beauty was founded in 1990 and headquartered near Chicago (ULTA). ULTA beauty provides affordable products for its customers adding convenience and value and specialty retailing experience. ULTA Beauty also offers full-service salon in all of its stores (ULTA). Ulta offers make-up, skincare, perfumes, tools, toiletries, and hair care. 17
INDIRECT COMPETITION Truman’s Gentlemen’s Groomers They are indirect competitors because instead of having them buy our potential products and use them themselves, they could go to a spa and have other people take care of them.
Bergdorf Goodman Our target consumer could decide to go shopping for clothing and accessories for work instead of buying skincare products
18
INDIRECT COMPETITION Aspen Social Club They offer food and entertainment, so experience and self-realization can be chosen over beauty products
Amazon
19
A digital pioneer stepped into a new store for men’s grooming, with a highly visual online.
TARGET CONSUMER
TARGET CONSUMER 1 Our first target market is males between the ages of 28 to 37 years old and he works in Wall Street, which is a very important factor for our pop-up shop.
STEVEN
Steven is 29 years old and he is in a romantic relationship. He earns about $260,000 annually. Four years ago, he earned his master’s degree, and he is currently trying to get promoted to a better work position. He works in Wall St as an associate investment banker and this is his third year at the company he’s working at. He is competitive, positive and optimistic because of the type of work he’s into. He is responsible and a hard worker. Because of these reasons, he is willing to spend money on unique products and personalized services because he feels he deserves it. He lives in Park Ave and he likes to attend sport events, and he also truly likes playing golf and polo as a hobby. To relax, he sails his yacht on weekends or attends house parties at the Hamptons. Even though he works approximately 90 hours per week, he has the time to enjoy the good things in life. His status symbol is a Panerai watch. 21
TARGET CONSUMER 2 Our second target market falls in an older category. The men in this older category falls between the ages of 38 and 45 years old, and also work in Wall Street. WILLIAM William is 39 years old and a vice president of a very important company in Wall Street. He earns about $375,000 annually (Forbes). He has at least his master’s degree, he is married and has one young kid. He feels superior than others in his field and believe he works harder than everyone else. He really worries about his appearance and likes to look good at all times. When he goes shopping he likes to buy his suits at Bergdorf Goodman and Brooks Brother. He likes technology mostly for the type of work he is in and the very important position he has. He is always seeking good quality and excellent service for himself as well as for his family.
22
POP-UP SHOP
THE IDEA The idea behind this pop-up shop is to launch a private label directed to men. As of right now, Sephora is focused on their female consumers. The pop-up shop will serve as a way to introduce men in the world of beauty and grooming products. This way, they will feel right at home when they visit Sephora by themselves or with their significant others. The “Sephora for Men” pop-up shop will comprise of retail space where costumers can get to know Sephora’s products. They will be able to experience and learn about said products with the help of sales associates, or if they prefer, by using the iPads strategically placed throughout the store. Also, the pop-up shop will count with a barber shop. This barber shop will use “Sephora for Men” products so male consumers can try out the new private label. Drinks will be provided in the waiting area. The ultimate goal of this pop-up shop is to have a “Sephora for Men” area in all major Sephora stores throughout the country.
24
LOCATION
Brookfield Place, which is located on 200 Vest St, New York, NY 10281, was selected due to its prime location in the Financial District. Although it is not yet open for retail space, it is already expected to be one of the most visited places in the city (Brookfield Place).
This complex describes itself as “a world-class shopping and dining experience with a fashion collection, a European-style marketplace, waterfront dining and exceptional chef-driven restaurants.� It will be opening in Spring 2015 (Brookfield Place). We plan on opening the pop-up shop on Monday, June 1, 2015 and staying open for 2 months, meaning the last day would be Friday, July 31st, 2015. The pop-up shop will be located on the first floor, right by one of the entrances, as seen on the floor plan on the next page. 25
26
LOCATION PRIZM Segmentation Currently, there are 120,000 downtown residents, 300,000 office workers, and 25 million international tourists (Brookfield Place). The consumers are categorized as tastemakers and influencers. The median household incomes around Brookfield Place range from $100k to $200k+ annually (Brookfield Place).
Sales Potential Since Brookfield Place is yet to be completed, we have decided to open the pop-up shop after the complex has already been completed in the Spring of 2015. This should bring thousands of locals, tourists, and anyone who has been aware of the construction in the Financial District. The planned date to open is June 1st, 2015. We decided on this date because Father’s Day will be on June 21st and this will give room to some consumers to explore the store and buy gifts for their loved ones.
