Sephora boss opens up about French cosmetics retailer's New Zealand expansion plans

Benjamin Vuchot, Sephora president of the Asia Pacific region. Photo / Supplied

French cosmetics retailer Sephora is taking the plunge by opening a glitzy store marking its launch into New Zealand's struggling retail market.

But Benjamin Vuchot, Sephora president of the Asia Pacific region, says the beauty and cosmetics market is immune to the woes facing the rest of the sector globally, and the retailer is not worried about increasingly downbeat consumer confidence.

Sephora, owned by multinational luxury goods group LVMH Moët Hennessy Louis Vuitton, is operating in 35 markets. Of those, Vuchot said, 20 are growing at double-digit rates.

"When people say retail is going through difficult times and retail is dead, we say no, bad retail is dead. Good retail is experiential retail and that's what customers are looking for," Hong Kong-based Vuchot, who is in New Zealand for the opening of Sephora's first New Zealand store in Auckland today, said.

"If you combine that with an innovative and daring e-commerce strategy and really dive into this omni-channel obsession you are able to stay the leader in beauty retail, and that's what Sephora is today."

Bringing a Sephora store to New Zealand has been more than two years in the making, Vuchot said, speaking exclusively to the Herald.

The retailer, which by the end of the year will have 250 stores worldwide, decided it would launch here shortly after it expanded into Australia four years ago.

"As soon as we established ourselves in Australia we realised that there was an amazing opportunity not too far away, with a very distinct customer."

Sephora has been quietly operating an e-commerce store in New Zealand for the past three years. Vuchot said the e-commerce-first approach was intentional, and part of its strategy to get to know the New Zealand consumer ahead of a physical launch.

This is not a strategy Sephora has taken with all new market launches.

Sephora acquired cosmetics startup Luxola based out of Singapore which had an e-commerce presence in eight markets in 2015 which propelled itself much faster into the online space in certain markets, including in New Zealand.

Following the opening of the Queen St flagship store, Sephora plans to open six others in the country within the next five years.

It plans to have between two and three stores in Auckland and others in Christchurch and Wellington.

Sephora

Vuchot said the retailer used digital sales and e-commerce insights to help it make decisions of where to open physical stores in each market.

The lower level of Sephora's 152 Queen St location is the retail store; the second and third levels will be home to local management and a "Sephora university" where it will hold product training and demonstrations with staff.

Sephora secured the lease to its 500sq m Queen St store in the heritage site over a year ago and started on designs for the fit-out shortly after.

"We were very conscious to be welcomed in the district and worked very closely with Auckland Council to preserve heritage elements of the building, particularly the facade. It was a love affair, this renovation," Vuchot said.

The store may have a heritage feel but is kitted out with the latest retail technology, including magic mirrors which allow consumers to virtually try on make-up. Other features of the store include make-up and skin care stations.

Though Sephora's launch in New Zealand is largely regarded as late to market, the cosmetics giant is yet to launch in Korea - the fourth largest beauty market in the world.

In September it will launch in Hong Kong, and in Korea in October.

Inside Sephora's Auckland store, which opened today. Photo / Supplied

Vuchot said the beauty and cosmetics market was booming, largely driven by the wellness trend. "Beauty touches everyone, from seven year olds to ageless, consumers, they always want to feel more beautiful.

"The industry itself, particularly in the prestige beauty, has been a source of a lot of innovation, there's been an explosion of makeup which has been very, very strong growth in this part of the world for the last few years with lots of new brands coming in, many of which did not exist a few years ago; they are now $100 million companies that still have to conquer the hearts of consumers internationally.

"There's a professionalisation and there's a premiumisation of beauty that is happening in makeup ... we're also seeing a very strong rebirth of skin care. Australia and New Zealand in particular, have this very important belief in wellness and clean beauty."

Vuchot believes the key to success in retail is offering consumers experiences and services, with the emphasis taken off the transaction.

Sephora was founded in France by Dominique Mandonnaud in 1970, and was later sold to LVMH in 1997.

Sephora's international expansion outside France and North America, its historical market, is fairly recent. The company opened its first stores in China 14 years ago, Singapore 11 years ago and then into Malaysia, Thailand, Indonesia and India.

The North American market is Sephora's largest business, but the Asia Pacific region is its fast-growing.