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Sephora’s Future Focus, With CEO Martin Brok – WWD

On a recent bright fall afternoon, a small crowd congregated outside the Sephora flagship on Paris’ Avenue des Champs-Élysées. Spanning the store’s entry, in gold letters writ large, was: “Sharing is beautiful.”

Young people sporting Beauty Team Sephora shirts and red face masks fist bumped and spoke animatedly with a new arrival. Their easy demeanor showed that the tall, suited man was very much one of theirs as they chatted with him — Martin Brok, president and chief executive officer of Sephora — above the booming, thumping strains of Queen’s “We Will Rock You.”

The song was apropos. Its message channeled key tenets of the world’s leading omnichannel prestige beauty seller’s strategy as it enters a new phase of development in an increasingly competitive, shifting global retail landscape. This year alone, Sephora partnered with Kohl’s, the midtier U.S. department store to open 200 shops-in-shop by yearend and 850 by 2023. It made a deal with the fashion and lifestyle e-commerce site Zalando in Germany and purchased Feelunique, the prestige beauty e-tailer in the U.K.

“We’re disruptors,” said Brok, during his first in-depth interview since taking the top job in September 2020. “By disruptors, that really means innovators,” he continued, speaking from his light-filled corner office in the Paris suburb of Neuilly-sur-Seine that has sweeping views of La Défense. “We disrupt and innovate with one eye on growing the prestige beauty pie, which is important for all the brands that we work with, and one eye on serving the consumer better than anybody else.”

The goal: Nothing short of world domination. Among Brok’s missions is to more effectively leverage Sephora’s global scale, so ideas can be reapplied around the world at a much more rapid clip, while the retailer continues building the most loved beauty community, and drives culture and trends. “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,” Brok said. “For customers, it is to empower them through beauty and help them to fearlessly discover the best version of themselves and serve them better than anybody else wherever, whenever and on any device.”

For brands, that means enabling them to expand and grow at a worldwide level, while for the Sephora team, the vision is to enable everyone to grow and learn to achieve their potential.

Although this is his first time in beauty, Brok, who was previously the president of EMEA for Starbucks, was no stranger to Sephora. “My love affair with Sephora started way before I even had the first interview,” he said. Brok noted that when he was at Nike in the late Aughts, that company was transforming from a wholesale business into a direct-to-consumer business, with a sharp point in the digital space.

“One of the companies we looked to for inspiration was Sephora,” he said. “So here we are, full circle — and I have not looked back.” (Although post-Starbucks, Brok has endeavored to kick a 10-cups-a-day coffee habit, which started with a Skinny Cappuccino and was followed by Pike Place and a double macchiato.)

The executive has assumed leadership at a pivotal moment for Sephora — and the entire industry. As the coronavirus pandemic raged, leaving most of Sephora’s 2,700 stores in 36 countries temporarily closed, the competitive landscape shifted, too, with Ulta Beauty unveiling its own partnership with Target in the U.S. and e-commerce player The Hut Group snapping up the hot digital retailer Cult Beauty in the U.K. In China, young consumers embraced livestream shopping, and all around the world, people are better educated about products and brands than at any other moment in history.

Brok himself is squarely focused on what makes Sephora most powerful — its culture, values and purpose. “What we’re doing now is twofold. With all the changes that have taken place, now’s the time to peel the onion a little further…to get at the core and this fine-textured detail of what the DNA is really all about,” he said. The second component is making sure the group’s DNA is perceived as valid in today’s world, which involves a new retail ecosystem of stores, dot-coms and platforms, and a consumer journey that starts and ends on the mobile phone.

“If the strength of Sephora is to serve a broad range of consumers given our unique service and product selection around the world, we will continue to focus on Gen Z to keep bringing new consumers into the world of beauty, meeting them where they are in their digital and physical journeys,” Brok said.

Martin Brok in Sephora’s Champs-Élysées flagship.

Martin Brok in Sephora’s Champs-Élysées flagship.
Julien Faure/WWD

His training ground — with some of the world’s most powerful brands — has prepared him well. Brok started his career at The Coca-Cola Co. as an account executive before moving to Burger King Corp. in various leadership roles. In 2007, he joined Nike Inc. rising to chief operating officer of direct-to-consumer and vice president of product and merchandising operations and analytics. From food to footwear, Brok described the common thread of each company as being “consumer-obsessed” and “innovative” with a growth mind-set.

