Artemis Patrick, President and CEO, North America, Sephora Interviewer: Michal Lev-Ram, Fortune
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00:00So I know you've been with Sephora for a very long time,
00:04almost 19 years, I believe,
00:06but I want to take a step even further back.
00:09You had a really unique childhood and upbringing,
00:12and I'm wondering if you can share a bit about it
00:14with us today and how it shaped you as a leader.
00:16Yeah, happy to, and thank you for having me here.
00:20So I was born in Iran and lived there
00:23until I was about seven years old.
00:26My father was actually one of the pilots for the Shah.
00:28So in 1979, during the Iranian Revolution,
00:33we had to get out very quickly.
00:35And so my mother, my father, and I escaped to America.
00:39We came to Los Angeles.
00:41Actually, I didn't speak a word of English.
00:44I was put into an ESL class,
00:46and I learned more Spanish than I did English.
00:48So I was like, not a lot of Iranians here.
00:52So I was there, we were there for about a year,
00:56but unfortunately, my parents were having a lot of problems.
00:59My mom was very young when she had me,
01:02and my father had a really hard time
01:04dealing with this fall from grace.
01:07So after about a year, we moved to Northern California,
01:10and my mom decided to go back to Iran
01:15with, I think, the hopes of bringing me back there
01:17and sending for me.
01:18But she got there and very quickly realized
01:20that the country had changed a lot
01:23and was really not a place to raise little girls.
01:26So I was trying to figure out what to do,
01:28was trying to get actually back to America at that point,
01:31but it was during the Iranian hostage crisis,
01:33so she couldn't get out.
01:35And my father was really not equipped to take care of me.
01:38So I ended up in the foster care system
01:41and lived in a group home for about a year
01:44and then moved in with American foster parents
01:47when I was 10 in Northern California, and they raised me.
01:51Wow.
01:53Wow.
01:54Wow.
01:58What do you think you take from those days?
02:01I'm sure it's strengthened you in so many ways,
02:03but what do you kind of fall back on when you need to?
02:06Yeah.
02:08You know, I definitely know what it feels like
02:10not to belong, to feel different.
02:13I think it was Pralina yesterday
02:14who was talking about watching a lot of television.
02:17I can relate to that as an immigrant.
02:19I learned all of my English from TV shows.
02:22I'm still a L.A. Lakers fan, and people are like, why?
02:24I'm like, that's how I learned English.
02:26Like, you know, from watching the Los Angeles Lakers games.
02:30And so I think just, you know, being, feeling, you know,
02:34different, and looking different, and speaking different,
02:37and especially, and also with my foster parents,
02:40they didn't look like me.
02:41And that's, you know, I think it's really shaped me
02:44who I am as a person, but also who I am as a leader.
02:46And I really, truly believe in bringing in different thoughts
02:51and diverse ideas, and, you know,
02:53I think for the most part, people don't get up
02:55in the morning and think, I'm gonna do a bad job today.
02:58Like, everybody has a story, everybody wants to do good.
03:01And, you know, I think that as long as,
03:04as leaders, we're welcoming to that,
03:06it's really, really important to me.
03:07And I think, you know, it's not to say that, you know,
03:11you're gonna take everybody's opinions
03:12and always do what everybody says.
03:14Ultimately, your job as a CEO is to set the strategic vision
03:18and to create focused priorities and to remove obstacles.
03:22But how can you get there
03:23if you don't bring in diverse thoughts?
03:26So I'm gonna pivot to the business at Sephora, of Sephora,
03:30and I mentioned some of the growth,
03:32but we've seen so many different patterns
03:35in consumer behavior over the last few years.
03:37What are the trends that are driving growth
03:39at Sephora today?
03:40Yeah, you know, I mean, like you said,
03:42I've been there a long time.
03:45And so, you know, I've been through all of it,
03:47through YouTube, through Instagram, through, you know,
03:50and obviously TikTok is a big part of it,
03:53through social, for sure.
03:56You know, it's, for us,
03:57it's really about understanding the trends
04:00before they happen.
