Name: Most Powerful Women Summit 2024: The New Beauty Standard
Uploaded: 2024-10-16
Duration: 18 min 52 s
Description: Artemis Patrick, President and CEO, North America, Sephora Interviewer: Michal Lev-Ram, Fortune

Artemis Patrick, President and CEO, North America, Sephora Interviewer: Michal Lev-Ram, Fortune

Most Powerful Women Summit 2024: The New Beauty Standard

Conferences

So I know you've been with Sephora for a very long time, almost 19 years, I believe. Um But I wanna take a step even further back. Um You had a really unique childhood and upbringing and I'm wondering if you can share a bit about it with us today and how it shaped you as a leader. Yeah, happy to and thank you for having me here. Um So I was born in Iran uh and uh lived there until I was about seven years old. Uh My father was actually one of the pilots for the Shah. So in 1979 during the Iranian revolution, um we had to get out very quickly. Um And so my mother, my father and I um escaped to uh America. We came to Los Angeles actually. Um I didn't speak a word of English. Uh I was put into an ESL class and I learn more Spanish than I did English. So I was like, not a lot of Iranians here. Um So uh so I was there, we were there for about a year. But um unfortunately, my parents were having a lot of problems. My, my mom was very young when she had me. And, um, you know, my father had a really hard time dealing with this fall from grace. Uh So, um after about a year, we moved to Northern California and um my mom decided to go back to Iran, um with, I think the hopes of bringing me back there and sending for me, but she got there and very quickly realized that um the country had changed a lot and was really not a place to raise a little girl. So, um, I was trying to figure out what to do was trying to get actually back to America at that point, but it was during the Iranian hostage crisis. So she couldn't get out. Um, and my father was really not equipped to take care of me. So I ended up in the foster care system and uh lived in a group home for about a year and then I moved in with American foster parents when I was 10 in Northern California. And they raised me. What do you think? Um, you take from those days? I'm sure it strengthened you in so many ways. But what do you kind of fall back on when you need to? Uh, you know, I definitely know what it feels like not to belong, uh, to feel different. I think it was Palina yesterday who was talking about, um, you know, watching a lot of television, I can relate to that as an immigrant. I learned all of my English from TV shows. Um I'm still a L A Lakers fan and people are like, well, I'm like, that's how I learned English from watching the Los Angeles Lakers games. And so I think just, you know, being feeling, you know, different and looking different and speaking different and especially, and also with my foster parents, they didn't look like me. And um that's, you know, I think it's really shaped me who I am as a person, but also who I am as a leader. And I really truly believe in bringing in different thoughts and uh diverse ideas. And, you know, I, I think for the most part, people don't get up in the morning and think I'm gonna do a bad job today, like everybody has a story, everybody wants to do good. And, you know, I think that as long as as leaders were welcoming to that, um it's really, really important to me. And I think, you know, it's not to say that, you know, you're gonna take everybody's opinions and always do what everybody says. Ultimately, your job as a CEO is to set the strategic vision and to create focused priorities and to remove obstacles. But how can you get there if you don't bring in diverse thoughts? So I'm gonna pivot to the business um at Sephora of Sephora and I mentioned some of the growth um but we've seen so many different patterns in consumer behavior over the last few years. What's, what's, what are the trends that are driving growth at Sephora today? Yeah. You know, I mean, I, like you said, I've been there a long time and so, um you know, I've been through, through all of it, through youtube, through Instagram, through, you know, and obviously tiktok is a, is a big part of it through social, for sure. Um You know, it's for us it's really about understanding the trends before they happen. And then so social media is just a way that, that actually captures it. But, you know, it's not by an accident that a lot of the hot brands that are trending that are only sold at Sephora are on tiktok. I mean, uh you know, there's a method to the madness with our um incredible merchandizing and marketing teams. Um But certainly that has, I think democratized beauty, right? And the conversation around beauty, I mean, I always joke that, you know, thanks to brands like the ordinary, my 14 year old now knows what niacinamide is and I couldn't even pronounce that when I was her age. So certainly it's, you know, I think opened up the appetite, the conversation around it and especially around skin care. I