Sephora’s rewards program and product display may make you spend more money. These are other sneaky ways it gets your money.

  • Sephora has a massive following.
  • Members of the store’s rewards program have spent upwards of $35,000 to redeem exclusive members-only trips.
  • The store offers unique technology, Color IQ, to identify specific foundation shades to match customers to products.
  • Visit Business Insider’s homepage for more stories.

Following is a transcript of the video.

Narrator: Have you ever left Sephora with way more products than you intended to buy when you first stepped in the door? You’re probably not the only one. Sephora was named retailer of the year at the 2018 World Retail Congress. And it seems that people can’t get enough. Here are some sneaky ways you might not have noticed that Sephora gets you to spend more.

As soon as you walk into one of their locations, you’ll notice what makes Sephora different from the traditional department stores it competes with. Sephora has nearly all of their products on display, so customers can try just about everything. It’s great for the customers because they can test stuff out, but it’s equally great for the company because you’re in the store for longer, which means you’re more likely to buy more.

A 2015 study found that the likelihood of purchasing a product increases with time spent holding and looking at it in the store. The more time you spend trying out a product, the more it feels like it’s already in your possession and you need to purchase it.

Sephora also has kiosks stocked with makeup remover, tissues, and other necessities so customers can clean up, and, more importantly, so that they can try more products throughout the store. And if you’re not sure what to get, Sephora has even developed special technology to match customers with their perfect foundation shades. The device, called Color IQ, scans your skin to assign you a four-number code, which gives you a curated list of all the foundation shades from different brands that will best match your specific skin tone.

And if you’re not taking advantage of the samples, the shelves are also set up with an eye on your wallet. The most expensive products are placed on top shelves because they’re the easiest to reach, while cheaper items are on the bottom shelves. And, of course, the checkout line is surrounded with travel-size goodies to tempt you at the last minute.

Amanda Krause: So, when you’re up against the register lines and, you know, you’re kind of looking at all those mini products, you’ll find things that are maybe, you know, $5, $10, depending on what it is. And that can be enticing for a lot of reasons. Maybe there’s a primer you really wanna try but you don’t wanna spend $25 on the full size, so you can just get a smaller one for 10 bucks.

Narrator: But while the smaller products and their smaller price tags may seem like a good deal, they’re often not. Take, for example, the GlamGlow SuperMud mask. The full size costs a whopping $59. In comparison, the mini half-ounce jars for $25 seems like a steal. But in reality, the mini costs $50 per ounce, while the full-size jar comes out to about $35 per ounce. So if you’re looking to save money, the larger product is actually more cost-effective.

Another way Sephora gets customers to spend more is simply by being their go-to beauty store. They accomplish this by carrying a diverse array of brands, including ones that can’t be found anywhere else. The company often collaborates with brands to release limited-edition items, which not only draws customers in, but pressures them to purchase the products.

Krause: Sephora might have that one exclusive item that you can’t get anywhere else. So it really kind of draws people in because you never really know what you’re going to find there.

Narrator: Exclusive brands and items make it easy to keep coming back. More than anything, Sephora’s all about building brand loyalty. Case in point: their robust rewards program. According to the Harvard Business Review, reward programs not only encourage customer loyalty, but can also get new customers to shop like older, more profitable customers. And the longer a person has been a customer, the more profitable they become to the store and the less they cost to serve.

Sephora’s Beauty Insider program has three tiers, and anyone can sign up for the basic level. Members earn a point for every dollar they spend, as well as perks like a birthday gift and beauty classes. The highest, most coveted tier is Rouge, and you have to spend $1,000 in a calendar year to qualify. The exclusive benefits include significant discounts on all merchandise during Sephora’s sales and free two-day shipping year round.

Nico Reyes: So, I’ve actually been a Sephora shopper since about 2014. And only just recently, this past year, did I become a VIB Rouge.

Narrator: Sephora’s exclusive rewards for Rouge members include sponsored trips with cosmetics brands to New York City or Los Angeles, and some members have even spent more than $35,000 to rack up enough points to redeem on such trips. But is it worth the $1,000 to reach Rouge status?

Reyes: VIB Rouge has benefits that VIB doesn’t have, like early access to products, like invitations to, like, Sephora events, facials, whatever. If that’s something you’re interested in, then work towards it, sure. But if not, VIB is literally so similar. They’re so similar in terms of their benefits; I don’t think it’s worth it to actively try to spend $1,000 a year to reach that status.