04:01And then social media is just a way
04:03that actually captures it.
04:04But, you know, it's not by an accident
04:06that a lot of the hot brands that are trending
04:09that are only sold at Sephora are on TikTok.
04:11I mean, you know, there's a method to the madness
04:14with our incredible merchandising and marketing teams.
04:17But certainly, that has, I think, democratized beauty,
04:20right, and the conversation around beauty.
04:22I mean, I always joke that, you know,
04:24thanks to brands like The Ordinary,
04:26my 14-year-old now knows what niacinamide is,
04:29and I couldn't even pronounce that when I was her age.
04:31So certainly it's, you know, I think opened up the appetite,
04:34the conversation around it,
04:35and especially around skincare.
04:37I think what Instagram did for makeup,
04:40certainly TikTok has done it for skincare.
04:43Yes, anybody here who has teenage tween daughters,
04:47yes, you know, they're really into their skincare routine,
04:51and there's smoothies.
04:53What are smoothies, by the way,
04:54for anybody who doesn't know?
04:56Well, yes, you gotta, you have to mix it,
04:58you gotta mix them all together.
04:59Yes, they go in the store,
05:00they mix up a bunch of stuff.
05:01They mix it all together, yeah, yeah.
05:03That's how you get the glow with the moisturizer.
05:04It's a whole thing.
05:06By the way, I've been doing that for a long time.
05:07So these kids are hilarious.
05:08I'm like, call it what you want, but yeah.
05:13Well, okay, so speaking of kids,
05:14there's been a lot of talk at the conference
05:16about Gen Z and Xennials, which I, Millennials,
05:20between, you know, this micro generation,
05:21which I didn't know existed,
05:24but I'm a part of, apparently.
05:26But I wanna hear more about Gen Alpha,
05:28and what does Sephora know about Gen Alpha as a consumer?
05:32Yeah, so I have a 14-year-old, so I definitely can relate.
05:35You know, the thing for us is, first of all,
05:37I mean, we do not market to this audience, right?
05:39And so it is really important for us
05:42to continue to remain committed to marketing
05:45to the appropriate age.
05:46You're never gonna see teenagers in our windows.
05:49In fact, I had a brand not that long ago
05:51who had a product that was not appropriate
05:54for a younger consumer,
05:55and we actually asked them to change the model,
05:57because even though it's not, you know, our brand,
06:00we're not comfortable putting, you know,
06:02young kids selling retinoids and retinols in our window.
06:06So we do believe we have a responsibility
06:08to make sure that what we sell is age-appropriate.
06:11We have over 25,000 beauty advisors
06:14across the United States and Canada
06:16who are highly educated.
06:18That has been the core in our DNA from day one.
06:21They are not commissioned.
06:23They are very unbiased.
06:24And so we do train on what's right for the skin,
06:27depending on the age.
06:28And at some point, you know,
06:30it is the responsibility of us as parents.
06:31Like me, as my 14-year-old,
06:33you will not catch my 14-year-old using retinol, right?
06:36And so, but it is incumbent on us.
06:39It's incumbent on our over 250, 300 brands
06:42to make sure that we're talking to the right audience
06:44at the right time about the right thing.
06:47So yes, there's been an influx of the younger generation
06:49coming into Sephora,
06:51and we really do do our best to encourage them
06:54to use the age-appropriate products.
06:57I wanna ask you about the retail strategy.
07:01You're in the midst of revamping a lot of your stores.
07:05What is the strategy there,
07:07and why so much focus on the retail footprint?
07:10Right, well, I mean, we've always had
07:12a beautiful relationship between the digital and retail.
07:16So we started our e-commerce business in 1999,
07:19kind of ahead of our time,
07:20but the stores have always been the soul
07:22and the DNA of our brand.
07:24I mean, our first store in 1998 was in Soho in New York,
07:28and it's now our number one store across North America.
07:31So the fact that it has sustained over 26 years,
07:34our first store in Canada opened 20 years ago in Toronto.