Estimating Competition As of November 2014, the shops planning on opening up in Brookfield Place are as follow: Hermes, Salvatore Ferragamo, Zegna, Scoop NYC, Theory, Judith & Charles, Michael Kors, Calypso, Bonobos, Aspinal of London, DVF, Equinox, Posman Books, Paul Smith, J Crew, Vince, Cos Bar (Brookfield Place). We would have direct competition with Cos Bar, which offers a similar range of products as Sephora. When doing further research, we established that although they offer men products, the range isn’t as varied as what we will be offering at the pop-up shop. 27
LOCATION Area Attractions In the Financial District, there are several area attractions, such as the WTC Memorial Park, plus countless museums through the area and the rest of the city. Also, Brookfield Place is an attraction by itself since it already hosts events ranging from music to visual art installations. As the complex reaches its completion in Spring 2015, it is expected to hold many other events that will attract more people into Brookfield Place. These events take place at Winter Garden, which is located to the west, facing the Hudson River.
Area Factors There is a direct connection to the Fulton Street and WTC Transit Centers, as well as an enclosed pedestrian concourse, and easy access to NJ path, subway lines, and the ferry terminal. Brookfield Place is at walking distance from where our target market works, which makes it the main reason for our choosing of this location. It is important that our male consumers that work in Wall St. are able to get to the Sephora for Men pop-up within minutes.
28
LOCATION Human Resources We established that, because of the size of our store is 1026 sq. ft. and the expected foot traffic, we will be needing 9 employees. The breakdown of the positions available is as follows:
• 1 shoeshine professional • 1 store manager • 1 barber shop cashier • 1 store cashier • 2 hairstylists/grooming experts • 3 sales associates
Legal Issues Since the Sephora for Men pop-up shop will have a barber shop, a license is required. A fee must be paid to New York State’s Department of State, and once the pop-up shop closes, we must let the Department of State know about the closing of the barber shop.
29
To look at the barber shop application, please refer to the appendix.
DESIGN Entry
30
DESIGN Window Display
31
DESIGN 11 12
8
10
Floor Plan 1. Entrance 2. Window Display 3. Wall Gondola Shelves 4. Wall Corner Gondola Shelves 5. Island Gondola Adjustable Shelves 6. Counter 7. Storage 8. Haircut revolving glass cubicles 9. Hair washing cubicle 10. Waiting chairs 11. Bar 12. Bar Tables 13. Shoe shine chair
8
13 9
6 3
7
5
3 2 5 4
4
1 32
DESIGN Interior
33
DESIGN Merchandise Allocation We will be placing our merchandise as follows: 1. Skin Care Products: We decided to place the skin care products at the front island shelf of the store where the customer can see them right away. 2. Hair Care Products: These products will be placed at the right hand shelves at the entrance because we feel that hair is one of the most important issues men have when it comes to find a solution. 3. Shaving: Shaving products will be placed by the barber shop. We want the customer who is getting his haircut to be looking at our products while getting our services and specifically our newly introduced category, shaving products for men.
3
4. Shaving Tools: Shaving tools will be placed by the shaving products to complement each other.
4
7
5
5. Body Products: Body products will be placed just by the counter and at the right hand of the hair products to complement each other and for customers to see the products while waiting to pay. 6. Fragrances: Our fragrance category is really important for us and our customers, so for that reason, we decided to place fragrances at the first left corner shelf of the store. 7. Gift Sets: Since we have a small percentage of gift sets selling, we will be placing them in front of the counter in a small island shelf. This is a way to incentivize the customer to buy something small and personalized of our private Sephora label before checking out.
1 6
2
34
DESIGN Technology We will be using iPads as our POS and all throughout the store. Sales associates will use them to help customers inform them about products, or even to check out if the check out line at the counter is too long. At the barber shop we will have them by the waiting area so consumers can use them to look at newspapers and magazines while waiting. On the floor, they will be strategically placed in certain areas that the customer might need help with. Two iPads will be placed specifically in the skin care island shelf. They will be showing the customer the types of products they can use depending on the type of skin they have. Also two more iPads will be placed at the shaving tools and products shelves to help customers decide what type of haircut or shaving they want to get depending on their face shape. They will have the option to see three different views of how the haircut would look on them.
