Margarita Arriagada, Chief Merchant for Sephora, is excited about a lot of things going on at the beauty retailer. In addition to new launches and innovation in skin care, most notably Margarita is proud of Sephora’s newest in-store services, Skin IQ and Color IQ, rolling out to stores now, each of which provides unbiased customer recommendations based on individual concerns, needs and desires. Here, Margarita discusses these latest endeavors, and her advice to manufacturers in the beauty industry.

Beauty Insider: In a short amount of time, mobile has grown to account for one-third of all visits to Sephora’s website. Do you take any cues from what’s trending online and bring it in-store or do you focus squarely on the shopper’s habits in-store?


Margarita Arriagada: The most important part about mobile is client interaction—they’re using the phone and the tablet—and that’s very important as we definitely see it as an extension to an in-store visit. Really what clients love are the reviews, checking in-stock, discovery—that’s the game-changing aspect of the omni-channel. What trends online also trends in-store. That said, we can see what trends faster online—even on the first day of a launch—so the more transformative mobile aspect is the interactivity of how they’re using the phone to do research and see what’s in store.


BI: What’s hot?


MA: We’re expecting continued product innovation with the launch of the CC Cream category. Brands getting into this include Ole Henriksen, Clinique [which just launched] and Sephora Collection launching this summer. We see bold color in lip as a trend, as hot as the nail category has been, with all the different finishes, long-lasting formulas and great effects sparking that covetable excitement in lip. Nail has been huge and it will not stop. I’m most excited about the unique special effects. The gel business will also continue to evolve with graffiti and confetti effects. The category is not saturated, it will continue to evolve in terms of looks, but it’s here to stay. Innovation in foundation will add to the category with pro finish formulas, second skin effects and treatment properties. Make Up For Ever will have something exciting on this front. In skin care, I’m seeing a resurgence towards retinol and that’s a significant headline. Kate Somerville and Algenist are introducing products around that.

BI: Department stores are creeping in on in-store services for customers. How are in-store services evolving at Sephora and what’s planned for 2013?


MA: Skin IQ and Color IQ are game changing in our approach to harnessing technology to solve beauty problems. Delivering unbiased consultations based on best-in-class knowledge is the future. Color IQ is like no other foundation matching service. It is amazing technology that was developed in partnership with Pantone, and it has revolutionized foundation-matching abilities for all of our clients. Skin IQ will offer targeted product recommendations to address skin care concerns. It’s not a general recommendation, it’s customized with specific products for one’s concerns. It’s taken years to build, to mine all the formulations and algorithms. Skin care is overwhelming. It’s great you can talk to someone in a department store as there is a high level of expertise, but it’s single branded.Our culture turns that formula on its head with multi-branded unbiased technology and expertise based complimentary consultations.

BI: What areas of the store are you focusing on in 2013?

MA: We’re continuing to enhance the Beauty Studio, and Color IQ will be part of that. It’s the hub of our store, customers are like bees to honey for it. Skin IQ is rolling out now. We have curated an assortment of products that are not necessarily the best selling but are our favorites and what we think will round out the consultations. We are also looking at bringing tools and accessories in the fall.

BI: Where do you learn about new brands?


MA: I attend trade shows, such as Cosmoprof in Las Vegas, but primarily we just stay on top of what’s hot. It’s a multi-faceted approach that includes watching the business really carefully to see what’s lifting in terms of category trends. I don’t do a lot of trend trips—we have global e-commerce and retail so that’s how we were able to jump on the BB Cream trend when it happened in Asia. We didn’t know for sure if it would be relevant here but we wanted to try, thus we were the first retailer to offer it. Also, our cast members are fountains of knowledge. They help us get close to our clients; they let us know what the customer is doing and looking for so we can build on those needs.

BI: As far as exclusives, are they still important to Sephora?


MA: Yes, of course. But the most important for us is innovation and differentiation of product performance, never at the expense of anything else. We want to ensure that we feel different and that the client feels that and to be able to offer the best. Our client is very sophisticated so we spend a lot of time really validating product performance.


BI: What’s the biggest challenge facing the U.S. beauty industry in 2013?


MA: The good news is that there is an appetite for beauty. The category has been a phenomenon. As an industry, however, we have to be very cautious that we aren’t just introducing a lot of “stuff” because there’s a lot of proliferation. And while brands are jumping into the hot categories, it’s really important that each brand continues to hone in on their differentiation. Staying true to who they are will make the difference.