think what Instagram did for makeup. Certainly. Uh tiktok has done it for skin care. Yes. Anybody here who has teenage Tween daughters. Yes. You know, they're really into their skin care routine and they, there's smoothies. What are smoothies, by the way, for anybody who doesn't know. Well, yes, you gotta, you have to mix it, you gotta mix them all together. They mix and mix it all together. Yeah. Yeah, you got to glow with the moisturizer. It's the whole thing. By the way, I've been doing that for a long time. So these kids are hilarious. I'm like, but they're call it what you want. But, yeah. Um, well, ok, so speaking of kids, there's been a lot of talk at the conference about Gen Z and, and um and Zel, which I millennials, you know, this micro generation, which I didn't know existed. Um but I'm a part of apparently, um but I wanna hear more about Gen Alpha and, and what does Sephora know about Gen Alpha? Sure as a consumer. Yeah. So I have a 14 year old so I definitely can relate. Um You know, the thing for us is, first of all, I mean, we do not market to this audience, right? Um And so it is really important for us to continue to remain committed to marketing to the appropriate age. You're never gonna see teenagers in our windows. In fact, I had a brand not that long ago who had a, a product that was not appropriate for um a younger consumer. And we actually asked them to change the model because um even though it's not, you know, our brand, we're, we're not comfortable putting you know, young kids selling retinoids and retinols um in our, in our window. So we do believe we have a responsibility to make sure that that what we sell is age appropriate. We have over 25,000 beauty advisors across the United States and can and Canada who are highly educated. Um that, that has been the core in our DNA from day one, they are not commissioned, they are very unbiased. And so we do train on what's right for the skin depending on the age. Um And at, at some point, you know, there's the responsibility of us as parents like me, as my 14 year old, you will not catch my 14 year old using Retinol, right? And so um I, but it is incumbent on us, it's incumbent on our over 253 100 brands to make sure that we're talking to the right audience at the right time about the right thing. Um So yes, there's been an influx of the younger generation coming into Sephora and we really do do our best to encourage them um to use uh the age appropriate products. Um I wanna ask you about the retail strategy. Uh You're in the midst of revamping a lot of your stores. What, what, what is the strategy there and why so much focus on the the retail footprint, right? Well, I mean, we've always had a beautiful relationship between the digital um and as and retail So we started our e commerce business in 1999 kind of ahead of our time. But the stores have always been the soul in the DNA of our, of our brand. I mean, our first uh store in 1998 was in Soho in New York. And it's now our number one store across North America. So the fact that it has sustained over 26 years, our first store in Canada opened 20 years ago in Toronto. So we took a step back post the pandemic and I'll never forget I was like, people aren't going to come back and use testers and people are like within three seconds or putting everything. And I'm like, oh, ok, let's slow it down a little bit here. So, you know, I mean that I think that interact, beauty has always been tactile and then that relationship, you know, our beauty advisors and that relationship with each other as your shopping, Sephora. So we took a step back and we said, ok, our stores have been around for a long time and our new stores look really, really pretty, but some of our older stores not so pretty. And so we said, what would that take? And I think, you know, you hear a lot about retailers doing a store of the future, so they'll take, it's very much a design element and they'll take one store and it's design driven. Usually you have the design team who kind of leads that we said, OK, let's take a step back and make this a merchandizing driven uh project, right? And so how do people want to shop? What are the right brands? How should we position? Where does beauty uh beauty to go and minis and more go? Now that one in four consumers are shopping with a mobile, mobile P OS. Are they going to stand in the long wave like that? And what are the hot brands we want to pull forward? And so we created the, what we say, the ideal map and it's actually in a lot of the stores that you see today that have been built over the last couple of years and we are gonna go back over the next 5 to 7 years. Um And we are embarking on the largest capital project in the history of Sephora globally and we're gonna refurbish every single one of our stores because we feel that whether you're shopping in Boise Idaho or in Toronto, Canada, you should have the same beautiful experience no matter where you are. Um I'm gonna go to you guys for questions in a minute