The French brand, Sephora, is a multinational retailer that offers personal care and beauty products that include cosmetics, skincare, body, fragrance, nail color, beauty tools, body lotions, and hair care. The unique brand name, Sephora, is adopted from the Greek word ‘sephos’, meaning beauty, and the Greek spelling of Zipporah, the wife of Moses.
Founded in the year 1969 in Limoges, France, as a perfume shop, Sephora first launched in Paris a year later, in 1970. Dominique Mandonnaud acquired Sephora in 1993 and proceeded to merge his own chain of fragrances with the Sephora brand. It was he, who designed and implemented the unique ‘assisted self-service’ sales gimmick, a new approach in the then cosmetics market service-based retail approach. This model encouraged customers to test the products at the retail stores before actually purchasing them. Under his leadership, the brand expanded and opened its flagship store in 1997 at Champs Elysees. In the same year in July, Mandonnaud parted ways and sold Sephora to the LVMH (Moet Hennessy Louis Vuitton) Group.
The Growth
The LVMH Group expanded Sephora globally while simultaneously also broadening the brand’s product repertoire to include beauty and cosmetic products. It extended its Middle Eastern market presence in the year 2007, opening 44 stores in UAE and KSA. The brand operates more than 430 stores across North America. In the year 2017, it opened its largest retail store in New York City. A year later, in 2018, Sephora signed a long-term lease at Thor Equities’ Town Square Metepec, which is a retail and entertainment center in Mexico. December 2020 saw Sephora announcing its plans to launch Sephora inside 850 Kohl locations by the year 2023. In the year 2021, it agreed to purchase Feelunique.com for a rumored amount of 132 million pounds. Feelunique.com is an online retailer of luxury beauty goods and boasts 1.3 million active customers spread across 120 countries. It features more than 800 brands selling more than 35,000 products.
The Brand that Revolutionized Make-up Consumption
With a presence in more than 35 countries, Sephora currently operates more than 2700 stores and is a 36,000-strong workforce brand, selling over 250 beauty brands. Its rise to a prominent industry leader is due to its smart and strategically profitable business practices. A study of the brand’s business practices reveals that it can be categorized into three main approaches.
Vast Choice of Beauty Products
Being a part of the LVMH Group means that several cosmetics brands sold within Sephora stores are owned by the LVMH Group. Sephora also has its exclusive product line. The retailer giant’s popularity has made it a prime choice for high-end cosmetic brands, resulting in Sephora’s market leadership. A customer walking into a Sephora store can find a vast range of beauty products to choose from, making it the store of choice. This has also resulted in Sephora having a loyal customer base as well as influencer marketing videos sharing the products bought by them from Sephora.
The traditional sales practice of the cosmetics industry was a brand sales representative behind the counter helping customers make purchases. Sephora disrupted this practice with its new and unique ‘assisted self-service’ encouraging customers to try the products which were openly displayed in the store. Beauty Advisors were present and ready to help if asked. Secondly, the product display within the store was category based rather than brand based, contrary to convention. This meant that all make-up items were grouped next to each other, whereas a skin-care product from the same brand would be stocked in the skin-care aisle. The cosmetics retailer giant-built trust amongst its customers with its brand-agnostic attitude.
Loyalty Program
In the year 2007, Sephora initiated a customer loyalty program named ‘The Beauty Insider’, to offer a sense of exclusivity to their customers. Two years later, in 2009, a second layer named ‘Very Important Beauty Insider’ (VIB) was added to the program and again in 2013 a third layer was added called ‘The Rouge Tier’. This free loyalty program is only for their customers in USA and Canada. This three-tier program has a distinct set of incentives attached to each tier. It allows customers to earn points on every dollar they spent at Sephora. Also based on the membership tier, customers have access to exclusive events. This loyalty program is updated from time to time for relevancy and to offer better benefits to its customers.
Of course, Sephora reaps benefits from the data it gathers from the loyalty program about its customers buying patterns and product preferences. This data is analyzed and used later for personal marketing.
Sephora – Card Program
Brand Inclusivity
Sephora, as a brand, takes inclusivity seriously when referring to its customer base. With newer cosmetics brands coming to the market every day, Sephora has been conscious about filling its product shelf space with black-owned brands. The retailer has also been proactively asking its member brands to expand their product line and include products that suit customers from different racial backgrounds and ethnicities. Sephora also launched ‘Color IQ’, a technology that helps their customers to select cosmetic products that suit their skin tone most naturally.