Brok’s approach to business and branding is consumer-centric, with his past jobs giving him a transferable, international view of running businesses from a regional, country and global perspective. “As we write the new era for Sephora, it’s bringing all those experiences to bear,” said Brok, noting the world is increasingly full of ever more discerning consumers. “I see that in my kids; they vote who they do business with. They vote by who they boycott as a brand,” he said. “The notion of being a responsible brand is really important. Being a purpose-driven brand is super important.”

Brok came into Sephora in its 50th year. The retailer was founded by the visionary Dominique Mandonnaud, who was the great emancipator of beauty retailing and an early champion of assisted self-service. (As part of his delving into Sephora’s DNA, Brok plans to meet with Mandonnaud for a chat.) The retailer has largely gone from strength to strength, and clocked an incredible track record, particularly over the past decade, when sales almost quadrupled under the leadership of Chris de Lapuente, who remains chairman of Sephora while overseeing parent company LVMH Moët Hennessy Louis Vuitton’s selective retail activity.

Sephora generates by far the most business within the Selective Retail division, which in the first nine months of 2021 rang up sales of 7.8 billion euros, making it the largest branch at LVMH following the Fashion and Leather Goods division, with revenues of 21.32 billion euros. “[Sephora] is a major engine of growth, and it’s been growing,” de Lapuente said. “The last 10 years, it’s been growing double-digit on average every single year.”

Neither Brok nor de Lapuente revealed sales figures, but industry sources estimate that Sephora will generate 9 billion euros in sales this year, versus 7 billion euros in 2020 and 9.5 billion euros in 2019.

Sephora’s pole position in the prestige beauty retail space worldwide is firm, but in the retail race in individual countries, there’s ample competition that shows no signs of slowing. De Lapuente and LVMH leadership are looking for Brok to help Sephora pull ahead. “We met Martin and felt he had what it takes to take us to the next level,” de Lapuente said.

At the top of Brok’s to-do list is improving Sephora’s standing in three key global markets: Germany, the U.K. and China. “While Sephora is tremendously successful, if it has ambitions — which it does — to be the world’s leading beauty retailer, you can’t really validate that claim without having a fairly good presence in the U.K. and Germany, simply because those are two of the most advanced beauty markets within Europe. And Europe is a very important market for beauty,” said Neil Saunders, managing director and retail analyst at data intelligence firm GlobalData Retail. “On top of that, you have to have a pretty solid presence in China.

“That is a big part of Sephora’s future playbook,” he said. “They want to crack those three markets and more to generate growth, but also to really become a true global powerhouse.”

That may be easier said than done. Saunder noted beauty’s resilience as a category and overall margins continue to attract a lot of players to the business. “Everyone is piling into this space,” he said. “It will accelerate post-pandemic. Just really ensuring that Sephora keeps ahead of the curve is one of the biggest challenges.”

On a region-by-region basis, Sephora ranks first among beauty specialist retailers in the Asia-Pacific zone overall, where it is followed by Pola and Innisfree, according to Euromonitor. But in China, the most exciting, dynamic — and complex — region where e-commerce accounts for more than 50 percent of all beauty sales, according to Oliver Wyman, Sephora is in construction mode, building its online business and tweaking its brick-and-mortar model.

Last May, for instance, Sephora said it was launching cross-border on Tmall with “cloud shelves” stocked with product from new-to-China brands such as makeup artist label Natasha Denona and Sunday Riley skin care. The store was to carry 25 international brands at launch, including Rihanna’s Fenty Beauty, Bon Parfumeur, Farmacy and Dermalogica, and more than 600 products. “We clearly are going to continue to ramp up and accelerate our pace in growth in China from a store’s perspective, but equally making the investments to continue to build out our digital capabilities,” said Brok, adding initiatives include strengthening social selling, dot-com, partnerships and personalization capabilities. “We’re making some big bets in China.”

Sephora CEO Martin Brok

Sephora CEO Martin Brok
Julien Faure/WWD

The U.K. poses another significant growth opportunity. At the start of his discussions with Sephora, Brok was based in London. He Googled Sephora U.K. and saw the high level of recognition and buzz around the brand. But the retailer hasn’t had stores there since 2005, when Sephora shuttered its doors amid fierce competition from Boots and upmarket beauty retailers like Space NK. This September, Sephora reentered the market, signing a deal with Palamon Capital Partners and other shareholders to buy the U.K.-based online prestige beauty retailer Feelunique to reestablish a presence in the market.

The move comes at a time when the British retail landscape is both competitive and fragmented, with players such as Boots and Superdrug, plus fashion retailers like Asos and marketplaces such as Amazon Luxury vying for shoppers’ attention. “Finding the right platform partners really becomes part of the model that we’re looking at,” Brok said. “Feelunique is best-in-class in their space. They have an incredibly talented team. We’re coming at this in a very humble way, which is: ‘Teach us about the U.K. marketplace.’ Because if there is anything I do know, it’s that the U.K. is a very complex marketplace, and you have to get it right.”

