SEPHORA IMPLEMENTS NEW ACTION PLAN
AIMED AT MITIGATING RACIALLY BIASED EXPERIENCES
IN THE U.S. RETAIL ENVIRONMENT
The retailer is making details of its national Racial Bias in Retail Study available
to all retailers as it calls for a more inclusive retail industry

January 13th, 2021 / San Francisco – Today, Sephora, America’s leading prestige beauty Omni-retailer, revealed thedetailed changes it will implement across all of its U.S. stores in order to mitigate racially biased experiences andunfair treatment for shoppers in the retail sector. This is the latest in a series of actions announced by Sephora tounderscore the retailer’s continued commitment to diversity, equity, and inclusion. The plan includes increased
diversity in its product offerings and workforce, more inclusive marketing programming, and greater accountability
through the institution of updated employee conduct policies. The decisions are based on the results of the firstever large-scale study on Racial Bias in Retail, commissioned by the retailer.

““At Sephora, diversity, equality, and inclusion have been our core values
since we launched a new kind of beauty retail destination in the U.S. over
20 years ago – but the reality is that shoppers at Sephora, and in U.S. retail more
broadly, are not always treated fairly and consistently,” said Jean-André Rougeot,President and CEO, Sephora Americas.
“We know that we’re in a strong position to influence positive changes in the retailindustry and society at large and it’s our responsibility to step up. We’re committed todoing all we can to make our U.S. retail experience more welcoming for everyone. Today,
we are proud to share a first-look at Sephora’s action plan designed to tackle the issue ofunfair treatment. We know it will be a journey, but we’re committed to holding ourselves
accountable to this mission for the benefit of our clients, our employees,
our communities, and the retail industry at large.”

Racial Bias in Retail Study Commissioned by SephoraThis first-of-its-kind national study was conducted over a year-long period, beginning in the fall of 2019 and endingin late 2020 and was designed to measure the issue of racially biased experiences in U.S. retail, and to identify
opportunities to end unfair treatment. Comprised of academic literature reviews, cultural insights analysis andcomprehensive qualitative and quantitative research*, the Racial Bias in Retail Study commissioned by Sephora offers
an in-depth look at this important issue.
SephoraThe research, first and foremost, underscores how pervasive the issue is for U.S. retail shoppers and employees:
Two in five U.S. retail shoppers have personallyexperienced unfair treatment on the basis of
their race or skin tone.

One in five retail employees report having personallyexperienced unfair treatment based on their race at their placeof work (20%)—either from customers or coworkers.

Black retail shoppers are 2.5x more likely thanwhite shoppers to receive unfair treatment
based on their skin color (44% vs. 17%), while
BIPOC shoppers are 2x more likely than white
shoppers to receive unfair treatment based on
their ethnicity (30% vs. 15%).

One in three retail employees have contemplated quitting
when they experienced racial bias and unfair treatment (31%for all employees; 37% for Black employees).

The research identified five primary “truths” that define retail shoppers’ experiences with racial bias, including:

Truth #1
Limited diversity across marketing, merchandise and retail employees results in exclusionary treatment before
shoppers even enter a store, and continues across their in-store journey.
Three in four retail shoppers (74%) feel that marketing fails to showcase a diverse range of skin tones, body types, and hair textures,
while two in three (65%) think stores fail to deliver an equally-distributed assortment of products catering to different shoppers’tastes and preferences. Moreover, nearly four in five retail shoppers (78%) don’t believe there is representation in brands or companies
that are owned by and made for people of color.

Truth #2U.S. BIPOC shoppers feel in-store interactions are driven by their skin color, appearance and ethnicity, yet retail
employees cite behavioral attributes, rather than appearance, as the basis for their interactions.
BIPOC retail shoppers are 3x more likely than white shoppers to feel most often judged by their skin color and ethnicity (32% vs. 9%). White
shoppers, on the other hand, are more likely to cite factors like age (27% vs. 12%) or attractiveness (13% vs. 7%), as the primary basis of thetreatment they face.
While shoppers feel they are being judged by their appearance, three in five (60%) retail employees surveyed cited behavioral attributes
rather than physical attributes when determining how to approach or interact with shoppers. This gap in perception results in a significant
disconnect between how shoppers and employees interpret interactions in U.S. retail.

Truth #3U.S. BIPOC retail shoppers use coping mechanisms, such as shopping online, to minimize or avoid an anticipatedbiased experience when in-store. While many customer experience needs are universal, BIPOC shoppers havesome needs that hold greater importance in helping them feel welcome.
The study also showed there are clear areas where retailers can focus efforts to make the shopping experience more inclusive andwelcoming for all. The findings show that BIPOC shoppers have some needs that hold greater importance in helping them feel welcome
compared to white shoppers in creating a positive in-store experience, including promptly being greeted and offering assistance whenshoppers enter the store, telling shoppers about new products, offers, and services, and having store associates who “look like me.”SephoraTruth #4
The majority of retail shoppers do not voice concerns about negative experiences directly to retailers – creating missed
opportunities for feedback and improvement, and impacting future sales as shoppers take their business elsewhere.
Only 30% of shoppers reacted actively to unfair treatment as a means of providing feedback to the retailer, such as publishing an online review
or social post about their experience, while fewer than one in five (15%) reported raising the issue with a manager or store supervisor. Evenamong those shoppers who did provide direct feedback, a majority (61%) were unsatisfied with the retailer’s response. These situations canhave permanent, economic consequences for a retailer, with 2 in 5 BIPOC shoppers (43%) saying they are unlikely to visit any store location
belonging to a retailer where they experienced mistreatment.