Sephora Color IQ
Conclusion
Being a part of the large conglomerate, LVMH, allows Sephora the advantage of quickly jumping on trends within the cosmetics industry. A Sephora spokesperson articulated Sephora’s ideology aptly and said – “We want to be an unequivocal global leader in the Prestige Beauty space and a purpose-driven brand that is a transformative opportunity for everyone we touch.”
FAQs
What makes Sephora different from other brands?
Sephora concentrates on higher-end products instead of selling drugstore products. The company also offers promotional prices for their loyal customers in the form of discounts and incentives.
What are the levels of membership in Sephora?
There are three levels of membership: Insider, VIB and Rouge. Achieving VIB or Rouge membership requires a minimum spend per year. All membership levels enjoy a variety of benefits made available by Sephora.
Do they do your makeup for free at Sephora?
If you visit a Sephora store in-person, you can take advantage of a free 15- to 20-minute makeover done by a beauty expert with no purchase required and no appointment necessary.
Is it free to be a member of Sephora?
It’s a free loyalty program for customers in the US and Canada that allows customers to earn points on every purchase.
Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by Xoxoday.
The Global Rewards and Recognition industry stands at around USD 300Bn. Of which, Xoxoday is targeting around 1% market share. Founded by Manoj Agarwal, Sumit Khandelwal, Abhishek Kumar, and Kushal Agarwal, Xoxoday enables real-time, digital global rewards which are linked to a client’s business KPIs. These rewards increase employee engagement, improve channel performance, enhance sales performance & more.
It is interesting to note that Xoxoday is currently growing at a rate of 100% YoY in terms of revenue. No wonder, its clientele includes some of the notable companies like Infosys, HCL, SAP SuccessFactors, Siemens and more.
StartupTalky interviewed the founding team of Xoxoday to know its Success Story. In this post, you will know all about Xoxoday Growth Story, Revenue Model, Funding, How it started & more.
Xoxoday provides technology infrastructure to enable rewards & recognition for global clients. The company enables real-time, digital global rewards which are linked to a client’s business KPIs. These rewards increase employee engagement, improve channel performance, enhance sales performance and build brand loyalty/retention for their clients.
Key Use Cases:
Employee Rewards & Recognition
Sales & Channel Incentives
Consumer Rewards. The products are enabled through In-app integrations (with CRM, ERP, HRMS, Survey Portals, Gaming Portals)
According to industry estimates, the company is targeting around 1% market share in around US$ 300Bn rewards and recognition industry globally. The R&R industry is divided into:
Consumer acquisition, retention and loyalty (US$ 200 Bn) – Drive consumer demand in the sales funnel to improve ARPU, loyalty & new customer growth.
This space is seeing a lot of traction in terms of funding, M&A, and consolidation and is ripe for exponential growth in the coming future. Xoxoday is poised to take advantage of this growth by solving the key customer pain points through technology, continuous innovation, and expanding its geographical footprint through organic and inorganic growth.
“We met each other (4 founders), through common friends and family circles. We were passionate, young individuals with varied backgrounds who wanted to build a great organization” says the Xoxoday founding team.
The company has around 175 employees mostly located in Bangalore, Delhi, Mumbai, Dublin & USA. The team is young and very stable. There are a lot of employees who are entrepreneurs before joining Xoxoday. There are a good number of people from premier colleges like IIT & IIM. The company has a very good working culture and that reflects in the low attrition rate in the company.
Manoj Agarwal
With 15+ years of experience in technology, product and marketing with companies like Yahoo, Flipkart & Manipal education and health, Manoj takes care of the product, marketing, customer service, and process automation at Xoxoday. An MBA IIM Kozhikode and a Computer Science BTech from PEC Chandigarh, this co-founder’s Hobbies & Interests include yoga, fitness, reading, family time.
Sumit Khandelwal
Khandelwal possesses over 14 years of experience in sales and marketing in companies like Hexaware, Wipro Consumer, Metro Cash & Carry. He is an MBA from TAPMI and an engineer from NIT Nagpur whose hobbies and interests include bike riding, reading, and running. Sumit leads finance and international sales at Xoxoday.