Narrator: After all, both VIB and Rouge members have access to Sephora’s sales. Sephora definitely makes it easy to spend more, but finding good deals isn’t impossible.

Krause: Sephora constantly puts things on clearance, just maybe not at the forefront of the store. Keep an eye on the website, keep an eye on their social-media pages, like their Instagram, their Twitter, see what promotions are going on, and really just kind of focus on some of the sales and promotions that they do, because a lot of the times you can get equally good products for a little bit less money.

EDITOR’S NOTE: This video was originally published in August 2019.

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American sunscreens may not be as effective as European sunscreens. Here’s why.

Following is a transcript of the video.

Narrator: In 2017, researchers tested 20 best-selling US sunscreens. The good news is that 19 of them met FDA standards. The bad news? Nine of them didn’t meet European standards. Turns out, different countries have different rules for what makes a safe sunscreen and US sunscreens may not be protecting Americans as well as it could. When we lay in the sun, our skin absorbs two types of UV light. UVA and UVB rays. UVB light is higher energy and can cause sunburns while UVA penetrates deeper under the skin and can damage skin cells along the bottom layer of your epidermis.

Desai: We know that UVB rays are the rays that cause sunburns. But UVA rays are the rays that can actually cause skin cancer so you actually wanna cover the spectrum on both of those. I think a lot of people get into a misconception that I didn’t get sunburned so I’m not at prone to getting skin cancer which really isn’t true.

Narrator: The biggest concern with US sunscreen is how much protection you’re getting from cancer-causing UVA rays. For decades, FDA regulations required that sunscreens protect against UVB, but not necessarily against UVA. Meanwhile, rates for melanoma, a dangerous form of skin cancer, kept climbing in the US. Then, in 2012, the FDA updated its regulations on labeling and testing so that manufacturers must now let customers know if its sunscreen protects against both UVB and UVA. That’s what the broad spectrum label on your sunscreen means, for example. And while this is a good first step, there’s still no regulation on how much protection you’re getting from UVA. So, there’s no way to tell.

Desai: Here in the United States, I think we need to be cognizant of the fact that when a sunscreen says it’s broad spectrum, UVA- and UVB-protecting, that does mean you’re going to get protection against those rays. However, what it does not mean is that it’s going to block out all of the rays.

Narrator: And that’s where US sunscreens fall short.

Desai: And I will say that I do think we are behind other countries globally, particularly some of our European counterparts, in getting new sunscreen ingredients approved. Overall, there has not been much change in US sunscreen composition and what our sunscreens are made up of in the past several years.

Narrator: The FDA has approved 16 active ingredients that protect against UV radiation. But only some protect against both UVB and UVA rays. For comparison, Europe requires that all of its more than 20 active ingredients protect against both.

Desai: Right now, the American Academy of Dermatology and other organizations are really advocating with the FDA that they need to really speed up the approval process for new sunscreen ingredients. Because it’s with these ingredients that we can probably get even better coverage and better protection and maybe even get something that’s easier to apply, that’s easier on the skin, that doesn’t have any harmful side effects for patients.

Narrator: You can purchase sunscreens from other countries online. But if you plan on sticking with American sunscreens, look for the broad spectrum label and don’t buy anything below SPF 30.

Desai: The higher the SPF, definitely the better. But we definitely don’t want anyone going below a 30. And think about if you’re someone who has a history of a melanoma, if you use an SPF 30, you’re blocking out let’s say 98% of the harmful rays. However, what about the remaining 2%? That 2% may be something that could be potential of putting you at a risk down the road.

EDITOR’S NOTE: This video was originally published in November 2018.

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L’Oreal’s chief digital officer explains how the quick adoption of e-commerce saved the company’s 2020 earnings

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Lubomira Rochet speaks onstage during the Youtube session at the Cannes Lions Festival 2018 on June 19, 2018 in Cannes, France.

As vaccination programs across the globe begin to bite into the spread of Covid-19, retail businesses are starting to think about how they’re going to welcome back customers who have saved cash during the last year’s crisis.

One of the sectors looking for a new path out of the crisis is the cosmetics industry. While some sectors – like medicine, household cleaners and soap, and vitamins and supplements all saw increases in purchases during the pandemic, according to JP Morgan, the world cut back on cosmetics.

There are several reasons for this: as nationwide lockdowns have disrupted normal life, many people have been spending less time in front of others, and when they do, masks have made it impracticle to spend the same amount of time on facial cosmetics. Another reason is that the cosmetics industry traditionally relies on tangible, in-person sales. This is why staffed cosmetics counters are a staple of many department stores.