Fixtures Overall Store We will be using Sephora’s iconic colors, which are black and white, but also we are adding wood to our design so the pop-up shop can stand out from other Sephora stores and it can have a more masculine feel to it.
35
DESIGN Fixtures Barber Shop Barber shop chair: Since we are targeting men, we want our fixtures to represent the store environment so we decided to use an antique yet classic and elegant brown leather chair.
Mirror: Long mirrors will be used for the Barber shop while customers are getting their haircut and shaving.
Revolving door: We decided to incorporate a fun and new idea to where the barber shop chair and the customer will be. There will be a revolving glass cubicle around them so the customer can see the store layout while getting his haircut and shaving.
Frosted glass: we are using frosted glass for the wall that separates the merchandise area from the services to create a more modern space and by giving more privacy and exclusivity to the customers who are having haircuts and shaving.
36
DESIGN Fixtures Barber Shop Waiting chair: waiting tables will be place in the area where the bar is placed. We will have comfortable seats including iPads for more entertainment.
Shoe shine chair: We decided to incorporate a shoe shine chair of dark wood to match the style of the store.
Bar tables: Tables will give a modern touch to the ambiance.
Ambiance Smells: We will be having pine/mint scents to engage customers and give them a pleasant experience while shopping and looking around. Music: We will be having modern jazz. Every couple of hours the music repeats itself. This gives a classic touch to the store.
37
PRODUCT PLAN
PRODUCT PLAN Category
Product
Style #
Size
2oz 5oz 7oz
83 17 90 128
14.95%
M
$ $ $ $
862
Deodorant Fragrance
25 16 24 35 22 33 27 26 23 17
23%
Daily Moisturizer Anti-aging Moisturizer Oil-free Moisturizer Skin Serum
$ $ $ $ $ $ $ $ $ $
4079
3oz 6oz 10oz 3oz 6oz 6oz 3oz 3oz 1.5oz
20 23 20 17
13.99%
7oz 7oz 4oz
$ $ $ $
3349
Shampoo Conditioner Hair Regrowth Treatment
19 24 15 19
7.99%
10oz 5oz 7oz
$ $ $ $
2013
All Over Wash Soap Body Lotion
27 30 28 26 24 28
22.05%
6oz/8oz 6oz/8oz 6oz/8oz 4oz 6oz
$ $ $ $ $ $
2346
Shaving Cream After Shave Lotion After Shave Gel Pre Shave Oil Conditioning Shave Lotion
$ $ $ $ $ $ $ $ $ $
29 17 45 25 60 19 10 176 125 125
1656
10.03%
306
7.99%
Fragrance
Skin Care Cleanser
Scrub
Hair
Body
Shaving
Shaving Tools Facial Hair Scissors Razor Shaver Shaving Brush Tweezers Razor blades Gift Sets
39
Shaving Cream After Shave Lotion Razor Blades Shaving Brush
5oz 3oz
Retail Price # of Units
Product Category %
PRODUCT PLAN
Besides offering our private label in the pop-up shop, we will be offering other brands.
For skincare:
• Clinique • Jack Black • Givenchy • Boscia • The Art of Shaving • Hermes • Acqua di Parma • Murad • Anthony
For shaving & grooming:
• Dior • Armani • Tom Ford • Ralph Lauren • Issey Miyake • Paco Rabanne • Jean Paul Gaultier
40
PROMOTION
OMNI-CHANNEL MARKETING Promotion Calendar
Print Advertising New York Times GQ Men's Health Esquire Outdoor Advertising Digital Bulletin Online Marketing Facebook Promo Twitter Promo Instagram Promo YouTube Videos Newsletter Event Marketing Launch Party
March
Pre-Lauch April
May
Launch June
July
August
Post Launch September
October
November
42
PROMOTIONAL ACTIVITIES Print Advertising
Pre Launch
There will be a full page ad in the New York Times since our target market always makes a point to acquire this newspaper. GQ Magazine, Esquire Magazine, and Men’s Health will have editorials about the upcoming launch of the pop-up shop in New York City and the introduction of the “Sephora for Men” product line.
Launch
There will be a full page ad in the New York Times.
Post Launch
There will be a full page ad in the New York Times. GQ Magazine, Esquire Magazine, and Men’s Health will have editorial about the pop-up shop launch event in New York City and a review of the already launched “Sephora for Men” product line.