In Germany, where Sephora has six physical stores and 16 corners in Karstadt Kaufhof, Brok opted to tie in with Zalando, Europe’s leading fashion and lifestyle e-commerce site. They announced jointly in June that they had signed a long-term strategic partnership to create a prestige beauty experience online, starting in the fourth quarter of this year. “You’re starting to see this reconvergence of fashion and beauty — this notion of the look. And [that] goes beyond what I’m wearing in terms of clothes,” Brok said. “That’s one of the things that we were so excited about as we thought about the Zalando partnership, because that’s one of the areas where you get to integrate that. It’s super powerful.”

The partnership with Zalando also gave Sephora a foothold in Germany with a marketplace platform model, as its prime competitor in the country, Douglas, bulked up its digital presence during the pandemic by opening its own marketplace to more partners.

Overall, Douglas is the largest specialty beauty retailer in Western Europe, according to Edge by Ascential, and Sephora is second. To gain the top spot, analysts said, Sephora will have to win in brick-and-mortar, too, which remains a key element in markets like Germany and the U.K., where the bulk of beauty sales are still made in stores.

In the U.S., Sephora’s largest geographic market, the retailer has found a strong balance between digital and brick-and-mortar sales. The Kohl’s partnership has enabled it to quickly expand its retail footprint into highly trafficked strip malls, where arch-rival Ulta Beauty has the bulk of its doors. Digitally, Sephora is also a dominant player, with about 30 percent of sales said to come from online, but there are still significant threats say industry watchers. “The real issue for Sephora in the U.S. is not Ulta, it is Amazon,” said Javier Escalante, an analyst at Evercore IRI. “And the question is how they keep their stores worth visiting.”

Brok himself is super focused on answering just that. “Some people will say stores are going away. No, they’re not,” he said. “Their role might be evolving, so it’s much more about the experience, deep personal connections curated for the consumer at a very personal level, building community, trialing and playing.”

He’s tapped fellow Starbucks and Nike alum George van Vugt to be Sephora executive vice president and global chief store portfolio and concepts officer, which is a newly created position. “There’s a hint there about how we’re thinking about the role stores play in the future, and design,” said Brok, noting that rather than focusing on a one-size-fits-all retail approach, there will be an emphasis on addressing the consumer’s pain point and shopping occasion.

“The new retail environment has strongly changed the role of the store, and COVID-19 just accelerated this trend,” Brok said. “With consumer expectations rapidly evolving, our goal is to create new brand experiences that are complimentary to the consumer’s digital experience and to rethink the role of our stores within the new omnichannel ecosystem.”

Sephora’s digital activity, which boomed during the health crisis, also shows no sign of abating. “It can be half of the business,” said Brok, who declined to reveal the current percentage it makes up.

While services like BOPIS, click-and-collect and same-day delivery were scaled during the pandemic, it is creating a human connection where Brok believes Sephora can win. “If you think about services, what I call the heart and soul of Sephora, are really our beauty advisers at store level,” he said. “They are ambassadors, curators. They create these personal, deep connections with consumers.”

So how best to catapult the beauty adviser’s personalized approach into the digital space? That’s what sparked Live Chat, which enables people to engage with a beauty adviser via chat while shopping online in real time. “What’s different than from what anybody else is doing is it’s not a bot — it’s a person,” said Brok, adding that innovation is part of a journey Sephora is on in the digital and omnichannel space.

Brok himself is almost as international as Sephora. The Dutchman had a father who worked for Coca-Cola at a time when the company expanded across the globe. So Brok globe-trotted, too, as a kid; he’s lived in the Netherlands, Belgium, Austria, South Africa, Germany, Brazil, the U.S., U.K. and, now, France. “The shortest I lived anywhere was 11 months and the longest was five years,” he said. “I speak five languages — French, not so good, but I’m trying really hard, learning. It’s proven, actually, the most difficult,” he said with a laugh, which bursts out often.

His default language toggles between Dutch and English — which is fluent and sounds American, with remarkable turns of phrase. “I had lived outside Holland so long that I started picking up an American accent in my Dutch, and you can imagine my friends all gave me massive grief about it,” Brok said.

Moving around makes one inquisitive and adventurous, he believes, and imparts a global citizen perspective. He and his family, including five kids — 16-year-old twins, plus a 19-, 22- and 24-year-old — love to experience new cities together. “Everything is about family,” said Brok, who calls himself “a bit of a global nomad,” but feels most at home in London and Amsterdam.

