Is Sephora Living Up to Its Price Promises?

What happens when retailers do not live up to the promises they make to customers (or seemingly do not live up to them)? The social media fallout is typically fast and furious.
The global Sephora chain, owned by upscale LVMH Moët Hennessy Louis Vuitton, is known worldwide for its extensive assortment of personal care items and for its huge brand selection.
Although is not really known for its low prices, Sephora does offer periodic sales. Recently, it ran a price-oriented ad campaign when it opened a new store in Sydney, Australia. But, critics claim that this promotion has not lived up to expectations.
As reported by Adele Ferguson for the Sydney Morning Herald:
“Sephora’s promise was pretty clear. When it opened its doors on December 5 to throngs of consumers – many of whom had camped out overnight – the global cosmetics giant claimed its arrival marked the end of price gouging in Australia. Ravi Thakran, the Asia and Middle East president for global luxury goods group LVMH Moët Hennessy Louis Vuitton, which owns Sephora, told Fairfax Media at the time ‘That’s a big promise and we will certainly keep that’.”
“But the reality is vastly different. Sephora is not living up to its promises of lower prices and social media have found it out. A deep dive into comparisons of the prices at which Sephora is selling some of its products in Australia versus the U.S., reveals its claims are full of hype. In some cases, the prices discrepancies, factoring in taxes and the exchange rate, are as high as 60 per cent. Even if shipping costs are taken into account, the price differentials are still massive.”
“The fact that Sephora’s pricing claims fall short of reality is bound to have an impact on brand trust. If it continues to adopt a policy of silence instead of confronting the questions head on, including an explanation for why its prices are up to 60 per cent higher in Australia than in the U.S., its reputation will suffer.”
Click the image to read more.

Shoppers flocked to Sephora’s Pitt Street Mall store when it opened in Sydney. Photo: Dallas Kilponen


 

This entry was posted in Global Retailing, Part 3: Targeting Customers and Gathering Information, Part 6: Merchandise Management and Pricing and tagged , , , , , , , . Bookmark the permalink.

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