L’Oreal is one of the largest cosmetics companies in the world, and Lubomira Rochet – who made Insider’s list of 100 people transforming business in Europe last year – has been tasked with navigating the firm through the pandemic. Rochet is the firm’s chief digital officer, and based on widespread industry trends, the last 12 months should have been a sure-fire path to decreased profits for the company. Yet L’Oreal’s full-year financial results for 2020, published in late February, saw things staying steady.

“L’Oréal has traversed this crisis in the best possible condition and has even grown stronger,” Jean-Paul Agon, the company’s chairman and CEO, said when revealing the results. The reason? L’Oreal’s forward-looking bet on e-commerce sales. “Thanks to its strength in digital and e-commerce, which has again increased considerably during the crisis, L’Oréal has been able to maintain a close relationship with all its consumers and compensate to a large extent for the closure of points of sale,” added Agon. In all, e-commerce sales rose at L’Oreal by 62% in 2020, and accounted for one dollar in every four spent with the company.

The bumper results are the payoff for a decade of work. “The matter of fact is L’Oreal started its transformation 10 years ago which served us well when covid hit, because we were ready,” Rochet told Insider in mid-2020. The digitialization of the operating model for the company was crucial to making sure the firm managed to weather the crisis, but it was also one that Rochet had seen as a key area long before that.

“We spent a lot adapting our marketing to the digital age,” Rochet said. “Investing new formats and platforms from YouTube to TikTok to Instagram to WeChat, and really completely changing our formats for faster and more interactive formats. That has been quite a journey.”

But it’s the way that people tend to buy their makeup that has seen the most significant transformation. “We have invested in technology such as AR or VR to give [customers] an extra experience when they shop our products,” said Rochet. “Those are things like virtual make-up or hair colour try-ons. It’s about teleconsultations that were big during covid. Those are service we propose to our consumers to enrich the experience.”

Like many things, the coronavirus pandemic simply accelerated existing trends that had been in train for years. Rochet points to the rise of livestreaming sales in China as an example of how the pandemic has amplified what was already there, making it more important and significant for consumers battling the challenges of coronavirus.

And as stores and businesses begin to reopen, Rochet feels L’Oreal is in a position of power. “We’re moving to an interesting moment where more people in a low-touch economy don’t want to touch products in the store,” she explained. “They don’t want physical testers. So we’re introducing services like virtual make-up try on, through a QR code people can experience the colours and the looks, but virtually.”

It’s something her CEO and chairman also agrees with. Setting out 2020’s financial results, Agon looked forward to 2021 with positivity. “Driven by the strength of its strategic choices and a determined dynamic across the year, L’Oréal has adapted to this unprecedented context and terrible pandemic with speed and agility, accelerated all of its transformations and will emerge stronger,” he said.

“At the beginning of this new year, which remains marked by uncertainty regarding the evolution of the pandemic, but also by consumer’s appetite for beauty that remains intact across the world, we are confident in our capacity to outperform the market again this year and, subject to the evolution of the sanitary crisis, achieve a year of growth in sales and profits.”

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Ulta Beauty tumbles as profit outlook disappoints and CEO Dillon plans to step down

ulta
  • Ulta Beauty dropped nearly 9% on Friday following quarterly earnings the prior evening.
  • Ulta’s earnings-per-share view of $8.85 to $9.30 fell short of Wall Street’s target of $10.61.
  • CEO Mary Dillion will transition to the role of the board’s executive chair.
  • See more stories on Insider’s business page.

Ulta Beauty shares were knocked sharply lower on Friday after the cosmetics retailer’s yearly earnings guidance missed Wall Street’s target. The company also said CEO Mary Dillon will step down from the top role.

The company late Thursday forecast fiscal 2021 per-share earnings of $8.85 to $9.30, which includes the impact of about $850 million in share buybacks. Analysts were looking for earnings of $10.61 per share, according to data compiled by Refinitiv. Ulta’s revenue forecast was $7.2 billion to $7.3 billion, below the average analyst forecast of $7.32 billion.

The company in a separate announcement said Dillon will transition to the role of executive chair of its board of directors, with President Dave Kimbell to succeed her as CEO.

Shares dropped 8.5% to close at $318.15. They fell by as much as 12% to an intraday low of $306.06. The stock has gained about 11% this year and has climbed by 54% over the past 12 months.