07:38So we took a step back post the pandemic,
07:41and I'll never forget, I was like,
07:43people aren't gonna come back and use testers,
07:45and people are like within three seconds
07:47or putting everything, and I'm like, ooh, okay,
07:49let's slow it down a little bit here.
07:50So, you know, I mean, I think that interact,
07:52beauty's always been tactile,
07:55and then that relationship with our beauty advisors
07:58and that relationship with each other
08:00as you're shopping Sephora.
08:01So we took a step back and we said, okay,
08:03our stores have been around for a long time,
08:05and our new stores look really, really pretty,
08:08but some of our older stores, not so pretty.
08:10And so we said, what would that take?
08:12And I think, you know, you hear a lot
08:14about retailers doing a store of the future,
08:16so they'll take, it's very much a design element,
08:18and they'll take one store, and it's design-driven.
08:20Usually you have the design team who kind of leads that.
08:24We said, okay, let's take a step back
08:26and make this a merchandising-driven project, right?
08:29And so how do people want to shop?
08:31What are the right brands?
08:32How should be a position?
08:35Where does beauty to go and minis and more go
08:38now that one in four consumers are shopping
08:40with a mobile POS?
08:42Are they gonna stand in a long wave like that?
08:44And what are the hot brands we want to pull forward?
08:46And so we created the, what we say, the ideal map,
08:51and it's actually in a lot of the stores
08:52that you see today that have been built
08:54over the last couple of years.
08:55And we are gonna go back over the next five to seven years,
08:58and we are embarking on the largest capital project
09:01in the history of Sephora globally,
09:03and we're gonna refurbish every single one of our stores.
09:06Because we feel that whether you're shopping
09:08in Boise, Idaho, or in Toronto, Canada,
09:10you should have the same beautiful experience
09:12no matter where you are.
09:14I'm gonna go to you guys for questions in a minute here,
09:17so please be thinking of them.
09:18But one more question for you on the retail footprint side.
09:24You're also experimenting with kind of mini stores
09:27under 4,000 square feet in urban areas.
09:30You've done this before, didn't quite work out.
09:33What's different this time?
09:34Yeah, so I was part of that project years ago,
09:36and we still have a few of those around.
09:38We had an urban concept.
09:40And our biggest learning was don't cut the assortment.
09:44I think what we did is we said,
09:45oh, we still have this big beauty studio
09:47and this cash wrap, but we'll just sell less brands.
09:50Turns out people wanna buy product.
09:52And so we said, okay, let's take this back,
09:54and what would it take for us to have a store
09:57that is about 15% smaller than our existing store,
10:00it's under 4,000 square feet,
10:01but still offer the exact same assortment?
10:03And so what we've done is we've reduced the backstage,
10:06and now we have more deliveries to that store.
10:09And then we also remove the traditional cash wrap.
10:13So everybody's at Mobile POS, but if you wanna pay cash,
10:16there's an end cap there that has this very small end cap.
10:20We've reduced the area for services.
10:23We actually launched three this summer.
10:25We were like, let's see what happens.
10:27One in Queens, New York, one in Brooklyn,
10:30and one in Toronto at The Well.
10:32And they have far exceeded our expectations.
10:34I actually went to the opening at the Queens store,
10:37and you would've thought you were at a party.
10:38It was bananas.
10:40People were dancing.
10:41I'm like, this is amazing.
10:43And then that same day, I went over to the Brooklyn store,
10:46and this is crazy.
10:47In the Brooklyn store, you can walk 10 minutes to the left
10:50and be at a regular Sephora,
10:52walk 10 minutes to the right and be at a regular Sephora,
10:55and that store is killing it.
10:57It is over 60% above plan,
11:00and over 60% new beauty insiders signed up
11:03within the first month.
11:04So six out of 10 people walking in
11:06did not already have a Beauty Insider account,
11:09and there's 10 minutes either way.
11:11So we believe that this is a really, really exciting concept
11:14that we're gonna look at more dense populations.