43
PROMOTIONAL ACTIVITIES Outdoor Advertising
Pre Launch
There will be a Sephora digital bulletin promoting the pop-up shop. This digital bulletin will be located in Times Square in New York City, which is the perfect location for it to be seen by the entire city and not only by our target market.
Launch
When the pop-up shop launches, there will still be a digital bulletin promoting the pop-shop in Times Square, now really specifying where the shop is located.
Post Launch
With Father’s Day right around the corner, having the ad in Times Square will be perfect to bring in customers to check out the products “Sephora for Men” has to offer.
44
PROMOTIONAL ACTIVITIES Online Marketing
Pre Launch
Before the launch, we will be posting on Facebook, Twitter and Instagram about the pop-shop and the new product line “Sephora for Men.” Newsletters will be sent out to our client base in New York City to let them know about our upcoming pop-up shop launch.
Launch
During the launch, there will be posts on Facebook, Twitter and Instagram so consumers and fans of our brand are aware of the pop-up shop and the new product line. Also, we will be having tutorials for men on the Sephora YouTube channel. These tutorials will consist of how-to videos about shaving, hair care and skin care. These videos will also be featured at the pop-up shop. Newsletters will be sent out via email to our client base in New York City to let them know that the pop-up shop has already opened.
Post Launch
Posts on our different social media accounts will continue after our launch and after the pop-up shop closes. The point of this is to let them know that the “Sephora for Men” line will now be available at the rest of the Sephora stores. Also, old tutorials will still be available on YouTube as well as new ones.
Newsletters will be sent out via email so clients know about the availability of the “Sephora for Men” line at the rest of the Sephora stores.
45
PROMOTIONAL ACTIVITIES Event Marketing
Launch
For the launch of our pop-up shop, we will be having an event at the pop-up shop location. We will be sending out invitations to special guests, such well respected businessmen and celebrities that fit our profile, as well as to prominent magazines, such as the ones mentioned before in the print advertising section. Along with the invitation for the launch party, VIP guests will also be receiving a gift set will be containing “Sephora for Men” products. These gift boxes will have inside a shaving brush, shaving cream, and razors blades, for which our consumers will be able to buy the actual razor at the store. At the event, we will have our new product line on display. We will be offering whisky and hors d’oeuvres during the party.
46
KPI OBJECTIVES
KPI OBJECTIVES
We have set out specific objectives for our pop-shop. These objectives are the following:
Increase brand awareness among the men industry KPI • Number of new prospects in the database • Goal attendance for the store event Push Sephora’s brand KPI • Track number of items per sale • Transactions per day Customer Loyalty in order to create the new product lines for men KPI • Customer loyalty rate • % of customers in the database based on sales Leverage on the two month event KPI • Total sales per day • Average sale per customer in the VIP List
48
FINANCIAL PLAN
FINANCIAL PLAN
Please refer to the appendix for the justifications of this financial plan.
1 Month Foot Traffic Conversion rate Average Basket Total Revenues
UNITS Product Categories Fragrance Skin care Shaving Hair Body products Shaving tools Limited Edition gift set Total
Total Units 862 4079 2346 3349 2013 1656 306 14612
$ $ $ $ $ $ $
