Marco, welcome. How's Sephora approaching retail media? Thanks
for having me. So our approach to retail media is that we put
our client at the center of everything we do.
We want to reach our client where they are. So that's
increasingly across multiple channels. So retail media for us
is a full-funnel strategy. It's onsite, it's offsite, it's
in-store. A huge portion of our business is offsite. It's
actually what we stood up first. So we work with the majority of
the big players across social, display, CTV, and audio. And
what we're seeing is that, you know, we want to meet our
audience where, where they are. And we go, we go where they are.
And
we have a strategy that's designed around meeting the
audience in the channels that perform best and resonate most
with them. So for us, our audiences—our focus this year is
DE and I and Gen Z.
So by extension, video has been super important for us. TikTok
and CTV are our fastest-growing channels.
So you know, low, low production, authentic video
content, user-generated content has been really important on
TikTok and Meta. And then our sort of high-production,
brand-ambassador content has been really important in CTV. So
we had
Timothée Chalamet for Chanel. We had Elton John for Charlotte
Tilbury. We had Dua Lipa for YSL. So we, we designed the
creative and audience strategy based on where the audiences are
and target them in the channels that, that resonate most for
them. You have a strong relationship network. How do you
go about building successful relationships with brands, with
retailers, with everyone?
So we're, we're extremely relational with our brands. We,
um—
Sephora Media Network is an invite-only program. We have
strong relationships, designed by our brand marketing team,
with individual brands. We know them very deeply, and our soul
ultimately at the end of the day as Sephora is that we're a
curator. We find small brands, we sign them to these exclusive
deals, we nurture them, we help them grow, and then they become
differentiators for us. So we're extremely close with our brands.
We understand how they think about their clients, and they
value
our strong relationships with our clients. We have one of the
most impressive loyalty programs in the industry. We've got 95%
of our transactions that are logged-in beauty insiders. So
those relationships between Sephora and our brands and our
clients are at the heart of everything we do as a media
network. I know so much talk is about digital, but actually the
consumer journey spans across digital and physical spaces. So
how are you thinking about using physical spaces to engage your
consumers?
We're very early in the journey to in-store monetization.
You know, the measurement piece is really the most important
thing for me in terms of solving that before we make a larger
investment. So we have a partnership with Placer.ai, so
we can measure foot traffic, and we have some hardware in store,
not for retail media, but for some of our core stuff. And you
know, what we need to figure out first is how do we tie the
impression in the store to the transaction, and how do we do it
in a way that respects the client. Privacy has to be the
number one
most important thing as we start talking about in-store. We don't
want to be sending pop-ups or notifications on people's phones
when they're in the store. People—I was just talking to
Lauren, and she was talking about her, her daughter who's
just going through the SATs, and she said to her:
"I need a break from this. I want to relax. Can we go to
Sephora?"
And we want to respect that. We don't want to mess with that
with sending notifications on people's phones. So we've got to
figure out a way to do it in a very,
in a—creating an experience that's beneficial to the client
and has measurement that, that provides that proof that it's a
performant media format back to the brand. And once we can solve
those two problems, I think in-store is going to take off
for us. Marco, thank you so much for your time. Thanks for having
me.