“Throughout my time with the company, I have worked closely with our board on strategic succession plans, and I believe now is the right time to begin a CEO transition,” said Dillon in the statement, noting that she had led the company for eight years. Kimbell joined Ulta Beauty as chief marketing officer in 2014.

For the fourth quarter ended January 30, Ulta posted adjusted earnings were $3.41 per share, down from $3.83 per share a year ago but higher than expectations of $2.35 per share. Revenue of $2.2 billion was ahead of Wall Street’s projection of $2.08 billion but down from $2.31 billion a year earlier.

Dillon will be nominated to stand for election to the company’s board of directors at its 2021 annual stockholders meeting to be held on June 2.

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Ulta Beauty tumbles 11% as profit outlook disappoints and CEO Dillon plans to step down

ulta
  • Ulta Beauty dropped 11% on Friday following quarterly earnings the prior evening.
  • Ulta’s earnings-per-share view of $8.85 to $9.30 fell short of Wall Street’s target of $10.61.
  • CEO Mary Dillion will transition to the role of the board’s executive chair.
  • See more stories on Insider’s business page.

Ulta Beauty shares were knocked sharply lower on Friday after the cosmetics retailer’s yearly earnings guidance missed Wall Street’s target. The company also said CEO Mary Dillon will step down from the top role.

The company late Thursday forecast fiscal 2021 per-share earnings of $8.85 to $9.30, which includes the impact of about $850 million in share buybacks. Analysts were looking for earnings of $10.61 per share, according to data compiled by Refinitiv. Ulta’s revenue forecast was $7.2 billion to $7.3 billion, below the average analyst forecast of $7.32 billion.

The company in a separate announcement said Dillon will transition to the role of executive chair of its board of directors, with President Dave Kimbell to succeed her as CEO.

Shares dropped 11% to a low of $308.32 as trading in the regular session got underway. The stock had gained 21% so far in 2021 and has climbed by nearly 68% over the past 12 months.

“Throughout my time with the company, I have worked closely with our board on strategic succession plans, and I believe now is the right time to begin a CEO transition,” said Dillion in the statement, noting that she had led the company for eight years. Kimbell joined Ulta Beauty as chief marketing officer in 2014.

For the fourth quarter ended January 30, Ulta posted adjusted earnings were $3.41 per share, down from $3.83 per share a year ago but higher than expectations of $2.35 per share. Revenue of $2.2 billion was ahead of Wall Street’s projection of $2.08 billion but down from $2.31 billion a year earlier.

Dillon will be nominated to stand for election to the company’s board of directors at its 2021 annual stockholders meeting to be held on June 2.

Screen Shot 2021 03 12 at 8.24.40 AM
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Coty drops 19% as quarterly revenue misses Wall Street expectations

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  • Coty stock fell as much as 19% on Tuesday after reporting second-quarter earnings.
  • Second-quarter revenue of $1.42 billion missed Wall Street’s estimate of $1.43 billion.
  • Adjusted earnings of $0.17 per share were better than analysts had expected.
  • Visit the Business section of Insider for more stories.

Coty dropped by as much as 19% on Tuesday after quarterly revenue fell shy of Wall Street’s targets as the ongoing COVID-19 pandemic hurt sales of makeup.

The beauty products maker, whose portfolio includes brands such as Cover Girl, Rimmel and Kylie Skin, posted fiscal second-quarter net revenue of $1.42 billion, down 16% from $1.68 billion a year ago. Analysts had expected revenue of $1.43 billion.

Coty’s stock hit an intraday low of $6.47, marking an 19% decline from Monday’s closing price. So far in 2021, the stock has lost more than 7% and has slid by 45% over the past 12 months.

The company said its cosmetics and fragrance categories within its mass-beauty business “remained pressured” during the second quarter as the number of coronavirus cases ramped up in parts of the US, “impacting both store traffic and make-up usage occasions.”

But Coty noted that it saw further strength from its prestige fragrances in the US, with the Marc Jacobs, Gucci, and Burberry brands “delivering robust growth” in the quarter ended December 31.

Adjusted earnings were $0.17 per share, higher than Wall Street’s consensus estimate of $0.07 per share but lower than $0.27 per share in the same period in 2019.

Coty said it will begin raising its commercial investments to bolster improvements ahead of fiscal year 2022 despite “continued disruptions” to its sales channels and short-term orders related to the pandemic.

Read more: An ex-Merrill Lynch ETF maven shares how to construct a portfolio that’s perfect for today’s market landscape – including 4 must-have sectors for sustainable returns

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