Beauty Retailers Spur Growth with Omnichannel Integration
The cosmetic industry is growing faster today than ever before with an estimated market value of almost $805 billion by 2023. It is expected to grow at a compound annual growth rate (CAGR) of 7.14% from 2018 to 2023. Mass retailers like Target and Kohl’s are investing more in beauty and hoping to grow their market share in makeup, nail products and perfumes.
- Target has partnered with Ulta to brings its best-in-class beauty authority to millions of guests who love the ease and convenience of Target’s one-stop shopping experience. It also provides beauty brands an opportunity to expand and grow in a new, industry-leading omnichannel retail experience.
- Kohl’s and Sephora partner to bring a transformational, elevated beauty experience to Kohl’s from the top global name in beauty. In the fall of 2021, Sephora will bring its beauty experience with more than 100 brands to Kohl’s.
Ulta Beauty will Debut at Target in 2021
Target Corporation and Ulta Beauty announced a strategic, long-term partnership to transform the beauty landscape with Ulta Beauty at Target. The “shop-in-shop” concept will offer established and emerging prestige brands online and in select Target locations nationwide beginning next year.
In recent years, Target has reinvented its beauty business, including expanding its assortment and creating an engaging in-store shopping experience. The investments have resulted in strong category sales and market share gains. Similarly, as the nation’s leading beauty destination and category market share leader, Ulta Beauty has strong brand awareness and is a top destination for discovery and services, connecting meaningfully with teens and the growing, influential Latinx audience.
Target and Ulta Beauty, two trusted retail leaders that excel in curation, omnichannel engagement, and guest-centric experiences will together create a new way for beauty enthusiasts to discover exciting prestige brands. The partnership brings Ulta Beauty’s best-in-class beauty authority to millions of guests who love the ease and convenience of Target’s one-stop shopping experience. It also provides beauty brands an opportunity to expand and grow in a new, industry-leading omnichannel retail experience.
“The durable strategy we have built has made Target a top retail destination. The ease and convenience of our stores and fulfillment services provide broad reach and relevance for the curated brands our guests love. In partnership with Ulta Beauty, a company that shares our deep guest focus, we are able to expand our growing beauty business with new, exciting brands, an immersive experience, and loyalty benefits to transform how our guests shop for all their beauty needs.
Brian Cornell, chairman and CEO, Target
Ulta Beauty at Target
Ulta Beauty at Target will debut at more than 100 Target locations starting in 2021, with plans to scale to hundreds more over time. The planned locations will complement Ulta Beauty’s current store footprint, welcoming new guests to the brand and building upon Target’s existing assortment of beauty options.
“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. More than ever before, now is the time for innovation in retail. This partnership is an amazing way to further reimagine guest experiences with a partner who shares our company values. We are thrilled to bring our beauty expertise, unparalleled assortment and digital innovation to life in a new channel to delight and deepen loyalty with our existing guests and introduce Ulta Beauty to new guests.”
Mary Dillon, CEO, Ulta Beauty
Branded Shop-in-Shop
The distinctive, branded shop-in-shop will operate as an extension of the welcoming Ulta Beauty experience, mirroring the retailers’ existing stores and designed to discover established and emerging prestige brands. With approximately 1,000 square feet of retail space, Ulta Beauty at Target will be prominently located next to the existing beauty section.
To bring Ulta Beauty’s industry-leading expertise and established guest-centric experiences to life, the company will train newly hired Target team members to serve as experts on prestige beauty offerings, aligning to Target’s focus on providing guest service with deep product expertise. The shop-in-shop is expected to be enhanced with Ulta Beauty’s immersive, in-store digital discovery tools such as GLAMLab, a virtual try-on tool that provides safe trials across beauty categories.
Elevated Ulta Beauty Online Experience at Target
Guests who shop Ulta Beauty at Target online will enjoy free shipping available for qualifying orders as well as Target’s industry-leading, same-day fulfillment services, Drive Up, Order Pickup, and Shipt same-day delivery at participating store locations. As always, Drive-Up and Order Pickup are free on all orders.
The online experience on Target.com and the Target app will reflect the look and feel of the elevated Ulta Beauty experience for an immersive, engaging way to find beauty favorites and new products. The Ulta Beauty at Target assortment will be available on Target.com and in select stores in the second half of 2021.
Partnership Rewards Loyal Customers
Together, the two leading retailers have more than 100 million active loyalty program members across Target Circle and Ultamate Rewards. In addition to bringing guests enhanced offerings and expertise, the partnership will seek to create compelling, integrated opportunities to harness the power of these loyal guests and reward them when they shop at Ulta Beauty at Target.
According to Ulta’s 2019 annual report, Ulta expanded membership in its loyalty program by 8%, and membership in the Diamond and Platinum levels grew faster than the overall portfolio.
Average sales per member also increased, driven by the growth of the elite membership, the expansion of the Ultamate Rewards Credit Card program, and increased omnichannel shopping. With more than 34 million active
members, Ulta built a differentiated loyalty program that engages guests and provides Ulta with valuable customer insights. More than
80 percent of Ultamate Rewards members shop in-store only. In 2019, the percentage of members who shop online and in-store increased to
just over 12% of total members.
Ulta’s Omnichannel Marketing Vision
Ulta’s omnichannel marketing vision is to personalize messaging, communication, and experiences across every touchpoint: in-store, online, and through digital (including mobile) and print channels.
The partnership between Ulta Beauty and Target is set to redefine beauty experiences, creating new opportunities for guests and brand partners and to strategically and collaboratively lead the retail industry forward.
