Source: HBR Blog Network
How Sephora Reorganized to Become a More Digital Brand
Dan McGinn | June 26, 2014
Sephora, the cosmetics retailer, has been widely recognized as a leader in integrating its digital marketing efforts into its overall strategy. As one sign of that, Sephora has a single executive who serves as both chief marketing officer and chief digital officer. Julie Bornstein told HBR how she’s leading Sephora’s efforts online and offline. Edited excerpts:
What brought you to Sephora and what was the state of its digital organization when you arrived?
It’s hard to imagine now, but I joined Sephora when mobile shopping was something of the future. E-commerce players were still figuring things out, and brick-and-mortar stores weren’t really experimenting with technology. Yet based on my own experiences, I believed we could use technology to make shopping more efficient. The original creation of Sephora.com was largely outsourced, and we didn’t have an internal digital development team when I joined. So, one of the first things I did – and something I’d recommend to anyone who’s serious about building a digital brand – was to bring web development in-house.
I recognized that we needed a stronger, more flexible foundation in order to drive digital into the future. We scouted the right talent, and put in the blood, sweat and tears. We later re-launched the website, taking it far beyond product specs and shopping carts. We built something that would give our clients access to better images, better information about products, and ways to communicate with each other. We’re constantly evolving mobile and web experiences to stay current and adjust based on our own analytics. Having an in-house team is critical.
Digital is often one of the many silos within a company. How have you addressed this since joining Sephora?
Not even a decade ago, companies like Nordstrom ran Nordstrom.com as an entirely separate business. The impact that had on the operations and culture was significant. At the time, it served an important role, and that was to create a start-up within an established company. The companies that did this have much bigger online businesses today. But ultimately, that structure isn’t customer centric. Digital being silo’d today is the result of legacy brands tacking on digital. But I believe that if you’re going to be a successful retailer – or business in general – digital must be enmeshed at the highest level.
It hasn’t been easy, but Sephora has moved to make digital as important as the physical product in our stores. It required significant shifts in our own thinking, in structure, and in hiring the right talent. And because of that, we’re far better set-up for success. We also try to think like customers – how would I want to shop, what would make my experience better, how do my kids’ interactions with technology predict the future? And then we brainstorm. Marketing and internal IT expertise are both at the table. Each group can imagine things are possible that the other might not have dreamed of. Unfortunately at many big organizations, some of the best ideas never come to fruition because the right IT expertise isn’t there. We’re lucky to have an amazing CTO with a deep knowledge of e-commerce and strong desire to partner with the business, and a strong team behind him.
When the industry was purporting that mobile was best served as a content engine and mobile shopping would take years to take off, we dove-in head first. We were one of the first to develop a mobile site, and mobile sales have grown -100% each year in the past three years. You have to back-up the hunches with the right talent and right investments. For us, it’s paid off.
You serve as both Sephora’s Chief Marketing Officer and Chief Digital Officer. Is this kind of overlap reflected in your team’s structure as well?
Absolutely. The evolution of the consumer experience is totally connected. Over a year ago, we re-established structure between traditional marketing and digital marketing teams. That may seem easy, but anyone who’s run a large organization knows it’s no small feat. It required months of planning and puzzle-solving. Frankly, it’s still a work in progress, but the teams are aligned through incentives and organizational partnership. By merging teams, we make the most of our investments across all channels and do things more efficiently, more powerfully. We also move faster – which, in this day and age, is what makes all the difference. I firmly believe that this will be the way of the future. Marketing and digital must be hand-in-hand.
The CDO is considered a trendy hire these days, and the dual role you hold is even more unique. What needs to be in place for people in these roles to succeed, and on a personal level, what is it like to manage your dual roles?
It’s new, but shouldn’t be. Having a CDO elevates digital to the c-level, giving digital a voice among top management to advocate for new efforts and build infrastructure to support ideas. I spend lots of time thinking about how to structure my two worlds to make sure we’re delivering store traffic and driving the e-commerce channel, while also thinking about the overall brand and the marketing journey. An analytics and creative organization support both the ecommerce and store marketing efforts. Many times things relate, but sometimes I have to wear distinct hats. My advice to anyone starting a company today: Have a tightly integrated CDO and CMO, if not one-in-the-same. It won’t just help operationally; it will impact the bottom line.
What haven’t you solved? What’s the current challenge on your plate?
There will always be something else to solve, something else to build. That’s what makes my role so fascinating. There will always be a new Pinterest, a new Instagram, a new desire from your customers to connect. And as the next generation of shoppers grows up, they’ll have different needs. We’re constantly evaluating new technologies and platforms. My kids are my best focus group. Sephora is headquartered in San Francisco, where we eat, breathe and live digital. We can test things early, and help influence the design. The minute we stop looking for the next consumer touchpoint is the minute we become like those who said “mobile shopping will never exist.”
Ends.
LIFE. A POST RELEASE. 