Ulta Beauty is expanding its consumer reach by opening a shop-within-a-shop in Target stores, a more permanent take on pop-up merchandising that retailers have adopted in recent years and a brick-and-mortar foray in an increasingly digital industry.
Calling it a strategic, long-term partnership “set to redefine beauty experiences,” the two retailers said the installations will first appear in more than 100 Target stores early next year. Target is clearing about 1,000 square feet for the Ulta counters in each store that will be “prominently located” next to the big-box retailer’s beauty section.
The concept, Ulta Beauty at Target, will give the discounter’s customers access to more than 40 well-known and emerging beauty brands that are not available at the Minneapolis-based retailer’s stores or online now. Neither company named which brands would be on shelves.
“In true Ulta Beauty fashion, we plan to inspire engagement through discovery and newness, so our goal is to offer a rotational assortment,” Ulta Beauty spokeswoman Eileen Ziesemer said in an email.
The decision to expand into Target stores gives Ulta another outlet for cosmetic, hair care and skin care guidance and catapults it into the “essential” retail category that allowed Target stores to stay open during pandemic-induced quarantines while Ulta stores were forced to close.
Ulta is following moves its larger competitor Sephora took with J.C. Penney beginning in 2006. Sephora has more than 500 locations in Penney stores and has long touted its partnership as a plus for sales. Sephora is owned by luxury brand company LVMH Moet Hennessy Louis Vuitton.
Shops-within-shops have a long history initially tied to manufacturers turning to retail stores as a means for marketing everything from candy to cell phones. The department-store segment widely popularized the concept of a store within a store decades ago by introducing sections with designer brands such as Ralph Lauren, DKNY and Armani into their stores.
As the retail industry continues to evolve with the unprecedented growth in e-commerce shopping and purchase alternatives that include home delivery, curbside pickup and buying online, pick up in store, retailers are struggling with drumming up innovative ways to heighten the shopping “experience” and bring foot traffic back.
In recent years, retailers such as Macy’s and Nordstrom have introduced other formats that have had varying degrees of success. Macy’s efforts with Story, for example, a curated store-in-store boutique concept that changed periodically to create a new “narrative” through merchandise has largely gone away since the department-store retailer said it was closing nearly half of them in February.
Retailers are also latching on to the millennial trend of purchasing slightly used apparel and accessories. Since the beginning of the year, a handful of retailers that include Nordstrom, Macy’s and J.C. Penney as well as Walmart, Gap and Madewell have hooked up with second-hand apparel site ThredUp to sell merchandise in their stores as well as online.
However they go about creating these partnerships, the goals are always the same for both sides: Magnify market share and brand awareness and develop new customer bases.
Ulta is knocking on the same doors. The Target partnership “builds upon our position as the beauty industry leader to further our omnichannel strategy and unlock new, seamless shopping opportunities,” Ziesemer said.
“We believe this speaks to two segments of guests — deepen our loyalty with existing Ulta Beauty guests and introduce new guests to our brand and experiences,” she added.
Target did not respond to a request for a comment, but Ziesemer sees the partnership as an extension of the retailer’s growing beauty business, she said.
If Ulta makes it into all of Target’s 1,900 stores, it will swell the Bolingbrook, Illinois-based cosmetic chain’s reach to a total of more than 3,000 physical stores nationwide. At the same time, the online influence through Target.com and its diverse customer base also will give Ulta a market share range it might never have been able to achieve on its own.
At the same time, the wider physical store footprint reinforces Ulta CEO Mary Dillon’s position on the importance of a strong brick-and-mortar presence, something she has plugged in recent conference calls and webinars since the onset of the COVID-19 pandemic.
Though her stores were not open to customers, she was able to keep business alive by quickly stepping up online shopping and curbside pickup channels. Now she’s taking it a step further by insuring there will be some in-store shopping power available if the COVID-19 pandemic leads to another round of quarantines or mass shopping center and mall closings.
“Ulta Beauty at Target reflects further evolution in our omnichannel strategy, rooted in unlocking the potential of our physical and digital footprints, creating more seamless shopping opportunities for our loyal guests and continuing to lead the beauty industry,” Dillon said in a statement.
“More than ever before, now is the time for innovation in retail,” she added.