CULTURE TRANSFORMATION: How Sephora Canada nurtures a winning culture of Inclusion and Individuality

Few brands have captured the imagination, loyalty and repeat business of their clientele like global fashion phenom Sephora. In 2023 the organization, part of the luxury brand conglomerate LVMH, generated US$16billion worldwide gaining a reputation as one of the fastest growing retailers globally. In results shared in April 2024, LVMH acknowledged that Sephora continues to be a powerhouse within an organization with an already impressive array of fashion and fragrance brands. Personally, I’ve always been fascinated by how culture drives retail success (or impedes it) so I jumped at the opportunity to interview Thomas Haupt, EVP Country Manager for Sephora Canada, who remains one of the most frequent commentators and proponents for organizational culture in my network. Thomas did not disappoint bringing his trademark energy and passion for the Sephora business and explaining why, in his opinion, culture has been a critical ingredient in Sephora Canada’s runaway success.

HB: Delighted you were able to make time for our chat Thomas. I was in a Sephora store earlier today and the energy was just fantastic. I can’t wait to dig into how the magic is nurtured. First though, tell us a little about your journey and Sephora Canada if you would?

TH: Happy to hear that Hilton. I’m incredibly proud of our team here at Sephora Canada and how consistently they show up for each other and for our clients .

In truth I kind of fell into retail after college and it has been my career, and life, ever since. The majority of my early career was at The Gap which was a fantastic learning ground. I progressed from store positions, to leadership roles and then finally into head office. After that I explored several other retail organizations before joining one of the luxury brands in the LVMH portfolio which was an unforgettable learning experience for six years.

Two years ago the opportunity arose to come run the Sephora brand in Canada and I leapt at it. I’m very grateful that LVMH prides itself on internal mobility and presenting their people opportunities to grow and develop in so many ways. And this is across the more than 70 businesses that exist under the LVMH halo so the opportunities are almost infinite. Personally, I’ve always had a very “mobile” life, including living in more than 9 US cities during my career, so the idea of moving from New York and setting up here in Toronto was a very easy decision for me to make. Being Country General Manager for Sephora Canada is a real privilege as you can imagine.

What many people don’t know is Canada is the 3rd largest Sephora market globally which is not a responsibility that we take lightly. When you consider the relative size of this market, being able to consistently deliver those results is testimony to three things I believe.

One is that LVMH places a real emphasis on being ”loosely centralized” which means the organization has not forced all 70 businesses into one CRM platform, one supply chain, one centralized inventory. LVMH astutely recognizes that giving each brand and business the latitude to develop and deploy what makes them individually successful in their market or category is a genuine superpower. In short, I’m given tremendous latitude to discover what works for my brand, my business, in my country or region while respecting the heritage and core DNA of Sephora globally. That’s incredibly liberating.

Two is the market dynamics in Canada. We face a behemoth mass competitor who have a beauty offering in over 400 stores nationally. That’s a huge footprint and they deliver the convenience, accessibility part for many Canadians. Our footprint is much smaller – we’re on our way to 130 stores nationally – but our clientele experience couldn’t be more different. Experience, experimentation, discovery, playfulness, inclusivity and individuality are all part of the Sephora in-store and online experience, so we satisfy a very different dimension for our Canadian clientele. The way we deliver on all those elements is why Canadians reward us with such high levels of loyalty. Also our product selection, of which 75% are exclusive to Sephora, is another important reason we’ve captured the market share we have.

Three, and we’ll be chatting more on this, is the quality of our people and the depth of our culture here at Sephora Canada. We are deliberately very tough in our hiring processes but have found that diligence ensures we can identify candidates with the genuine passion and drive to be one of our beauty advisors. Ultimately, they are the face of our brand and the people delivering that unique Sephora clientele experience so we’re not willing to compromise on that.

HB: 3rd largest Sephora market globally? That’s incredible and I’m a little surprised to be honest. Thanks for breaking down the market so deftly. As a marketer myself I appreciate that synopsis. I’m fascinated by how retail organizations nurture their distinct cultures. Let’s start at the basics. How do you, or Sephora, actually define culture Thomas?

TH: I’ve always been taken by a very simple belief of culture inside business, particularly retail business.

That is – our inside has to match our outside.

Simple, obvious even, but no less profound because it sets up so many critical decisions around hiring, education or training, reward systems and how and where you invest time and resources.