11:16This isn't gonna be thousands of stores,
11:18but when you think about New York, Toronto, Los Angeles,
11:20maybe even San Francisco,
11:22I think we're onto something here.
11:25Great, we've got a question over here.
11:27Hi, Betsebe, we met yesterday.
11:30First, for anybody who doesn't know,
11:32Artemis is a historical figure,
11:34Navy commander, fierce leader.
11:36You're living up to your name very well.
11:39It's fascinating.
11:40Please look that up.
11:41You've had a tumultuous childhood,
11:43and it's built resilience.
11:44It can also throw people off quite well,
11:46but you have turned to the other side of it,
11:47and it's made you a very strong female.
11:49How do you pass on those values to your children?
11:51Ah, I asked that myself.
11:54She's asked how I pass that to my children, my child.
11:57My husband also had quite a tumultuous upbringing.
12:00It's for a whole another time,
12:02but it's hard because we're both funny,
12:07because I tend to be sort of like, I didn't have anything,
12:09so I'm gonna give her everything she wants,
12:11and he's like, I had a hard life,
12:12and she's gonna work for it, and I'm like.
12:15So we've definitely taken the two different approaches
12:18of how you raise children
12:19when you've had tumultuous childhoods,
12:22but it's empathy.
12:26We talk about it all the time, it's empathy.
12:28I don't know how else to say it.
12:30We are constantly, I mean, it's be kind, say thank you,
12:35be thankful, we make sure that she understands.
12:40But at the end of the day,
12:41you don't fully understand until you're older.
12:44I mean, I definitely also, I had a lot of anger
12:46around what my mom, you know, my mom abandoned me,
12:49and all this stuff, and until I was older
12:50and I had a kid of my own,
12:52I didn't fully understand the sacrifice that she made.
12:55So what I always tell my husband is,
12:56you can't expect her to be any more than 14.
12:59And when she turns 15,
13:00you can't expect her to be any more than 15.
13:02Just keep teaching kindness, and be empathetic,
13:06and really at the end, they'll get there.
13:10Yeah.
13:11Yeah.
13:11Yeah.
13:12Yeah.
13:13Yeah.
13:14Yeah.
13:15Other questions for Artemis?
13:17Let me see, we have, can we bring a microphone over here?
13:19We've got a couple.
13:23Can you raise your hands again?
13:24Oh, there you go.
13:25Let's start at the front.
13:27Hi, Mona Sinha from Equality Now.
13:29I have a question about, I love Sephora,
13:31and I love that it's multi-generational.
13:33I love it as much as my kids do.
13:36How do you manage to keep that product mix
13:39so relevant to so many different customer groups?
13:41And now that I see that you're going into your own brand,
13:44and you're developing sort of a Sephora line,
13:47how does that fit into the mix?
13:49Good question, yeah.
13:50We've actually had Sephora collections since the beginning.
13:52When we launched Sephora in France was the first store.
13:56Even before that, when Sephora launched
13:58in Limoges, France in the 1970s,
14:01Sephora brand was its own brand.
14:03So that's always been part of our DNA.
14:05We're definitely stepping it up, I think.
14:06We look at it as an entry point.
14:09It's amazing quality, to be clear,
14:11for all of you with young ones.
14:13Sephora collection's amazing.
14:14It's part of LVMH, so it goes through the same rigor
14:17as every LVMH brand, just really good prices.
14:20So very good quality.
14:21So that's how we think about it.
14:22It's an entry point, great quality,
14:25and a way to enter the brand.
14:27And we're very proud of it,
14:28because it's what you take home.
14:30At the end of the day, you see the name.
14:32In terms of remaining relevant,
14:34listen, I mean, that is the secret sauce of Sephora.
14:37So if you take a step back,
14:39and when Sephora first came to America in 1998,
14:43similar to me, it was a bit of an outsider,
14:45and a lot of the big strategics
14:47didn't want to work with us.
14:48There was the big department stores.
