You've got a point.  I always over package a little too when I send stuff out, not for user experience but because I want like 0.03% possibility that the contents are damaged...   but I only send out a handful of parcels a couple times a month so my incremental costs don't add up to be much.  From the retail perspective, if their products were damaged, they would need to answer that many more emails and send replacements, which I'm sure just about cancels out their profit margin.  First thing ya learn in operations managment - "the cost of doing it right the firs time is always lower the the cost of doing it again"...   I've received probably 20 shower pods over the past 3 months in boxes and none of them were damaged, but I received 6 in the padded envelopes and one wasn't 'damaged' to the point of leaking, but it was crushed and no longer a dome shape.  That's just a silly shower pod but had it bean a compact or lipstick, they would have had to replace it.  Other thing they can hire a production consultant and implement an alpha test in one of the warehouses, using a box half the size of the standard one and see how much extra time is needed to select a smaller box, possible errors and needing to go back and exchange for the larger box, product damage due to lesser padding etc... and yes the user experience, does the smaller boxes translate as stingy or skimping on Sephora's part and if so, does that reduce their sales.  It's all in there!  Everything we do is like studied to nauseum...  I used to work for LeapFrog (toys) and we would have parades of little munchkins in groups of 7 or 8 come around to test our products all the time.  It was an adorable enviornment!