Truth #5
Meaningful and long-term action is most important to U.S. retail shoppers and employees.
Both expect retailers to show their commitment to change through new programs, training and tools designed to address these pervasive
issues. But this is not often the reality for many retail shoppers who have experienced unfair treatment: BIPOC shoppers are 3x less likely thanwhite shoppers to say the retailer addressed their experience with a change in store policy (34% vs. 11%). And while a majority (81%) of retail
employees recognize the importance of being able to service diverse shopper needs, fewer than one in three (27%) feel confident they canmeet them extremely well, with many expressing a desire for more training and education to address these gaps.

Sephora’s Action Plan
Coupled with the study’s findings and the retailer’s all-encompassing Diversity & Inclusion Heart Journey strategy, Sephorahas designed a preliminary action plan to tackle bias across all aspects of its organization via three key areas.

Marketing and Merchandising
Building on Sephora’s commitment to the 15 Percent
Pledge, the company will double its assortment ofBlack-owned brands by the end of 2021.
Prominently feature and advertise Black-owned brands
through a dedicated tab on the Sephora website, whichis already in progress.

Establish new marketing production guidelines that reinforce
consideration of a diverse array of backgrounds, identities,
ages and body types in our campaigns, social media,
marketing and more.
Continue cultivating one of the industry’s most diverse
influencer groups through the Sephora Squad.

Evolve the 2021 Accelerate brand incubator program tofocus exclusively on cultivating and growing BIPOCowned and founded brands.

The In-Store Experience and Operations
Roll out a new greeting system across all stores toensure a more consistent experience for all store
visitors upon entry.

Implement new client feedback mechanisms to better identify
incidents of bias, including those experienced by nonpurchasers.

Create new training modules required for all Beauty
Advisors that better define what client engagement
should look like at each point in the shopping
experience and what behaviors will not be tolerated.

Reduce the presence of third-party security vendors instores and utilize more in-house specialists, with the goalof providing better client care and minimizing shoppers’
concerns of policing.

Establish a D&I In-Store Experience Dashboard thatwill provide analytics on client service and feedback
to stores on a monthly basis to measure employee
training compliance and efficacy.

Implement procedural and operational changes to better
allow Beauty Advisors to focus solely on client service, versus
other tasks that can create a friction or misperception byshoppers.

SephoraTalent and Inclusive Workplaces
Build new recruiting, mentorship, community, andcareer development programs to support the sourcing,hiring and advancement of employees of color.
Building on its Pull Up For Change commitment,
Sephora will transparently share progress on employee
representation on a bi-annual basis at Sephora.com.
Ensure all corporate team members have D&I goals as
part of their annual performance metrics.

Update zero-tolerance policies that prohibit discrimination,harassment and other violations of our code of conduct toensure clearer communication, expectation and enforcement ofour policies for employees, including set outcomes if violated.
Ensure 100% participation with foundational Unconscious Bias
training for all new hires.
Increase the frequency and depth of employee trainings, adding
new modules that offer strategies to identify bias and exhibit
inclusive behaviors in the workplace.

In addition to the above, Sephora will continue to communicate its progress against these actions on a bi-annual basis
via a new D&I dedicated section of Sephora.com. Sephora also aims to make learnings and opportunities transparent
to other U.S. retailers who may wish to enact systemic change within their own organizations. Lastly, Sephora will
be partnering with leading trade and diversity organizations Open to All, RILA and Diversity Best Practices to ensure
dissemination to interested retail leaders.

““We’re proud of the work we’ve done thus far to make diversity, equity, andinclusion a priority for the company. We are stronger as a retail community
when we are serving the needs of all of our shoppers, and hope otherretailers will join us, with the ultimate goal of advancing inclusivity andimproving the retail experience for all.”– Rougeot

Learn More
To learn more about the Racial Bias in Retail Study commissioned by Sephora including downloadable materials detailing *methodology,
an infographic and our academic and research partners involved, please visit www.sephora.com/diversity-and-inclusion. To join themovement, retailers can reach out to sephoraIN@sephora.com. Special thanks to Sephora’s academic and research partners in theundertaking of the Racial Bias in Retail Study, including Dr. Cassi Pittman Claytor, Dr. David Crockett, Whitney Dunlap Fowler, Dr. Patricia
Raspberry, Kelton Global, Values Partnerships and LRW. Special thanks also to Sephora Equity Advisors and Partners, a coalition of 25
leading individuals and organizations in the field of social justice and racial equity.
Sephora US, please contact:
Jamie Bracci, Devries Global
JBracci@devriesglobal.com | 212-546-8555
ABOUT SEPHORA AMERICAS
Since its debut in North America over 20 years ago, Sephora has been a leader in prestige omni-retail with the purpose of creating aninviting beauty shopping experience and inspiring fearlessness in our community. With the goal of delivering unbiased shopping support
and a personalized experience, Sephora invites clients to touch and try 25,000 products from 400 carefully curated brands, enjoy services
at the Beauty Studio and engage with expertly trained beauty advisors in more than 500 stores across the Americas. Clients can also
experience Sephora online and through our mobile app, access the free-to-join Beauty Insider program and digital community, which
together enhance the experience of Sephora’s passionate clients. Sephora has been an industry-leading champion of diversity, inclusivity,and empowerment, guided by our longstanding company values. In 2019, Sephora announced a new tagline and manifesto, “We Belongto Something Beautiful,” to reinforce its dedication to fostering belonging amongst all clients and employees and to publicly strive for amore inclusive vision for retail in the Americas. Sephora continues to give back to our communities and advance inclusion in our industry
through our Sephora Stands social impact programs.
For more information, visit: https://www.sephora.com/about-us and @Sephora on social media. For media inquiries, please visit ourSephora newsroom or email pr@sephora.com
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