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Sephora changes its positioning strategy in Brazil and reduces prices

The world’s largest multi-brand cosmetics retailer, Sephora arrived in Brazil in 2012, causing great excitement among consumers who were avid for new and imported products. Ever since, the French company has inaugurated 14 stores in the country, distributed throughout the states of Sao Paulo, Rio de Janeiro, Parana and the capital city, Brasilia. But unlike what happens in other parts of the world, where the brand is considered “democratic”, in Brazil it has become known as expensive and unaffordable for much of the population.

Sephora Collection range

Sephora Collection range

In fact, the prices practiced on the Brazilian market are not similar to those charged abroad. A survey carried out in October in Sephora’s online stores showed that the same Clinique nail polish is sold for R$ 59 in Brazil and for around R$ 30 in the US. A Sephora Collection nail polish that, in France, is priced at the equivalent of R$ 15, costs nearly double (R$ 29) on the Brazilian website.

This difference in figures is due to a number of factors – Brazil’s high taxes, import duties that can be over 70%, infrastructure problems that make freight more costly, and also the so-called “Brazil Profit”: the profit margins applied in the country are higher than those of Europe and the US.

To try and revert the elitist image it has acquired, Sephora decided to change its positioning strategy. It began by reducing prices of products of its own range of cosmetics and accessories imported from France, the Sephora Collection. With discounts of around 50% and prices starting at only R$ 8 (such as the Fizzing Bath Cube), the brand expects that customers will change their perception of the retailer.

The Rouge Cream Lipstick has been reduced from R$ 59 to R$ 39, the Supreme Cleansing Foam from R$ 67 to R$ 49, and the Smart Dual Action Exfoliating Cleanser from R$ 95 to R$ 69. Rebranding was only possible by decreasing the profit margins and the expectation is that rewards will be seen in the long term, with the increase in sales.

Full Action Extreme Effect Mascara

Full Action Extreme Effect Mascara

With this in mind, Sephora also hopes to compete directly with the big names in beauty products, like O Boticário and Natura. The idea is that clients can purchase high quality imported products for the same prices as similar national products. For the purpose of comparison, Sephora’s Full Action Extreme Effect Mascara now retails at R$ 59, while O Boticário’s Make B. Extra Volume Mascara costs R$ 59.90 and Natura’s Una Extra Volume Mascara retails at $59.80.

Sephora’s new pricing strategy has also led to changes in its payment terms. Now purchases over R$ 180 can be paid over six installments in retail outlets. On the website, payments made by credit card can be repaid in up to ten installments of as little as R$ 10.

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© 2014 - Brazil Beauty News - www.brazilbeautynews.com

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