Abhishek Kumar
Abhishek Kumar brings in 13+ years of experience in engineering and technology and has previously worked with companies like Manhattan Associates and Nettpositive. Kumar has a BTech degree from IIT Bombay and his hobbies and interests include painting, travelling, and technology. At Xoxoday, Abhishek leads engineering and technology. Abhishek Kumar co-founded Evening Flavors and Prodintel Technologies.
Kushal Agarwal
Kushal Agarwal leads India sales for Xoxoday. Agarwal has 8+ years of experience working withBidco-Oil refineries, and has represented India in Mongol Rally and the Great Nile River Ride. Agarwal has a Btech degree in Electronics and has then opted for PGDM in Management from the Welingkar Institute of Management. Agarwal currently is the Co-founder of Xoxoday along with being co-founders of Empuls and Compass AI. His interests include travelling, car rallies, storytelling, etc.
Xoxoday is currently working with a 270+ member strong team.
The founders, Manoj and Sumit come from business families. Manoj also comes from great entrepreneur mindset companies like Yahoo & Flipkart. Both these factors gave the team a lot of initial confidence in the startup.
We also found a big gap in the market and a good business opportunity in the rewards and motivation technology business – says the team
The founders validated the idea with their existing contacts in the corporate world. Once they were confident of providing value to their customers, Xoxoday started reaching out to other companies. It acquired around 30 new clients in the first few months which was a great validation of the product-market fit.
Xoxoday – Mission and Vision
Vision
Xoxoday brings simplicity and continuity to a complex, everyday problem of human motivation.
Mission
Xoxoday’s mission is to put human motivation at the center of business growth through technology
Xoxoday – Products and USP
Xoxoday, technology products solve the following use cases in the rewards and incentives space.
Employee Rewards and Incentives
Sales and Channel Incentives
Consumer Rewards
To address the above, Xoxoday has come up with 3 products with differentiated offerings catering to each use case. These products are called: Plum, Empuls and Compass.
Plum – Transactional Reward Platform
Plum is an API-based, real-time pay-as-you-go transactional reward platform. Plum helps drive behaviours that power business results with engaging rewards including gift cards, experiences, discounts, merchandise, & more. The platform can be used to reward employees, consumers, and channel partners. Plum integrates with over 100+ platforms like HRIS (Darwinbox, Bamboo HR), CRMs (FreshDesk, Zoho), ERPs (SAP), Survey platforms (Survey Monkey, Typeform), collaboration tools (Zappier, Marketo), and more.
Xoxoday Plum logo
Empuls – Employee Engagement Platform
Empuls helps improve employee productivity, performance & retention with an easy to use engagement application. Empuls is a holistic employee engagement platform. The platform helps build and drive company culture and ethos in the organization. This helps drive employee engagement, motivation, and overall culture in the organization. A strong culture is extremely important during these times when 90% of the employees are not working from the office.
Compass is a sales and channel partner gamification software to increase sales achievement. Compass integrates with the existing ERP platform of the client and lets the user create sales campaigns. These campaigns are monitored on a real-time basis providing real-time feedback to increase sales. The platform can gamify the sales target achievement based on product lines, geographies, special sales events as per the company sales strategy.
Xoxoday – Compass
Key USPs of the solutions:
Easy to set up, use and scalable tech platform (with open APIs, integrations with 100+ apps)
Largest and most diversified reward catalog in the industry – over 120+ countries covered and over 20+ categories covered.
Over 100+ app integrations like Survey Monkey, Freshdesk, SAP, Darwinbox, Zapier, Slack, Microsoft Teams, and more.
Modern UI & UX
Idea Pivot:
Xoxoday started in 2012 but did a pivot in 2018. From 2012 to 2017, they were doing experiences and activities business in India. Similar to a Klook/Getyourguide or Viator.
“While doing this business we found that we are ahead of the market as both the supply and demand were premature in India. They still are premature. However, we were selling these experiences/activities to corporates as rewards and gifts. In 2018, we extended the rewards business into a full stack technology company covering different reward use cases for employees, channel partners, sales team, and consumers. Since 2018, we have been growing very well” the team adds.
XOXO – means Hugs and Kisses in chats. So basically, Xoxoday means love and happiness every day.
At Xoxoday, the team deeply understands the intrinsic and extrinsic motivation and engagement drivers of people, be it an employee, sales, channel partner, gig worker, or consumer. It brings simplicity and continuity to a complex, everyday problem of human motivation. It brings love and happiness in the lives of employees, sales and channel partners of its clients every day.
