How Sephora is redefining loyalty beyond coupons and points

What goes into building a 38+ million member-strong loyalty program? It’s something Emeline Berlind, Sephora’s Senior Vice President and General Manager of Loyalty, knows all about. Sephora’s Beauty Insider program is both a consumer and loyalty industry favorite, and is regularly referred to as a best-in-class example in the retail and ecommerce space.

As part of our ongoing series of podcasts in collaboration with Retail Dive, “Redefining Incentives”, we recently sat down with Emeline to learn more. Hosted by Talon.One’s Director of Industry Strategy, Sam Panzer, we wanted to better understand Sephora's unique approach to loyalty - including what sets their Beauty Insider Program apart, how the program is evolving, and what retailers can learn from Sephora’s approach to building both behavioral and emotional loyalty.

Listen to the full podcast episode here, or catch up on highlights from the episode below.

Emeline: One of our key differentiators is our ongoing commitment to providing exclusive and exciting perks for our clients. Examples of those are our annual birthday gifts, where clients can redeem points for product samples, or getting access to events and experiences. Because we have this very rich and vibrant program, we're able to attract new clients to it, and also really think about how we can be exciting for our Gen Z clients.

We are carrying these amazing brands that we know are very attractive to our Gen Z clients, like Rare Beauty for example, and we're able to make that connection between the brands that we carry and then the rewards in the program. An example right now is our Rare Beauty reward in the Rewards Bazaar, and we’re always changing out what’s available for redemption in there [The Beauty Insider Rewards Bazaar is where Sephora offers rewards in exchange for a certain number of accrued points ranging]. These are some of the ways that we're able to create an emotional connection with clients to ensure that they are really excited to shop and interact with Sephora.

Clients would complete certain actions that are part of the challenges, and with each action they completed, they earned Beauty Insider points with additional bonus points added when they completed all four challenges. We took a hybrid approach to creating the actions within the challenges, so that some that could be completed online and others in-store. We also made sure to have both transactional and non-transactional actions. For example, one of the actions was signing up to receive SMS communication from us and then to make sure that people were aware of all the great services that we have.

Since the launch last year, we've seen tremendous success. From our first two challenges we tripled the participation that we expected when originally forecasting. And we actually saw over 2 million new Beauty Insider signups participating in the challenges. 

Emeline: The building blocks of a loyalty program are about getting benefits from being part of a program and your interactions with that company. Offering access to discounts and promotions is really important, and that's why we make sure to tie Beauty Insider membership to those promotions.

But what’s also really important is the emotional component, so the member is excited to come back and continue their journey with Sephora. Because if you lean too much into the transactional part of the benefit, it becomes really easy to replicate in other places.

Our Rewards Bazaar is where we offer really unique brand experiences for Beauty Insider members and build excitement with our clients. Members can use their points to redeem deluxe samples, donate to our charity reward partners that change each month, and also participate in virtual beauty events with our brands. Another example of our unique experiences is our annual beauty event, SEPHORiA, which came back last year in a hybrid format with a live ticketed event in New York and a free global virtual experience in selected markets. Beauty Insider members could get special access to tickets because we knew how excited people were to be part of that experience. So we're always thinking about generating that kind of emotional excitement for our experiences that are uniquely at Sephora.