His peripatetic ways have also impacted his leadership style. “When you live somewhere, you really entrench. It brings a level of appreciation for culture, for differences and what people bring to the party based on their own experience,” Brok said. “So this notion of inclusive leadership is something that is super important to me. It’s about the team and how the team actually works together to progress the business.”

Brok adores spending time in stores. “It’s about allowing the opportunities to bubble up and giving the leeway, the freedom and therefore empowering our teams to bubble up these growth opportunities,” he said. “We do that extremely well.”

Brok en route to a store visit.

Brok en route to a store visit.
Julien Faure/WWD

Empowerment and a growth mind-set are key to Brok’s leadership style. So is “a little bit of ‘don’t take yourself too seriously.’ You know, we like to have fun, and we love to celebrate,” he said. “We love to celebrate success, teams and individuals. They always say it’s cliché, but culture eats strategy for breakfast. Without a doubt.”

He feels strongly that as a global brand, Sephora’s responsibility and accountability are to help shape society, and drive diversity and inclusion. “That is equally important,” Brok said. “I have four girls — that really helps shape your thinking. Female empowerment is something I feel strongly and acutely accountable for.”

These days companywide Sephora is more than 85 percent female, and women make up 70 percent of staffers at headquarters. Its executive leadership team is split half women, half men, and in the general manager lineup, there’s a female executive leading Saudi Arabia, the Middle East and Southeast Asia.

Sephora is also focused on being more purposeful. In June 2020, the group said it was taking Aurora James’ 15 Percent Pledge and dedicating 15 percent of shelf space to Black-owned beauty brands.

“We welcome everyone. It’s important that we actually live that,” said Brok, “by looking internally first and owning up to that. It is empowering, liberating. It’s who we are.” He said Sephora is focusing a lot of its efforts in that direction and will dial them up with Deborah Yeh, currently chief marketing officer of North America, whose job is expanding to include chief purpose officer globally.

De Lapuente described Brok as an “inspirational leader.” “He’s got a strong track record working for some really great companies. He’s a global citizen. He’s got a very strong multicultural background…and spent a considerable amount of time in the U.S.,” de Lapuente said.

“He’s smart, but also very well-balanced EQ-IQ. He gets on very well with people, motivates people and has huge ambition,” de Lapuente continued. “He’s very customer-focused. Martin’s remit is how do we continue to build this most loved beauty community.”

The executive characterized Brok as high-energy, always seeing the glass as more than half full (spotted sitting behind Brok’s desk, for instance, was the book “Post Corona: From Crisis to Opportunity”) and challenging the status quo.

“He’s smart, affable, someone who likes making everyone around him comfortable,” said Jeanne Jackson, founder and CEO of MSP Capital Fund, to whom Brok reported at Nike.

She called him a collaborative leader. “He lets people bring their expertise to the table, so that when a decision gets made everyone is heard,” said Jackson. “[Martin] recognizes that there are people there who might know more than him, so he wants to make sure that knowledge gets to the table and gets used. He has a real consumer-centricity.”

During Nike’s transition from an essentially entirely wholesale business to a direct-to-consumer business, there were lots of opportunities for the strategy to derail, and Brok was the key executive working with the separate operations side of the business to ensure things didn’t go off track. “He got them to participate the way we needed them to,” said Jackson, adding: “I thought he was always destined to lead a global company. He’s got that leadership presence. He’s always been very inclusive.”

Martin Brok in Sephora’s Champs-Élysées flagship.

Martin Brok in Sephora’s Champs-Élysées flagship.
Julien Faure/WWD

Luca Solca, senior research analyst, global luxury goods at Bernstein, said Brok brings to Sephora “valuable experience in another category killer that has gone through different phases, from expansion to maturation.”

Over the last year, Brok has worked to find the right balance between flexing Sephora’s global might while being attuned to local nuances. “We’re as global as needed, as local as possible,” he said. “What I underline there is that the consumer is a local consumer. That’s where the art of who we are and the science of who we are as merchants comes to bear, which is we curate for the local consumer better than anybody else.”

In other words, while there are overarching category trends that are true in most markets — such as transparency in ingredient sourcing, for example, or sustainable packaging — the execution varies. “How it comes to life by region is going to be different,” said Artemis Patrick, executive vice president and global chief merchandising officer at Sephora. Patrick, a Sephora veteran who headed up its e-commerce business in North America and most recently had oversight of all merchandising, is widely respected as a brand whisperer. In her broadened position, her mandate is to accelerate global expansion of differentiated products and brands, while ensuring a strong localized balance remains. Information sharing and putting in best standards are key.