“Make every day rewarding,” says the tagline of Xoxoday.
Xoxoday Logo
The logo is bright orange showing energy and happiness and the connotation with “day”, just like the colour of sunrise.
Xoxoday – Business Model and Revenue Model
The revenue model is pay-as-you-go SaaS. It is similar to pricing models of payment companies like Stripe and communication companies like Twilio. Xoxoday’s Revenue model has 2 components: Commission on transactional reward revenue and Platform software fees.
Xoxoday – Startup Launch and User Acquisition
Initially, the team reached out to their contacts in the corporate world. “We requested them to give our services a try. Once we were confident of providing value to our customers, we started reaching out to other companies” says the team.
The initial set of customers was acquired through common connections, customer referrals, and organic marketing initiatives. These customers then helped Xoxoday with more referrals. Xoxoday’s product quality has been a big winner. It has built the product with quality UI/UX, modern outlook and built for the users with extensive primary research.
“We keep listening to our customers and improve the products every month” Xoxoday team added.
Xoxoday’s customer success team also has been doing very well by working with clients as partners and helping them succeed in their business metrics through its products. These two things have helped Xoxoday the best!
“Getting the right marketing mix has been a challenge. How can you build the right lead generation mechanism without shelling out a lot of marketing dollars. We experimented with various marketing tactics and hacks to overcome it.”
Xoxoday – Funding and Investors
Xoxoday raised total funding of USD 4,20,000 prior to pivoting in 2018. The startup recently was funded by Giift And Apis Partners LLP on February 23, 2022, when it was successful in raising $30 mn.
Xoxoday’s funding details are as follows:
Date
Stage
Amount
Investors
February 23, 2022
Private Equity Round
$30 mn
Giift And Apis Partners LLP
June 5, 2021
Seed Round
–
–
August 2016
Seed Round (For experience business)
$300K
Mahindra Holidays
July 2013
Angel Round
$120K
Kshatriya Ventures
Xoxoday is almost EBITDA zero and only spent for growth.
Xoxoday – Acquisitions
Xoxoday has acquired 4 companies to date. Here’s taking a look at its acquisitions:
Companies Acquired
Date of Acquisition
Amount
FamousEnuf
January 7, 2019
–
BookMyInterest
June 13, 2016
–
Actizone
January 27, 2016
–
Yipeedo
October 15, 2015
–
Xoxoday – Marketing Strategies
Xoxoday has done a lot of marketing hacks across its journey.Partnerships marketing has worked very well for the brand. The company has done various marketing campaigns with its integration partners which have been a win-win for both parties. High-quality content along with SEO has been another strategy that worked very well for Xoxoday.
Shreesha Ramdas has been the advisor/mentor of Xoxoday. He is an entrepreneurial executive with a track record of launching and growing products in competitive markets.
Xoxoday – Competitors
Tango card, Tillo, Blackhawk Network, Wegift, Workstride, Sendoso, Bonusly, Perkbox are some of the competitors of Xoxoday.
G2 crowd best rewards software in 2020 APAC region
DigitalHR award
Oracle top 50 startups in 2018
Ranked #20th in Deloitte Technology Fast 50 Award 2020 in India
Xoxoday Ranked #20th in Deloitte Technology Fast 50 Award 2020 in India
Key Players in Gamification Industry
Key Players Landscape in Channel Incentives space by Forrester
Case study published by Harvard Business Review HBR
Top 15 employee recognition platform 2021
Xoxoday – Future Plans
International Expansion – Increase presence in US, Europe and SEA markets
Product Innovation – See product roadmap below.
Xoxoday Product Roadmap
Xoxoday – FAQs
What is Xoxoday?
Xoxoday is a Bengaluru-based full-stack embedded solution company that helps businesses automate rewards, benefits, incentives and payouts and get the most out of them with modern, cutting-edge infrastructure and technology.
When is Xoxoday founded?
Xoxoday was founded on April 2, 2012.
What are the subsidiaries of Xoxoday?
The Xoxoday subsidiaries include Plum, empuls, and Compass.
What is the Xoxoday revenue?
The Bengaluru-based Saas startup was founded back in 2012 and has already crossed the 100 crore mark between the fiscal years 2018 and 2019.
