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The creation and evolution of Sephora’s e-commerce business.

It’s Friday, and you can consider this your official permission slip to procrastinate during that weird limbo between the holidays. Instead of pretending to work, take our quick State of Stores survey, which takes less than five minutes, and enter for a chance to win a $250 AMEX gift card while helping shape an upcoming Retail Brew report.

In today’s edition:

—Erin Cabrey, Vidhi Choudhary, Andrew Adam Newman

BEAUTY

Sephora.com circa October 2000

Sephora.com via Internet Archive Wayback Machine

Editor’s note: We’re rerunning stories this week from our yearlong Quarter Century Project, in which we examined the last 25 years in retail.

In the late ’90s, US consumers seeking prestige beauty products headed to department store counters to, say, spritz Clinique Happy perfume or swatch Bobbi Brown lipsticks. That was until a French retailer called Sephora shook up the beauty industry, first with its open-sell concept retail stores in 1998, and then, with something even more groundbreaking—its own e-commerce website—at the turn of the century.

As the LVMH-owned beauty retailer worked to grow its US presence after opening its first store stateside in New York City, Sephora.com debuted its e-commerce transaction abilities in the US on October 14, 1999. At the time, e-commerce was “a new frontier,” Howard Meitiner, Sephora USA’s then-president and CEO, told Retail Brew. “Nobody really knew what the future was going to be.”

Sources told WWD at the time that the site was anticipated to garner $20 million in sales in year one. Flash forward a quarter-century, and Sephora.com has become Sephora’s largest North American store, it says, offering 340 brands and 45,000 products, and generating $3.3 billion in revenue in 2023, per ECDB, while the US online beauty industry has surpassed $30 billion in sales.

“What [Sephora.com] did is it validated that this new thing called e-commerce was a perfect vehicle for beauty products,” Meitiner said. We’re looking back at the site’s early days—and where it’s going next.

Keep reading here.—EC

From The Crew

DTC

Shopify app

Cheng Xin/Getty Images

It was the summer of 2006. Harley Finkelstein was a law student at the University of Ottawa. He went to law school on the advice of a mentor who said he should treat law school like a finishing school for business and entrepreneurship. And he did. During one of his tax law classes, Finkelstein hit the launch button on his Shopify store.

About 20 years later, Finkelstein is now president at Shopify, but was one of the first merchants to start selling on this very platform. He recalls it was an “aha moment” that pretty much changed his life. “That was the magic of Shopify,” he said. “When you take someone with ambition and you mix it with this magical software, you end up with a life-changing opportunity,” Finkelstein said in an interview with Retail Brew.

Shopify launched in 2006 with its first ever store called Snowdevil. But it wasn’t until 2009 that the Canadian software giant found its groove. The launch of its app store essentially opened up Shopify’s ecosystem to third-party developers. Today, that same app store is a sheet of 16,000 apps. This marked the beginning of Shopify’s evolution from a basic tech company to a major e-commerce platform. Other key milestones include the 2014 launch of Shopify Plus, an advanced e-commerce platform for larger merchants, and the 2017 introduction of its checkout feature Shopify Pay.

Overall, Shopify has hit several others—it went public, moved into physical retail, payments, merchant solutions, and more. Today, the platform accounts for 12% of all e-commerce in the US. It provides merchants with multiple services to operate an online store, from e-commerce website hosting and inventory management to payment processing. But it was the Covid-19 pandemic that turbocharged Shopify’s growth and made it a true story of the 21st century.

Keep reading here.—VC

E-COMMERCE

Amazon help me decide button

Amazon

We asked our reporters, who play so well with others, to choose a favorite story from 2025 by a Retail Brew colleague.

Working at a trade publication, we get a barrage of pitches for “solutions” to various challenges retailers and retail brands might face in connecting with customers and suppliers.

And so it was that Vidhi Choudary, who has the unenviable task of staying on top of the myriad strategic developments and technological sorcery at Amazon, came to write about a new AI feature on the retailer’s app, “Help Me Decide.”

While the object of the tool is to help shoppers looking at similar products not be paralyzed by choice (aka decision fatigue), an analyst Vidhi interviewed noted that if Amazon customers were baffled and overwhelmed by options, it was largely Amazon’s doing. Specifically, eMarketer’s Sky Canaves pointed to Amazon’s sponsored results, where brands can pay to be listed as top search results even when they don’t quite meet all the search criteria.

It’s exactly the sort of insight we hope for when we set up analyst interviews, and in Vidhi’s story it lands like this:

“Amazon has created this situation of overwhelming shoppers with sponsored listings that don’t necessarily match what they’re looking for, and we see this especially with searches for specific brands or products that aren’t sold on Amazon,” Sky Canaves, principal analyst of retail and e-commerce at eMarketer, told Retail Brew.
Instead of seeing a “no results” message, they’re shown ads from sellers who paid for those keywords, she added: “This is now part of Amazon’s efforts to improve the shopping experience from one that has deteriorated over time as a result of the sponsored listings.”

Read the original story: Amazon’s latest AI bet is about helping people ‘decide’ what to buy—AAN

SWAPPING SKUS

Some retail reads from our sibling Brews.

Lip-top shape: Why Chipotle and Wonderskin Beauty brought back “Lipotle” lip stain. (Marketing Brew)

Mass backwards: Amazon is trying to figure out how to sell mass-market brands at Whole Foods. (Morning Brew)

We share your pain: Researchers and trade organizations reactions to the Trump administration drawing a link between Tylenol and autism. (Healthcare Brew)

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