“Our strategy for product choice basically comes down to three things. First, it’s a unique brand, a founder story,” Patrick said. “The second is around innovative product, and the third is a team at the brand that really believes in partnership and collaboration like we do.”

The holy grail is to know Sephora clients better than they know themselves, and brands and products are assessed through a consumer lens. “One of our sayings is that the client is the boss, and we go where they go,” Patrick said. “We believe that our job is to serve the consumer first and foremost. It’s very much what drives our merchants and keeps us motivated.”

Brands say streamlining the global structure under Patrick better enables Sephora to drive success across geographies. “What changed, what helped the most, was the way all the markets work together, communicate and share information,” said Scott Friedman, CEO of Rare Beauty by Selena Gomez. “It wasn’t the same level of sharing before Artemis took her new role [in August 2020].

“It’s uncertain when you start a new brand, particularly when you have a lot of skus, how each is going to do and what’s going to be successful,” he continued, noting Rare Beauty launched in 31 countries in less than a year. “It really helps when the local market is able and willing to share information.”

Huda Kattan, founder of Huda Beauty, lauded Sephora, calling her business with the retailer “really amazing.” Kattan launched on her brand’s digital platform as well as with Sephora, first in Dubai Mall, then in the U.S. and France, among other countries. “We were able to grow much faster, not only using our channels of content and social, but also their forms of distribution within their immense retail presence,” she said. “It was an opportunity that helped us scale our business in a way that was something we could never have done without them and also at a different time.”

Today, Huda is in more than 2,000 Sephora doors. Kattan likes that Sephora executives give feedback and help brands figure out how to broaden their reach. Under Brok, Kattan sees changes for the good. “It definitely feels like Sephora is continuing to get more and more direction, and are adapting to the change that’s been going on in the world,” she said. “It kind of felt like they were adapting, but it was kind of slow, and now it feels like it’s happening a little quicker. What I mean is that I see a bigger indie presence…which I feel like makes Sephora very cool. [That] is important to me, as a brand that sells within Sephora; I want people to feel like Sephora is cool.”

Vicky Tsai, founder of Tatcha, agreed. “By prioritizing purpose and innovation, they have demonstrated that they are true partners who are committed to both their brands and their clients alike, especially throughout the historic events of the past few years,” she said.

“As a woman of color, I admire and deeply respect Sephora’s longstanding and pioneering commitment to championing diversity and inclusivity for both their clients and the beauty industry as a whole,” Tsai continued. “Their mission to make everyone feel like they belong to something beautiful isn’t just marketing. They are actually putting in the work, notably through the Sephora Accelerate Program.

“Tatcha exists today because Sephora believed in us from day one. While other retailers told us that Asian beauty is not aspirational to the Western woman, Sephora saw something special and took a chance,” she added. “They remain incredibly supportive, both professionally and personally.”

Sephora takes a 360-degree approach. “We are the only omnichannel [beauty] retailer with global reach,” Brok said. “We have the ability to bring and extend the reach of those brands across the globe.” Today he’s looking to speed up the process, implementing more modular fixtures in-store, for example, to help test products fast and foresee what could be the next hot category or brand.

“The categories we play in today — skin care, makeup, fragrance and hair care — are incredibly dynamic, constantly evolving,” Brok said. “We’re just starting to teach the consumer that if you think about hair care, it goes well beyond shampoo and conditioner. We could probably frame up seven steps in the routine for you.” Also on Sephora’s radar is the new holistic vision of individual wellbeing and self care that’s emerged.

Brok is learning about beauty from his colleagues at all levels of Sephora, but also by playing with product. He and his family members are constantly trying new ones. “I always joke with the team that it’s probably too late. But by God, I’m trying,” he laughed. “That’s part of the fun about the industry we work in.”

Saunders sees lots of opportunities, as well, such as more worldwide exclusives, personalized skin care and expanding the private-label line. “There are all kinds of services, like could you open a Sephora spa or a Sephora retreat?” he said. “It sounds a bit fanciful, but a lot of retailers are looking into the wider experience. What could Sephora do to bolster the brand and the brand experience?”

As for Brok? He’s not ruling anything out, saying “At 51 years old, we’re just getting started.”

For more, see:

Sephora Picks Accelerate Brands for 2022 Cohort

Sephora Helps Drive Growth at Kohl’s

Sephora Is Now Offering 2-Hour Delivery

https://wwd.com/beauty-industry-news/beauty-features/sephora-future-focus-ceo-martin-brok-1234996752/ Sephora’s Future Focus, With CEO Martin Brok – WWD

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