2 Month 36000 12% $75 $324,000
Avg Unit Cost 28.59 9.30 15.50 6.89 6.55 9.99 43.06
Avg Unit Retail $ 83.00 $ 27.00 $ 45.00 $ 20.00 $ 19.00 $ 29.00 $ 125.00
40000 12% $75 $360,000
MK % 65.55% 65.55% 65.55% 65.55% 65.55% 65.55% 65.55%
Total of Units % 14.95% 23.00% 22.05% 13.99% 7.99% 10.03% 7.99% 100%
50
FINANCIAL PLAN
51
UNITS Product Categories Fragrance Skin care Shaving Hair Body products Shaving tools Limited Edition gift set Total
Units Month 1 407 1926 1108 1582 950 783 144 6900
COGS Month 1 $ 11,645.23 $ 17,913.20 $ 17,170.94 $ 10,902.97 $ 6,218.49 $ 7,818.47 $ 6,218.49 $ 77,887.78
Retail Month 1 $ 33,803.28 $ 51,997.68 $ 49,843.08 $ 31,648.68 $ 18,050.76 $ 22,695.12 $ 18,050.76 $ 226,089.36
Percentage Month 1 7.06% 10.86% 10.41% 6.61% 3.77% 4.74% 3.77% 47.22%
UNITS Product Categories Fragrance Skin care Shaving Hair Body products Shaving tools Limited Edition gift set Total
Units Month 2 455 2153 1238 1767 1063 873 162 7712
COGS Month 2 $ 13,014.29 $ 20,024.52 $ 19,199.78 $ 12,173.06 $ 6,960.75 $ 8,725.68 $ 6,960.75 $ 87,058.82
Retail Month 2 $ 37,777.32 $ 58,126.32 $ 55,732.32 $ 35,335.44 $ 20,205.36 $ 25,328.52 $ 20,205.36 $ 252,710.64
Percentage Month 2 7.89% 12.14% 11.64% 7.38% 4.22% 5.29% 4.22% 52.78%
FINANCIAL PLAN SERVICES Barber Shop Haircut Straight Razor shave Shoe shine Total
2 Months Products Services Total Revenue
Quantity 1559 1120 1232 3911
Quantity Month 1 Quantity Month 2 465 1094 455 1068 1834 4309 2754 6471
Revenue $478,800.00 $205,200.00 $684,000.00
$ Month 1 $203,729.40 $87,312.60 $291,042
Avg Unit Price $42 $ $55 $ $15 $ $
% Month 1 42.55% 42.55%
1 Month 19,547.60 25,002.36 27,502.59 87,312.60
$ $ $ $
2 Month 45,940.30 58,759.95 64,635.94 205,200.00
$ Month 2 $275,070.60 $117,887.40 $392,958
Percentage 22.39% 28.64% 31.50% 100%
% Month 2 57.45% 57.45%
52
FINANCIAL PLAN Interior Fixtures Wall Corner Gondola Shelves Wall Gondola Shelves Island Gondola adjustable shelves Fluorescent Lightining Chair for Spa Facial Barber Shop chairs Glass Revolving Cubicules Table Bench Shoe shine chair Hair Styling Station Mini Bar iPads Total Exterior Fixtures Entrance Building Total
53
Unit Cost 600.00 500.00 550.00 125.00 210.00 330.00 1,080.00 168.00 315.00 2,500.00 455.00 2,600.00 500.00
Units
$ $ $ $ $ $ $ $ $ $ $ $ $
Unit Cost 22,000.00
Units
$
3 1 2 20 1 2 2 4 1 1 2 1 10
$ $ $ $ $ $ $ $ $ $ $ $ $ $
1 $ $
Cost 1,800.00 500.00 1,100.00 2,500.00 210.00 660.00 2,160.00 672.00 315.00 2,500.00 910.00 2,600.00 5,000.00 20,927.00 Cost 22,000.00 22,000.00
FINANCIAL PLAN INCOME STATEMENT REVENUE Net Sales COGS Gross Margin
OPERATING EXPENSES Design of Space Interior Fixtures Exterior Fixtures Office Supplies Shopping Bags Testers Barber Shop Expenses Wages Rent Promotional Activities Total Expenses
Earnings
$ $ $
Month 1 291,042.00 $ 77,887.78 $ 213,154.22 $
Month 2 392,958.00 $ 87,058.82 $ 305,899.18 $
Total 684,000.00 164,946.60 519,053.40
Month 2
$ $ $ $ $ $ $ $ $ $ $
Month 1 9,014.67 20,927.00 22,000.00 400.00 1,000.00 700.00 2,060.00 22,516.00 53,750.00 278,900.00 411,267.67
Total 9,014.67 20,927.00 22,000.00 800.00 2,000.00 1,400.00 3,760.00 45,032.00 107,500.00 548,700.00 761,133.67
$
Month 1 (198,113.45) $
$ $ $ $ $ $ $ $
400.00 1,000.00 700.00 1,700.00 22,516.00 53,750.00 269,800.00 349,866.00
$ $ $ $ $ $ $ $ $ $ $
Month 2 (43,966.82) $
Total (242,080.27)
54
CONCLUSION
CONCLUSION
In conclusion, the men’s grooming market is fast growing and we firmly believe that
Sephora should be taking advantage of that. The pop-up shop would be a great way to bring into Sephora a new target market and eventually creating brand loyalty after the consumer tried out the private label products.