You must have seen many companies which give you an option to buy their “premium memberships”. However, every company calls it with another name for their VIP plans like “Amazon Prime”, “Zomato Gold”, etc. These are customer loyalty programs that reward customers and encourage them to bear additional purchases. There is a series of reasons to do that. Such customer loyalty cards increase sales without compromising marketing budget. Here is why you should provide membership perks.
According to some report success rate of selling existing customer is 60-70% but at the same time, the success rate of selling new customer is 5-20%. Hence, you should focus more on your existing customers to generate higher profit with low cost marketing. In this post, we are going to reveal them all and help you decide whether you should also have VIP memberships or not and how to create A VIP Program for your small business.
When people buy VIP membership in your service, they feel special. It is because, of course, you will provide some special service to your VIP members. If you have a restaurant, you can provide free home delivery, special booking, special treatment, etc. to your VIP customers. It will make them feel different and special.
Permanent Customer
When people will feel special, they will end up becoming your permanent customers. Also, if they have a VIP membership, they will come to you, at least till they have their VIP membership is valid. Moreover, if you can initiate the automatic renewal of their membership, it will be great for your business. I hate Amazon Prime but I still don’t quit it’s membership because I think Rs. 120/month is not a big deal and I don’t have to pay manually its fully automated system.
Reward System
Reward System
You can provide a reward system in your VIP membership. You can give them points on buying something particular or discount on bringing another VIP member. Furthermore, you can test your new service or product by providing points to the VIP members on using it. You can ask for their reviews and make changes accordingly. Moreover, provide points on a particular number of purchases, it will increase your sales.
Increase User Base
As people will share their code and bring you more people to get rewards, you will acquire more customers. It will eventually increase your sales. However, please don’t overdo it if you don’t have enough funds. Customer loyalty program ideas help a lot in building your customer base.
VIP Cards
VIP CARD
If you provide customer loyalty cards to your VIP members, it will be great for marketing. Most of the humans are social animals, and they like to show off. Most of your VIP members will show their VIP cards off to others. It will be great for your marketing. Also, when your VIP member will see their VIP card, it will remind them about your service. They are more likely to come to you if they see something related to you again and again.
Customer Loyalty
I’m not buying Netflix’s subscription only because I already have Prime’s. Even though I know Netflix is much better and I hate Prime, I use Prime. It is because, somewhere in my subconscious mind, I have become loyal to it. I don’t want to hassle again to register and buying some other service.
In one or the other way, Prime has made me a loyal customer. Just like me, other people will become your loyal customer and will think a lot before going to another service. And after thinking a lot, if they are lazy like me, they will end up compromising. Unless you give a terrible service, they will be your loyal customers.
Exclusive Sales
You can provide exclusive access to your new product to your VIP members. It will make them feel more special as only they will have that product. Also, you don’t have to worry about the stock. It will be out if your customers are loyal enough. However, analyze your customers first and provide a good exclusive product or service.
If you have a restaurant and exclusively selling a new phone, it will be disastrous, because people come to you for food. Or if your exclusive product is out of fashion as if you are exclusively selling a feature phone or even an old-style smartphone (with bezels), no one’s gonna buy it.
Customers always trust more on their peers and they love to engage with them. Thus VIP Membership program will give you an opportunity to build a community forum where people can share their positive or negative feedback on the same platform. It will help you to make your product or services better.
Should You Provide VIP Membership?
Membership Tier
Although VIP membership is great to have in your business, it depends on the nature of your business. If you have a car showroom, there is no point in giving VIP memberships because people don’t buy cars every day or every month. Whereas, if you have a grocery store, you can provide VIP membership with services like free home delivery and that the customer can give you their grocery list so that they don’t have to waste their time in choosing their stuff, etc. This was just an example. Create your ideas and use them in your VIP memberships.
However, I don’t have to repeat the points of importance but VIP membership work. Your customers cannot go to your competitors until their VIP membership get invalid. Please check your service’s nature if it is compatible with VIP membership or not. Also, you can even lose your other “non-VIP” members if you give stupid service in your VIP membership. Think a lot and then decide on every aspect of your business. Consider it your baby, because it is. Your business is not just your effort, many people, directly or indirectly helped you a lot. So take every step carefully. Do you have a VIP membership to any service? Please comment down below. Also, share this post with all your friends.
Megha Rani