In retail, and in my personal experience, I think building and nurturing that culture really comes down to being focused, obsessive even, over the details.

An illustrative example is our annual Lunar New Year campaign . Our business, as you know, celebrates diversity and inclusivity in all its many glorious manifestations so, for Lunar New Year, we were very deliberate that the cast and crew who worked on the campaign was from the Asian community. I’m talking right down to the photographers, videographers and caterers on set. We don’t publicize that fact but I think it highlights that sweating even the smallest details – so your inside matches your outside – is a vital part. If you don’t do it, that’s when you get people pointing to posters in the washroom and saying that’s not the company I work for.

HB: Beautiful answer and fantastic example. Is that attention to detail something woven into the Sephora brand because "details" are a classic hallmark of luxury brands? Is this a Sephora DNA thing?

TH:  I think it's a little of both.  Dominique Mandonnaud, the founder and creator of Sephora, was a pioneer in many ways. When he opened the business, no product was ever freely available so that you could touch it. Products were typically behind a glass counter, there was typically someone – female, immaculately dressed and representing a particular look and style - who helped you with your make-up and fragrance needs. There was a tremendous ceremony to it all.

The Sephora breakthrough, fully embedded in our DNA, was to take all those conventions and turn them on their head. Products out in the open, not behind glass. Want to experiment and play, go ahead. And we completely blew up the definition of what is beauty and who is beautiful as something determined by an external brand or business. All of those elements are a vital part of what sets Sephora apart.  

Inherent in that is still a luxury-style brand retail experience set and defined by our clientele. If they come to the store with questions or seeking advice, we’ll take the time needed and pay attention to helping them. If they are super confident and know exactly what they want, and we have a legion of those clients, then we’re there to discretely support them. If they’re in experimentation and discovery mode, then we’ll serve them differently.

What I think Sephora is doing so well, in Canada in particular, is we don't define beauty for anyone. Our global Purpose Statement eloquently sets this out as: “We champion a world of inspiration and inclusion where everyone can celebrate their beauty.

Those words are a vital differentiator for us. Culturally in who and how we hire and in how we operate our stores and make decisions every day.

 There is no-one image that says this is what beauty or beautiful is. Our goal is to help everyone feel their own beauty and that they are beautiful in an individual way. So when you enter our story – in-store and online - you'll see this great mosaic of talent. You will also see this great artistry as so many of our team members have used our products to adorn their faces with great artistry. It's just beautiful. We have these amazing people who do this personalized design with great skills. And regardless of their gender, regardless of their age, regardless of their sexuality, regardless of their ethnic background, we embrace them being themselves in their best way. That’s a culture dimension in my opinion.

 HB:  I'm always intrigued when I talk to retail leaders about culture as a great filtering mechanism for decision-making. Some are remarkably rigid in how their culture operates. My sense is there is tremendous freedom and latitude embedded in the Sephora culture. Have I interpreted that right?

TH: You have, but with that latitude or individual freedom there is tremendous accountability too. We’re very transparent about Sephora’s goals here in Canada and while we may not have rigid store KPI’s like how many units of X needs to sell per store per day or how many customers each beauty advisor must serve each shift, make no mistake, we are definitely outcome driven. The difference goes back to that LVMH attitude I spoke of earlier. Our store managers and individual beauty advisors are entrusted to know their market, their team and their clientele and to develop plans to serve them and deliver their numbers. If our “outside” is inherently around inclusion, individuality and inspiration, then we need to apply those same filters as we work internally too.

In real terms that does come down to fundamentals around hiring, training – what we call education, and some of our reward systems. You’d be hard pressed to find an employee group more passionate about beauty and self-expression than our beauty advisors and that passion definitely attracts the clientele we have. As I travel the country and do store visits, I’m very proud to see and hear about the rapport that exists between our associates and our clientele. I often hear about clientele who have a specific beauty advisor they explicitly seek out on each visit because their connection -and trust - is so deep.       

HB: I’ve no doubt about that rapport. I’ve seen it first-hand. Can you be a bit more specific about your specific practices that have built this culture Thomas?

TH: Absolutely. So, the hiring rigour is one element I spoke about earlier. Without a shred of irony, I’d say it really is a special kind of person who wants to work at, and will succeed at, Sephora stores. There’s absolutely a degree of self-confidence required but it is the creative expression component which is a rare quality. Again, it doesn’t have to be something grandiose and bold, but our beauty advisors need to have a flair for self-expression and, equally important, be able to coach, counsel or coax that self-expression in our clientele. That’s vital. And it can’t just be that you’re self-expressive but, more critically, you genuinely enjoy helping others express themselves too.