Eventually it would be wise to merge Sephora and Sephora for Men so both males and
females have the same number of products available for each other. As seen in this project, men are as concerned about their physical appearance, and by merging, it would show that there is nothing wrong about being a man and wanting to buy some beauty or grooming product at Sephora.
56
WORKS CITED
WORKS CITED “A REVIEW OF 40 YEARS OF HISTORY AND LIFE.” We Are Sephora. 1 Jan. 2014. Web. 8 Oct. 2014. <http://www.wearesephora.com/Home/Timeline>. “About Sephora.” About Us. Sephora, 1 Jan. 2014. Web. 8 Oct. 2014. <http://www.sephora. com/about-us?mediaId=10800104>. “About Us.” Sephora. Web. 11 Oct. 2014. <http://www.sephora.com/about-us>. “Beauty Insider.” Sephora. Web. 11 Oct. 2014. <https://www.sephora.com/profile/ beautyInsider/>. “Beauty Products Retailer Sephora Promotes an E-commerce Executive.” Internet Retailer. Web. 11 Oct. 2014. <http://www.internetretailer.com/2013/03/22/sephora-promotes-e- commerce-executive>. “BROOKFIELD PLACE.” BROOKFIELD PLACE. 1 Jan. 2014. Web. 13 Oct. 2014. <http://www. brookfieldplaceny.com>. “Current US Inflation Rates: 2004-2014.” Us Inflation Calculator. Web. 11 Oct. 2014. <http://www. usinflationcalculator.com/inflation/current-inflation-rates/>. “EXECUTIVE COMMITTEE.” LVMH GROUP. LVMH, 1 Jan. 2014. Web. 8 Oct. 2014. <http://www. lvmh.com/investor-relations/lvmh-at-a-glance/executive-committee>. “FINANCIAL HIGHLIGHTS.” LVMH GROUP. LVMH, 31 Dec. 2013. Web. 10 Oct. 2014. <http://www. lvmh.com/uploads/assets/Com-fi/Documents/en/Key figures/2013_Key_figures.pdf>. 58
WORKS CITED “FIRST HALF 2014 RESULTS.” LVMH GROUP. LVMH, 24 July 2014. Web. 10 Oct. 2014. <http://www. lvmh.com/uploads/assets/Com-fi/Documents/en/Results/LVMH_HY_2014_RESULTS_ VA.pdf>. “How Much Do Wall Streeters Really Earn?” 13 Mar. 2013. Web. 13 Oct. 2014. <http://www. forbes.com/fdc/welcome_mjx.shtml>. “LVMH Counts On Sephora for Growth as Louis Vuitton Slows.” BOF. BOF, 3 June 2013. Web. 11 Oct. 2014. <http://www.businessoffashion.com/2013/06/lvmh-counts-on-lipstick-for- growth-as-handbag-sales-slow.html>. “LVMH.” LVMH GROUP. LVMH, 1 Jan. 2014. Web. 8 Oct. 2014. <http://www.lvmh.com/the- group/lvmh-group>. “MAC COSMETICS.” 1 Jan. 2014. Web. 13 Oct. 2014. <http://www.maccosmetics.jobs/mac/ our-history.html>. “Mac.” Web. 11 Oct. 2014. <http://www.maccosmetics.com/index.tmpl>. “MACY’s.” Web. 11 Oct. 2014. <http://www.macys.com/>. “MACYS.” 1 Jan. 2014. Web. 13 Oct. 2014. <http://macysinc.com/about-us/macysinc-history/ overview/default.aspx>. “North America.” The World Factbook. Web. 11 Oct. 2014. <https://www.cia.gov/library/ publications/the-world-factbook/geos/us.html>. 59
WORKS CITED “One Strong Ambition Bring Us Together.” INSIDE Sephora. Web. 11 Oct. 2014. <http://www. wearesephora.com/#/Home/Page/Id/1-inside-sephora.sls>. “Part I What Is the Rule of Law.” ABA Division for Public Education. Web. 13 Oct. 2014. <http://www.americanbar.org/content/dam/aba/migrated/publiced/features/ Part1DialogueROL.authcheckdam.pdf>. “Revenue of the Cosmetic Industry in the United States from 2002 to 2016.” THE STATISTICS PORTAL. 1 Jan. 2014. Web. 13 Oct. 2014. <http://www.statista.com/statistics/243742/ revenue-of-the-cosmetic-industry-in-the-us/>. “Sephora Beautifies On-the-go Direct Marketing.” Direct Marketing News. Web. 11 Oct. 2014. <http://www.dmnews.com/sephora-beautifies-on-the-go-direct-marketing/ article/181333/>. “Sephora CMO Debunks A Major Stereotype About Women And Tech.” Business Insider. Web. 11 Oct. 2014. <http://www.businessinsider.com/sephora-cmo-on-women-and- tech-2013-5>. “Sephora inside JCPenney.” Sephora. Web. 11 Oct. 2014. <http://www.sephora.com/sephora- inside-jcpenney?mediaId=10800108>. “SEPHORA SWOT.” Web. 11 Oct. 2014. <http://www.mbaskool.com/brandguide/lifestyle-and- retail/4961-sephora.html>.