14:50And so just by sheer survival,
14:53we had to work with these little indie brands
14:55and start in the kitchen, and we would start early,
14:57and we'd hear their stories,
14:58and we'd be in there trying the formulations
15:00and give feedback, and any brand
15:02that's ever worked with us,
15:03I see one in the audience here,
15:04knows that we really love getting in there
15:06and getting in the kitchen,
15:07and that allows us to build a brand together
15:09in many ways.
15:11So you think about, you take for granted
15:12brands like Too Faced, Urban Decay, Stila,
15:15these brands that were not household names
15:1928 years, 26 years ago.
15:21So I think that, to your question,
15:23it's really about getting in early.
15:26I see a CMO of Rare Beauty here,
15:28and I remember our very first meeting.
15:30It was goop in a jar and Selena Gomez,
15:32and it was like, whoa, and her passion
15:35for the Rare Impact Fund and her belief
15:37in giving back, and so we were like,
15:39wow, great founder, great team, good product,
15:41wow, and they give back as well
15:43to an authentic cause that's very, very real
15:46to the founder.
15:47You could not ask for anything more as a merchant.
15:49Now let's get in the kitchen
15:50and figure it out together.
15:52So it really starts very early.
15:55Do we have another question over here?
15:57Go ahead, please.
15:58Hi, Suzanne Ruan, I'm with McCormick & Company,
16:01and I was curious, well, first of all,
16:02thank you, because I have two bonus daughters,
16:04and you make Christmas shopping.
16:05Aw.
16:06I was curious, as you look at your professional
16:10career with Sephora, what's the biggest bet
16:13that you made that you'd look back and say,
16:16that was the one?
16:17For me personally, or for the company?
16:21Whichever one you want, personally or professionally.
16:23Yeah, well, I can quickly answer both.
16:28I think professionally, it was when I asked
16:29to be the general manager of Sephora and say JCPenney.
16:31So at the time, I had a whole e-commerce background,
16:34and I was like, what do I know about running a P&L
16:36and JCPenney, and it was so amazing.
16:41I stepped in right during the Ron Johnson time,
16:43so it was very, very tumultuous at JCPenney.
16:47And I remember the CEO at the time, our CEO, Sephora,
16:50he sent me a note, and it just had one line,
16:53and it said, Rome is burning, protect your house.
16:55And I thought, oh my gosh, what is going on?
16:58And I did, and I put my arms around the team,
17:00and we just focused, and we went forward.
17:03And I'm very, very proud of what we delivered
17:05over the partnership there, which ultimately then resulted
17:09in really, I think, deep understanding of how to work
17:12with another retailer, and I was very early on
17:15talking to Michelle about the Kohl's deal.
17:17So I think professionally, I wasn't sure
17:20I should take that job, and I think it really
17:22sort of turned the tide for me.
17:24And then I would say for us, there's so many decisions,
17:28there's so many brands we've launched that now, again,
17:31our household names, which is really, really exciting.
17:33But something that is, I think, meaningful to me
17:36and to a lot of the team was in 2020
17:38when Aurora James reached out to us
17:40to become part of the 15% Pledge.
17:43It was after the murder of George Floyd,
17:45and there was a lot going on, and we were at home alone
17:47on Zooms, and there were six women on this Zoom.
17:51And I'll never forget when we said, yes,
17:55we will be the first retailer to support the 15% Pledge,
17:57and the commitment that we made, and back then,
18:00we only had 3% of our assortment being sold
18:04by founders of color, by black founders,
18:07and today, we've doubled that assortment,
18:09and we've actually reached 15% Pledge in hair.
18:12So to me, it's a lifetime journey,
18:16and making a commitment to bring founders
18:18of diverse backgrounds is so critical to me.
18:22I talk about this all the time,
18:23that I have a daughter who has curly, coily hair,
18:26and she has no idea how lucky she is,
18:28because back when I was younger,
18:31I didn't have the right products,
18:32but that's because people with hair like me
18:34weren't making brands for people like me,
18:36and I wanna change that.
18:38Very, very meaningful note to end on.
18:40We'll have to get your smoothie recipe later,
18:43but thank you so much for joining us, Artemis.