here. So please be thinking of them. But um and one more question for you on the on the retail footprint side, um You're also experimenting with kind of mini stores under 4000 square feet in urban areas. You've done this before. It quite work out. What, what's different this time? Yes. So I was part of that project years ago. Um And we still have a few of those around. We had an urban, urban concept and um you know, our biggest learning was don't cut the assortment. I think what we did is we said, oh, we still have this big beauty studio and this cash strap, but we'll just sell less brands. It turns out people want to buy a product. And so we said, ok, let's take this back. And what would it take for us to have a store that is like about 15% smaller than our existing store? It's under 4000 square feet, but still offer the exact same assortment. And so what we've done is we've reduced the backstage and now we have more deliveries to that store and then we also remove the cash, the tradition cash wrap. So everybody is at Mobile P Os. But if you wanna pay cash, there's an end cap there that has this very small. Um The small end cap, we've reduced the area for services. Um We actually launched uh three this summer. We'll see. We were like, let's see what happens. Um One in uh Queens, New York, one in Brooklyn and one in uh Toronto at the Well, and they have far exceeded our expectations. I actually went to the opening at the Queen store and you would have thought you were at a party. It was bananas, people were dancing. I'm like this is amazing. And then that same day I, I went over to the Brooklyn store and this is crazy in the Brooklyn store. You can watch, you can walk 10 minutes to the left and be at a normal regular Sephora walk 10 minutes to the right and be at a regular Sephora and that store is killing it. It is over 60% above plan and over 60% new Beauty Insider signed up within the first month. So six out of 10 people walking in did not already have a Beauty Insider account and there's 10 minutes either way. So we believe that this is a really, really exciting concept that we're gonna look at more dense populations. This isn't gonna be thousands of stores. But when you think about New York, Toronto, Los Angeles, maybe even San Francisco. Um I think we have, we're onto something here. Great. We've got a question over here. But today we met yesterday. Um, first for anybody doesn't know Artemis is a historical figure. Navy commander, fierce leader. You're living up to your name very well. Um It's, it's fascinating. Please look that up. You've had a tumultuous childhood and it's build resilience. You can also throw people off quite well, but you have turned to the other side of it and you have made you a very strong female. How do you pass on those values to your Children? I asked that. So she asked how I passed that to my Children, my child, um, my husband also had quite a tumultuous, uh, upbringing. It's for a whole another, another time. But, um, it's hard because, you know, I, we're, we're both funny because I tend to be sort of like, I didn't have anything so I'm gonna give her everything she wants and he's like, I had a hard life and she's gonna work for it. And I'm like, so we've definitely taken the, the two different approaches of how you raise Children when you've had tumultuous um childhoods. But uh you know, I just, I, I just, it's empathy. Uh We talk about it all the time. It's empathy. I, I don't know how else to say it. We are constantly. I mean, it's, you know, be kind say thank you. You know, be thankful. We, we make sure that she understands um where she came from. But, you know, the of the day you don't fully understand until you're older. I mean, I, I definitely also, I had a lot of anger around what my mom, you know, my mom abandoned me and all this stuff and until I was older and I had a kid of my own, I didn't fully understand the sacrifice that she made. So what I always tell my husband is, you can't expect her to be any more than 14. And when she turned 15, you can't expect her to be any more than 15. Just keep teaching kindness and be empathetic and really at the end um they'll get there. Yeah. Other questions for Artemis. Let me see. We have, let me bring a microphone over here. We've got a couple. Can you raise your hands again? Oh, there you go. Start at the front. Hi, Mona in Africa. Equality. Now I have a question about, I, I love Sephora and I love that. It's multigenerational. I love it as much as my kids do. Um How do you manage to keep that product makes so relevant to so many different customer groups and now that I see that you're going into your own brand and you're developing sort of a Sephora line. How does that fit into the mix? Good question. Yeah, we've actually had Sephora Collection since the beginning when we launched um Sephora in France as the first store. Um even before that, when Sephora launched in uh Limoge France in the 19 seventies, Sephora brand was its own brand. So that's always