60
WORKS CITED “Sephora.” Selective Retailing. LVMH, 1 Jan. 2014. Web. 8 Oct. 2014. <http://www.lvmh.com/ the-group/lvmh-companies-and-brands/selective-retailing/sephora>. “Technology & Innovation.” THE WHITE HOUSE. Web. 11 Oct. 2014. <http://www.whitehouse. gov/administration/eop/ostp/divisions/technology>. “The New Class System for Young Wall Street Bankers.” THE NEW YORK POST. 17 Feb. 2014. Web. 13 Oct. 2014. <http://nypost.com/2014/02/17/the-new-caste-of-wall-street-bankers-under- 30-battle-for-supremacy/>. “THE STATE OF MEN.” Web. 13 Oct. 2014. <http://www.jwtintelligence.com/wp-content/ uploads/2013/06/F_JWT_The-State-of-Men_Trend-Report_06.04.13.pdf>. “The U.S. Environmental Technology Industry.” The Environmental Technology Industry in the United States. Web. 13 Oct. 2014. <http://selectusa.commerce.gov/industry- snapshots/environmental-technology-industry-united-states>. “To Prod Men to the Grooming Aisle, Retailers Use Digital Tactics.” Men Are Not Interested in Browsing Products In-storef. 13 Feb. 2013. Web. 13 Oct. 2014. <http://www.emarketer. com/Article/Prod-Men-Grooming-Aisle-Retailers-Use-Digital-Tactics/1009662#sthash. aCNIFCus.dpuf>. “ULTA.” 1 Jan. 2014. Web. 13 Oct. 2014. <http://www.ulta.com/ulta/common/about.jsp>. “Ulta.” Web. 11 Oct. 2014. <http://www.ulta.com/>. 61
WORKS CITED OBAMA, BARACK. “Technology.” THE WHITE HOUSE. 16 Sept. 2011. Web. 11 Oct. 2014. <http:// www.whitehouse.gov/issues/technology#id-2>. SHERMAN, LAUREN. “Inside Sephora’s Branded Beauty Strategy.” BOF. BOF, 24 Sept. 2013. Web. 11 Oct. 2014. <http://www.businessoffashion.com/2013/09/marc-jacobs-sephora- lvmh-branded-beauty-strategy.html>. Wendlandt, Astrid. “Pharmacies Lure Consumers from LVMH Beauty Retailer Sephora.” REUTERS. REUTERS, 23 July 2014. Web. 11 Oct. 2014. <http://www.reuters.com/article/2014/07/23/ retail-sephora-idUSL6N0PW3DF20140723>.
62
APPENDIX
APPENDIX Size of Beauty Market In the US, 59% of American men say personal care products boost their self-esteem, and 28% say they are concerned about dry skin and visible signs of aging. In addition, 37% use facial cleanser as part of their regular grooming routine, nearly a quarter (22%) use exfoliating scrubs, 17% anti-ageing products and 12% eye cream or gels (JW Intelligence). The chart below shows the percentage of American male and female respondents about the pressure to look good in U.S. In two cases, we can see that the percentage of male respondents who think they have pressure of looking good is equal to the percentage of female respondents. In another one, men think they have a higher percentage of pressure. We can see how technology and different changes in behavior nowadays affect menâ&#x20AC;&#x2122;s esteem and pressure of being well prepared in all aspects to the society (JW Intelligence).
Source: JW Intelligence
64
APPENDIX Size of Beauty Market The chart below presents the percentage of American men reviewing the different areas of their appearance that cause them anxiety (JW Intelligence). Specifically for our project, the important fears we detect are the hair loss, signs of aging, such as wrinkles and excessive hairiness. We can detect that the areas mentioned before, can be treated if we offer the perfect products for the solution.
