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Marco, welcome. How's Sephora
approaching retail media? Thanks

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for having me. So our approach
to retail media is that we put

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our client at the center of
everything we do.

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We want to reach our client
where they are. So that's

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increasingly across multiple
channels. So retail media for us

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is a full-funnel strategy. It's
onsite, it's offsite, it's

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in-store. A huge portion of our
business is offsite. It's

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actually what we stood up first.
So we work with the majority of

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the big players across social,
display, CTV, and audio. And

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what we're seeing is that, you
know, we want to meet our

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audience where, where they are.
And we go, we go where they are.

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And

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we have a strategy that's
designed around meeting the

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audience in the channels that
perform best and resonate most

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with them. So for us, our
audiences—our focus this year is

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DE and I and Gen Z.

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So by extension, video has been
super important for us. TikTok

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and CTV are our fastest-growing
channels.

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So you know, low, low
production, authentic video

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content, user-generated content
has been really important on

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TikTok and Meta. And then our
sort of high-production,

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brand-ambassador content has
been really important in CTV. So

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we had

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Timothée Chalamet for Chanel. We
had Elton John for Charlotte

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Tilbury. We had Dua Lipa for
YSL. So we, we designed the

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creative and audience strategy
based on where the audiences are

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and target them in the channels
that, that resonate most for

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them. You have a strong
relationship network. How do you

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go about building successful
relationships with brands, with

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retailers, with everyone?

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So we're, we're extremely
relational with our brands. We,

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um—

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Sephora Media Network is an
invite-only program. We have

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strong relationships, designed
by our brand marketing team,

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with individual brands. We know
them very deeply, and our soul

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ultimately at the end of the day
as Sephora is that we're a

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curator. We find small brands,
we sign them to these exclusive

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deals, we nurture them, we help
them grow, and then they become

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differentiators for us. So we're
extremely close with our brands.

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We understand how they think
about their clients, and they

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value 

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our strong relationships with
our clients. We have one of the

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most impressive loyalty programs
in the industry. We've got 95%

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of our transactions that are
logged-in beauty insiders. So

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those relationships between
Sephora and our brands and our

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clients are at the heart of
everything we do as a media

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network. I know so much talk is
about digital, but actually the

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consumer journey spans across
digital and physical spaces. So

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how are you thinking about using
physical spaces to engage your

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consumers?

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We're very early in the journey
to in-store monetization.

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You know, the measurement piece
is really the most important

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thing for me in terms of solving
that before we make a larger

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investment. So we have a
partnership with Placer.ai, so

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we can measure foot traffic, and
we have some hardware in store,

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not for retail media, but for
some of our core stuff. And you

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know, what we need to figure out
first is how do we tie the

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impression in the store to the
transaction, and how do we do it

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in a way that respects the
client. Privacy has to be the

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number one

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most important thing as we start
talking about in-store. We don't

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want to be sending pop-ups or
notifications on people's phones

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when they're in the store.
People—I was just talking to

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Lauren, and she was talking
about her, her daughter who's

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just going through the SATs, and
she said to her:

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"I need a break from this. I
want to relax. Can we go to

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Sephora?"

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And we want to respect that. We
don't want to mess with that

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with sending notifications on
people's phones. So we've got to

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figure out a way to do it in a
very,

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in a—creating an experience
that's beneficial to the client

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and has measurement that, that
provides that proof that it's a

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performant media format back to
the brand. And once we can solve

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those two problems, I think
in-store is going to take off

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for us. Marco, thank you so much
for your time. Thanks for having

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me.

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