The education part is ongoing as we have at any one time more than 300 individual brands in our stores and our beauty advisors need to be knowledgeable about them. Built into that education is one of the perks of Sephora – we give our advisors lots and lots of product to play with, experiment with and learn about. Some, obviously, is about that individual artistry I spoke about earlier so our advisors have hands-on experience with the product. Secondly, it’s because that hands-on experience means they can be more authentic advocates when a client asks which products are best for situation x or y. There’s a huge difference in recommending a product if you’ve actually played with it yourself and know how it feels and works.

Increasingly new technologies are becoming an important addition to the advisor and clientele interaction. Case in point we now have AI-enabled technology that allows us to be way more accurate when matching skin tones and new products for our clientele. In the past that was a very inexact method and often relied on the expertise of the advisor. Now we have an AI tool in-store that can review your skin tone and make more accurate recommendations which only goes to deepen the confidence and comfort of our clientele. Previously you might have only 3 or 4 skin tone options, but  this new tool accounts for depth, undertone and saturation to make it easier for clients to find the right beauty products . Related to this new enhancement  around matching skin tones, I wanted to mention a Canadian-specific  initiative that remains very dear to me and personifies our brand values in a unique way. In my office are three posters that, when viewed from afar, are excellent but quite abstract. When you get closer you can see they are formed from thousands and thousands of individual dots. The individual dots? Each one represents a singular skin tone from one of the scans I just mentioned. We identified 140,000 unique shades from hundreds of thousands of scans across Canada which we then turned into OOH billboards in Montreal, Vancouver, Quebec  to show how nuanced and inclusive our tool is. And that Sephora is a place that truly understands just how unique YOU, the individual client, are. I can’t look at those pieces without getting a little emotional because they really are a celebration of diversity in this country.

HB: Those pieces really are quite magnificent Thomas. Thank you for giving me the context behind them.

A final question I always ask, what advice do you have for your peers looking to build the type of passionate, results-driven culture you have here at Sephora? What do you say to them?

TH:  The number one thing, when I think of culture is that, no matter how senior you are, no matter how broad your scope, if you are not hands-on the culture just won't happen. It's not someone else's responsibility, it's yours. In my role here at Sephora, I consider my responsibility to ensure that everyone here feels like they fit in, and their contribution is valued. That when they go home and sit down with their family they can speak with a measure of pride, or happiness, about where they work. I look back at times in my own career and there are times I didn’t feel that I fit. That’s not a feeling I want any of my colleagues to ever feel. I take that on as a personal responsibility.

Second, and this one can get into a lot of debate and discussion, is get deep into the details. I shared this earlier in our chat around Lunar New Year, but I feel that getting deep into the details is vital. When I tell other colleagues, or other leaders, they often misunderstand this as a lack of trust in my colleagues. I believe it’s actually the opposite, if I’m not conversant in the details how can I truly assist and support my colleagues? If I’m unfamiliar with where the systems are broken or processes are too cumbersome, then I’m not enabling our people to thrive.

Being deep in the details doesn’t mean supplanting the agency and authority of your people. You’re not making decisions for them; it means you’re travelling the same roads as they are. To see the hurdles they face…and then remove them.

Shockingly <Laughs> the last piece of advice is never loose sight of who your client is and what they need from you. And back to the inside matching the outside comment I made at the outset, it is vital to remember who that client is - because that client can actually be a colleague.

Externally most companies do a decent job of listening, refining and adapting to the inputs and feedback they get from customers. Internally, I’d say most organizations do a much worse job of listening, refining and adapting when that feedback is from colleagues. At Sephora we do our share of surveys and engagement metrics but what I’m proud of is that we over-index in having rich, deep, purposeful sessions to get to the root causes of the issues that have been raised. Recently we heard about several obstacles that our people faced when trying to execute their programs. Our approach was to sit down with every single team for a full day, in some cases even two-day, facilitated work session to get under the challenges and work it through. So, the advice? Be as willing to do the deep work inside as you’re willing to do outside.

HB: Well, that’s a mic drop right there Thomas. Thank you mate. It has been a real delight having this conversation. Thank you for your time and insights today.

TH: My pleasure Hilton. Thank you for taking such an interest in what we’re doing here at Sephora Canada.

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