If you are a beauty brand, the fight to enter Sephora is a war. They are the belle of the ball, the one every brand wants to date, fall in love with, and marry. They hold the power. But with every new generation and technological shift, power always moves.
By 2031, it’s conceivable to me that Sephora could become a giant product-testing house, and you might pay just to get in. It sounds absurd until you realize how far our addictions to instant gratification and convenience have taken us, and when personalization goes sonic, Sephora may not win against Amazon and those building trusted personal shopping agents.
My mother once worked at a fashion discount store that had a layaway program. Translation: If you loved something you couldn’t afford, you’d put down a few dollars and pay in cash every week until it was finally yours. My mom would hold the garment at the store until you paid in full. The upside? You emotionally invested in the thing you wanted, and the prize felt like it had more meaning (at least that’s what my mother recalled, the joy of someone getting that leather coat after four easy payments). Today, Afterpay, Affirm, and Klarna front-load that, and so your payments come after the gratification.
Today, we are upset if we walk into Sephora and our product is not in stock. We then pull out our phones and start searching for where and how quickly we can get it. Most often, we check Amazon. At my local Sephora store, they jam the internet so you cannot even do that in front of the shelf. You literally have to walk out of the store to order it. I am not exactly sure why they jam the internet, even the workers in there don’t know why (I’ve asked them). I have a funny feeling that it’s a defensive transaction bleed issue. The number of out-of-stock items at Sephora is real, due to theft and open-to-buy limitations. The star of the Sephora store? It’s not the cool music or the beauty advisors dressed in all black. It’s the all-you-can-eat testers, the shade check, the packaging check, and the scent check, all of which are free today. Who pays for that? It’s not Sephora, the brands do, as part of their budget. In my career, I have done countless analyses on creating less expensive testers (dummies, refills, cheaper packaging) to reduce cost, and every one ended in the same conclusion: it’s just not worth it.
Sephora can unravel due to the forces that it cannot compete with. In terms of inventory, Sephora cannot beat Amazon. Now, enter the personal beauty shopping agent. Sound crazy? OpenAI has already built commerce with Shopify and Etsy. Imagine walking into Sephora, testing a foundation, saying “add it,” and your AI shopper finds the best deal across every retailer with the best price, delivery terms, so that you can skip checkout and carrying a bag.
Your personal shopper will remember everything, like:
Warn me if I buy another _____!
No talc
Support indie brands this month
Stay under $50
How many times have you gone into Sephora to smell a new fragrance or feel the texture of a new moisturizer, only to buy it later somewhere else? If all possible inventory lives at Amazon, how can Sephora compete?
When they finally wake up to this reality, when personal AI becomes smarter and more rewarding than the free birthday gifts you don’t want, when Beauty Insider points no longer pull, and the stickiness of Sephora fades, then what? They may not be able to compete. Which is why my prediction holds water. You’ll walk into Sephora in the future just to play, not to buy.
My prediction is that it will evolve into a giant testing candy store, because even with a plethora of online recommendations, you still have a desire to play in person before you buy, and we all know that smell-o-vision isn’t coming anytime soon.
Here’s a hypothetical question for you: Would you pay-to-play at Sephora?
Comments
Nothing yet. Say the first thing.
Sign in to join the conversation.