been part of our DNA. We're definitely stepping it up. I think we look at it as an entry point. Um It's amazing quality to be clear for all of you with young ones for collection is amazing. It's part of LV Mh. So it goes through the same rigor as every LV Mh brand. Um just really good prices, so very good quality. So that's how we think about it. It's an entry point, great quality. Um and a way to enter the brand and we're very proud of it because it's what you take home at the end of the day. You see that you see the name in terms of remaining relevant. Listen, I mean, that is the secret sauce of Sephora, I'll tell you. So, you know, if you take a step back and, you know, when Sephora first came to America in 1998 similar to me, it was a bit of an outsider. And um you know, a lot of the big strategics didn't want to work with us. You know, there was the big department stores. And so just by sheer survival, we had to work with these little Indie brands and start in the kitchen and we would start early and we'd hear their stories and we'd be in there trying the formulations and give feedback and any brand that's ever worked with us. I see one in the audience here knows that we really love getting in there and getting in the kitchen and that allows us to build a brand together in many, in many ways. So you think about, you take for granted brands like two face Urban Decay Stella, you know, these brands that were, you know, not household names 28 years, 26 years ago. Uh So I think that to your question, it's really about getting in early, you know, I see uh cmo Rare Beauty here and I remember our very first meeting. It was goop in a jar and Selena Gomez and it was like, whoa and you know, and her passion um for the rare impact, fun and her belief in giving back. And so we were like, wow, great founder, great team, good product. Wow. And they give back as well to an authentic cause. That's very, very real to the founder. You could not ask for anything more as a merchant. Now, let's get in the kitchen and figure it out together. Um So it really starts very early. Do we have another question over here? Go ahead, please. Hi, Suzanne Juan, I'm with mccormick and company. And I was curious. Well, first of all, thank you because I have two bonus daughters and you make Christmas shopping. I was curious as you look at your professional career with Sephora, what's the biggest bet that you made and look back and say that was the one for me personally or for the, for the company one you want? Yeah. Uh Well, I can uh uh quickly answer both. Um I think professionally it was when I asked to be the general manager of foreign inside JC Penney. So at the time I had a whole ecommerce background and I was like, what do I know about running a PNL and JC Penney? Um and it was the, it was so amazing. I stepped in right during the Ron Johnson time. So it was very, very tumultuous at JC Penney and I remember the CEO at the time, our CEO Sephora, he sent me a note and I just had one line and it said Rome is burning, protect your house. And I thought, oh my gosh, what is going on? And so, and I did and I put my arms around the team and we just focused and we went forward and I'm very, very proud of what we delivered over the, the partnership there, um which ultimately then resulted in a really, I think, deep understanding of how to work with another retailer. And I was very early on talking to Michelle about the Coles deal. So, um so I think professionally, I, I wasn't sure I should take that job and I think it really sort of turned the tide for me. And then, um I would say for us, like there's so many decisions, so many brands we've launched that, you know, now again, our household names, which is really, really exciting, but something um that is, I think meaningful to me. And so a lot of the team was in 2020 when Aurora James reached out to us to become part of the 15% pledge. Um It was after the murder of George Floyd and there was a lot going on and we were at home alone on Zooms and there were six women um on this zoom and I'll never forget. Um when we said yes, we will be the first retailer to support the 15% pledge and the commitment that we made. And back then, we only had 3% of our assortment that uh you know, being sold by founders of color by black founders. And today we've doubled that assortment and we've actually reached 15% pledge in hair. So, um to me that will, it's, it's a lifetime journey and making a commitment to bring founders um of diverse backgrounds is, it's so critical to me, I talk about this all the time that, you know, I have a daughter who has curly oily hair and she has no idea how lucky she is because, you know, back when I was younger, you know, I didn't have the right products. But that's because people with hair like me weren't making brands for people like me and I, and I wanna change that um very, very meaningful note to end on. We'll have to get your smoothie recipe later. But thank you so much for joining us. Thank you. Thank you.