Sephora on Kohl’s Launch Omnichannel Partnership in 2021
Kohl’s and Sephora are partnering to create a new era of elevated Beauty at Kohl’s, marrying Kohl’s expansive customer reach and omnichannel convenience with Sephora’s prestige service, product selection, and exceptional beauty experience.
“Sephora at Kohl’s” will be a fully-immersive, premium beauty destination, designed within a 2,500 square foot space and prominently located at the front of the store. When the first 200 locations open in Fall 2021, the Kohls.com online beauty selection will also convert to exclusively showcase an expanded assortment of Sephora’s prestige product offerings. The partnership will expand into at least 850 stores by 2023, offering an expansive footprint, a wide-reaching customer base and unmatched visibility for Sephora’s brand partners within the prestige environment in which they thrive.
Sephora is the largest specialty beauty retailer in the world and the industry’s most renowned global innovator. With its cutting-edge curation of brands and emerging categories like Clean, Sephora will bring its unique, playful trial and immersive prestige beauty experience, with more than 100 carefully curated beauty brands to Kohl’s 65 million customers across the U.S. Kohl’s, with a deep focus of serving the everyday needs for the whole family, is reimagining and accelerating the company’s ambition to be the most trusted retailer of choice for the active and casual lifestyle.
Transformational, Elevated Beauty Customer Experience
“The Kohl’s and Sephora partnership will bring a transformational, elevated beauty experience to Kohl’s from the top global name in beauty,” said Michelle Gass, Kohl’s chief executive officer. “This new collaboration is an excellent example of two customer-centric, purpose-driven companies leveraging each other’s strengths to make aspirational beauty far more accessible to millions of customers all across the country. It’s an extraordinary time of change, and I am thrilled to partner with Sephora, a brand that shares our values and our passion for innovation and reinvention. Today’s announcement is a perfect illustration of the bold moves we are making at Kohl’s to accelerate our growth and reimagine our future for the next era of retail.”
“At Sephora, delivering a strong client experience through passionate employees is at the heart of who we are, and we are thrilled to find a partner who shares this identity. This is not a pop-up collaboration, but an investment our brand partners can rely on for the long-term; as a company with a history of sustained decades-long partnerships, Sephora has every confidence in the future of this collaboration and the unique experiences it will bring to consumers across the U.S.,” said Jean-André Rougeot, President & CEO of Sephora Americas.
“Our partnership will be built on expanding our complementary reach and scale in-store and online, creating customer-centric, prestige experiences, collaborating on new innovations, and living our shared values. We fully believe Kohl’s is the ideal partner to bring this vision to life.”
Jean-André Rougeot, President & CEO of Sephora Americas
“I am delighted by this new partnership which is perfectly aligned with our worldwide vision,” said Martin Brok, Global President & CEO of Sephora. “Great brands are always looking for new ways to serve their customers and innovate, even in dynamic times. With Kohl’s we will be able to bring Sephora closer to where our customers want us to be, offering them one transformative beauty experience that integrates our prestige product offering, our values and our communities, in a place where they come to get inspired and fulfill their lifestyle needs. This partnership also shows our confidence in the future of omnichannel retail and ideally positions both Kohl’s and Sephora to seize tomorrow’s opportunities, today.”
Expanding Reach and Scale with Sephora at Kohl’s and Kohls.com
Sephora has 500 of its 2,600 stores in the Americas and Kohl’s has more than 1,150 locations in 49 states, serving 65 million customers, with very limited overlap between the two store networks. This combined offering of at least 850 Sephora at Kohl’s locations by 2023 will draw new and younger customers to Kohl’s and will bring the Sephora experience to millions of new shoppers and existing members of the Sephora beauty community, who may not live close to a Sephora location.
Sephora at Kohl’s shops will replace Kohl’s current in-store beauty assortment and their positioning at the front of the store will provide maximum exposure for Sephora’s brand partners. Exterior signage at locations that feature the in-store shops will display both Kohl’s and Sephora branding. These locations will be selected based on existing Sephora store proximity, market opportunity, and customer insights.
Online, the Sephora at Kohl’s experience will launch on Kohls.com in Fall 2021, making Sephora the exclusive beauty partner on Kohls.com.
Creating Customer-Centric, Prestige Experiences
At Kohl’s, Sephora will offer customers its signature Sephora experience, with a unique range of makeup, skincare, hair, and fragrance brands. The stores will also deliver Sephora innovations in Clean beauty and self-care. Sephora’s high-touch customer engagement will prominently feature testing and discovery zones that serve up a rotating assortment of new, emerging or trending products, surprising and delighting customers every time they shop.
The shops will be staffed by Sephora-trained Beauty Advisors, who will deliver the excellent customer service Kohl’s is known for with the deep beauty expertise, consultations and assistance in product discovery that Sephora clients love.
Sephora purchases at Kohl’s and Kohls.com will be eligible for Beauty Insider rewards benefits, as part of Sephora’s award-winning loyalty program.
Kohl’s Customers Enjoy Beauty Insider Benefits
Kohl’s will also offer the added convenience of easy in-store returns, store pick-up, and curbside pick-up. Sephora.com and Kohls.com will also integrate their e-commerce experiences, allowing Sephora.com shoppers to find the nearest Sephora or Kohl’s locations that have their beauty products available.
A Partnership Built on Shared Values
Both companies share a passion for innovation, integrity and a pioneering customer experience. With a shared commitment to serving and celebrating their customers and employees, Sephora and Kohl’s look forward to jointly building this new long-term, powerful partnership. Sephora and Kohl’s commitment will provide brand partners with a larger platform to grow their brands, and add even more convenience and value to the Sephora and Kohl’s beauty communities.
Filed under: LoyaltyBlog