Source: JW Intelligence
Spas and cosmetic clinics go hand in hand with a greater focus on grooming and looks in general. “Look for far more spas to build out comprehensive, for men ‘beauty’ menus—male waxing and threading services and mangeared cosmetic procedures,” according to SpaFinder’s trends for 2013. Rarely seen in American spas 25 years ago, men now account for about 30% of U.S. spa visitors, according to Susie Ellis, president of SpaFinder (JW Intelligence). 65
APPENDIX Size of Beauty Market The chart below shows the percentage of American men who say what is acceptable for men to use or do when it comes to grooming. We can see that skin care products for men falls into the higher percentage for the three generations, Millennials, Gen Xers and Boomers. Since we are targeting Millennials and part of Gen X, the second largest percentage fall in hair removal or waxing and facials. This helps us to stay with our proposal and the type of products we will be selling the most (JW Intelligence).
Source: JW Intelligence
66
APPENDIX Target Consumer
• 40% of wall street men work until they are 37 since it’s such an intense work environment (NY Post). • 46% of workers are 32 or younger, so they fit right into our range (NY Post).
According to a recent study, millennials will soon be the largest influential market in North America by 2015. There will be more millennials than boomers, 83 million versus 74 million, still being these two the most influential groups. By 2017, millennials will have more buying power thant any other generation, according to “Talking to Strangers: Millennials Trust People Over Brands,” a 2012 report from Bazaar Voice, an Austin, Texasbased company that creates social communities for clients such as Procter & Gamble and Costco. A team of students at Pace University found that “millennials highly value their self-image and, therefore, their purchases reflect their personality and how they want to be seen by others” (WARC). This is one of the reasons why millennials are also part of our target market
67
•Buying Power Index in NYC New York: 1.000
•Per capita disposable personal income in New York City $45,600 = 2013
APPENDIX Legal Issues
68
APPENDIX Legal Issues
69
APPENDIX Legal Issues
70
APPENDIX Legal Issues
71
APPENDIX Financial Plan
Foot Traffic, Conversion Rate and Average Basket
Foot Traffic per day was first estimated based on the new residents totaling 61,000 in the area. The number of workers in the area 310,000 and 11.5 million tourists expected according to the Alliance for Downton. The areaâ&#x20AC;&#x2122;s spending power is $5.2 billion and will be one of the busiest foot traffic areas in the world. Also we took into account the size of our store and the estimated traffic per hour. We came up with number of 43,662 people for the first month and 32,338 for the second month, being 10.53% lower. We estimated that the convertion rate for our company will be 12% and an average basket of $75, since we carry products ranging from $25 to $125. For the total revenues we multiplied foot traffic by conversion rate and average basket for each month. We ended up having $291,042 for the first month and $392,958 for the second one.
2 Month Revenue breakdown
Since we are offering services and selling products in our store, we did a breakdown of revenues. For products and services, we are forecasting to sell of our total revenue for the first month 42.55% and 57.45% for the second one. We have different percentages per month since our foot traffic will vary from the first month to the second one.
Units
For each product category we calculated the total units, based on the amount of people coming into the store, and total units per category per month. We calculated average prices and percentages for each category. To calculate units per month/per category we multiplied the retail price of the specific category by the average retail price per unit.
72
APPENDIX Financial Plan cont.
Prices
For the retail price per month we multiplied the percentage of the corresponding month by the total revenue of the month.
Costs
We have a Mark Up % of 65.55%. We calculated the average unit cost per category multiplying the average unit retail price by the MU%. Then for the unit cost per each month we multiplied the average unit cost by the number of units forecasted to sell for the month.
73
APPENDIX Appendix Sources “MARKETING TO MILLENIALS.” WARC. Web. 14 Nov. 2014. “The New Class System for Young Wall Street Bankers.” THE NEW YORK POST. 17 Feb. 2014. Web. 13 Oct. 2014. <http://nypost.com/2014/02/17/the-new-caste-of-wall-street-bankers-under-30-battle-for-supremacy/>. “THE STATE OF MEN.” Web. 13 Oct. 2014. <http://www.jwtintelligence.com/wp-content/uploads/2013/06/F_ JWT_The-State-of-Men_Trend-Report_06.04.13.pdf>.
74