4 Reasons Why Sephora Loyalty Program is the biggest disruptor in Loyalty Space

FOR THOSE WHO ARE WONDERING, SEPHORA IS A FRENCH MULTINATIONAL RETAILER OF PERSONAL CARE AND BEAUTY PRODUCTS WITH NEARLY 340 BRANDS, ALONG WITH ITS OWN PRIVATE LABEL.

SEPHORA OFTEN GETS THE PRAISE FROM BUSINESS STALWARTS FOR THE GENIUS EXECUTION OF ITS LOYALTY PARTNER PROGRAM - BEAUTY INSIDER PROGRAM.

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WHAT IS THE PROGRAM?

Sephora's Loyalty Program, known as "Beauty Insider," is a tiered loyalty program designed to reward customers for their purchases with points that can be redeemed for various benefits.The program is divided into three levels: Insider, VIB (Very Important Beauty Insider), and Rouge, with each level offering increasing rewards based on annual spending.Benefits include free products, exclusive events, beauty services, and early access to products.

• Insider: Free to join, offers 1 point per dollar spent, birthday gifts, and access to free beauty classes.
• VIB: Requires a minimum spend of $350 per year, offers 1 point per dollar, enhanced birthday gifts, and additional rewards.
• Rouge: Top tier, requires $1,000 spend per year, provides 1 point per dollar, free standard shipping, exclusive events, and special gifts.

WHAT PROBLEM DID IT SOLVE?

Before the implementation of Beauty Insider, Sephora faced challenges in retaining customers and differentiating itself in a competitive market. The program addressed these issues by:

• Enhancing customer retention through loyalty rewards.
• Encouraging increased spending to reach higher tiers.
• Collecting valuable customer data for personalised marketing.
• Creating a community of beauty enthusiasts through exclusive events and classes

4 REASONS WHY IT IS THE BEST LOYALTY PROGRAM IN D2C SPACE.

The uniqueness of Sephora's Loyalty Program lies in its tiered structure, personalized rewards, and experiential benefits, setting it apart from typical discount-based loyalty programs. Key features include:

• Personalization: Offering rewards that cater to individual beauty preferences and shopping behaviour.
• Exclusivity: Access to events, products, and beauty services that create a sense of belonging to a community.
• Flexibility: Points can be redeemed for a wide range of rewards, allowing customers to choose what they value most.
• Digital Integration: Seamlessly integrating with Sephora's online platforms and mobile app for easy tracking and redemption of points.

HOW SUCCESSFUL DID THE PROGRAM BECOME?

Sephora's Beauty Insider Program has been highly successful in driving customer loyalty and increasing sales. Key success metrics include:

• Membership Growth: As of my last update, the program boasted over 34 million members, making up a significant portion of Sephora's annual sales.
• Increased Spending: Members of the Beauty Insider program spend on average 3X more than non-members.
• Engagement: The loyalty program members drive 80% of sales at the platform.
• Business Impact: LVMH’s selective retailing branch, which includes Sephora, reached €17.9 billion in revenue, a +25% organic growth from last year, and generated a staggering 76% increase in profits from recurring operations.