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Stage set for bigger beauty sales at Target, Kohl’s


Sephora store inside of a Kohl’s, Ulta Beauty store inside of a Target.

Source: Kohl’s; Target

Beauty has always been a popular holiday category. But this year, it is poised to grow even more.

They aren’t limited to candles and perfumes for their friends or family. Shoppers are looking to refresh their makeup routines, replenish makeup supplies and purchase new lipsticks for parties.

Also, consumers are heading back to stores in larger numbers — a shift that could lift sales in a category that’s driven by in-person experiences. You can try an item in a store before you buy, speak to an expert, or pick up stocking stuffers after looking at colorful displays.

It is happening right now Target Kohl’sThe stores will be celebrating the holiday season by focusing more on lipsticks, perfumes, gift sets, and other products. Target now has about 100 Ulta beauty shops in its stores. Kohl’s opened about 200 Sephora stores. There are many more coming.

A larger share of the beauty market is at stake as more consumers shop online, in big-box stores, specialty shops, and websites for their cosmetics, rather than relying on departmental store counters or drugstores. Premium beauty shops are a means for both off-mall and online retailers to increase foot traffic, encourage impulse buying, and eventually, drive sales in other departments. Target and Kohl’s will also have the chance to welcome back customers who haven’t been in one of their stores since March 2020.

Kecia Steelman, Ulta’s Chief Operating Officer, said that she believes holiday sales will reflect the desire for people to spend more on themselves and get “glammed up” more. According to her, the retailer bought more holiday-themed gift sets this year than last.

“As we’re coming through this pandemic, people that are holed up are ready to get out and celebrate —celebrate for themselves and each other,” she said in an interview.

According to Olivia Tong (managing director of equity research for Raymond James), beauty tends see a rise in holiday sales because it has such giftable options and easy-to buy sets.

Plus, as more families and friends gather over the holidays this year, she said, some people may invest a little more in getting ready — perhaps by springing for new eyeshadow, blush or a fragrance to spritz.

Tong stated, “In certain cases you may not have seen them for a while.” Maybe you’re extra careful with your appearances.” 

On Sunday, November 7, 2021, shoppers sat outside Sephora’s Las Vegas store, Nevada. They were carrying holiday shopping bags.

Bridget Bennett | Bloomberg | Getty Images

A bright outlook is key to a great time

According to The NPD Group, beauty is set for an exciting holiday season. According to the NPD Group’s September survey of 3,600 U.S. customers, over 25% plan to buy beauty products.

NPD also predicts the U.S. prestige-beauty industry to exceed pre-pandemic levels in 2019. NPD predicts that sales in this category will increase 25%-35% from last year. Top 2019 levels are low to mid single-digits. The category also includes brands sold primarily by departmental stores, beauty specialties stores, or online.

The fourth quarter of the year is critical for beauty retail businesses. NPD estimates that about one third of prestige sales in beauty come during the holiday period.

Steelman called it Ulta’s “Super Bowl”, and the “most important quarter” of the year. Last year, for instance, the fourth quarter drove about 36% — or more than a third — of Ulta’s total sales for the year. The three-month period accounted for 31% of Ulta’s annual sales in 2019.

Beauty has been dominated by hair and perfume. The sales of fragrance rose 63% from last year’s same time period and were up 25% from that period in 2019. The sales of hair products rose by 49% over 2020, and by 57% when compared to the same period in 2019.

Because fragrance is a luxurious gift, it will be an especially popular category for this holiday. More than 40% of all fragrance sales typically happen in the fourth quarter — and get a lift because the category is easy to shop, and makes for an expensive, last-minute gift, said Larissa Jensen, beauty industry advisor for NPD.

Jensen explained that during the pandemic consumers had turned to home fragrances (candles, perfumes, candles) as a way of escaping or indulgently enjoying a difficult time. She said that people who have received Covid-19 vaccines have been buying perfumes and other colognes to pamper themselves or start a new, fresh start.

Jensen indicated that hair is likely to be the focus of holiday shoppers as well, with luxury shampoos and hair masques being a means to take the spa experience back home.

Makeup is, however, still struggling to find a market. The sales of makeup have dropped 20% in the past two years, compared to January-September 2012. As more Americans avoid the office, and go to fewer social events, sales have suffered. According to NPD, lipstick sales have fallen 40% since mask wearing as part of Covid-19 prevention has hurt them. The category is showing improvement with sales increasing 19% from a year earlier.

Steelman reported that Ulta’s holiday shoppers so far have gravitated towards big-ticket items such as Dyson products for hair and gift sets. Although foot traffic has been increasing week by week, it is still below pre-pandemic levels for 2019.

Steelman stated that bringing back beauty customers to shops increases their loyalty and spending.

She said, “The greater the interaction that the customer has with our associates the higher the ticket.” It’s an excellent way to help us build the customer base. [shopping]Basket and build that relationship with guests who come into your store.”

Black Friday is a great day to get a boost

Target has increased its beauty focus and now offers mini Ulta shop in approximately 100 stores. You can also find gift sets at Target for the holidays.


Kohl’s has a younger, diverse customer base

Michelle Gass (Kohl’s CEO) stated that Sephora shops already attract younger and more diverse customers, which has resulted to increased sales. Sephora stocks a selection of approximately 125 items in its shops.

Gass reported that Kohl’s shops where Sephora stores have been opened has had a single-digit increase in sales. She said that more than 25% of Sephora customers are brand new to Kohls.

“When you’re over 600m high [Sephora shops]You can imagine the millions to millions of customers we are going to introduce next year. This is already meaningful, and it will only continue to grow,” she stated.

Jean-Andre Rougeot is the President and CEO of Sephora Americas. He said that by partnering with Kohl’s, Sephora has been able to attract new customers. He said that people who don’t live near a Sephora shop may find one within a Kohls store.

Sephora was once too pricey for some people who were budget-conscious. Rougeot explained that Kohl’s customers have been buying products across all price ranges and beauty categories, which indicates the shops are popular and their products are selling well.

According to him, makeup was the best-selling product in Sephora stores at Kohl’s. Skincare and fragrance were second.

“With the shift to more activity outside the home, comes more holiday parties and seasonal gatherings, which has resulted in an increase in demand for products shoppers will wear out,” Rougeot said. We are getting closer to the holidays and colorful products such as bright eyeshadow palettes or bold lips perform well. 

Beauty, the centre of style and frequency

Christina Henington, Target’s Chief Growth Officer, stated that Ulta Beauty stores have attracted new customers, but she refused to give sales figures. Target will invest in open a total of 800 shops over the next few years.

In the third quarter, beauty was a key sales driver for Target. The category saw a growth rate of mid-teens when compared to the previous year. This was in addition to similar sales in Target’s essentials, food, and beverages categories. This partnership doesn’t just cover beauty. This includes brands of prestige and mass-market prices.

Each Ulta shop within Target is about 1,000 square feet — roughly one-tenth the size of a typical Ulta store. You will find a selection of about 50 top brands in the shop, including Tarte and MAC. Target employees are certified by Ulta to work in the shop. Special holiday gifts will be available in the Target stores and online. These include mini hair products or items that can be used to pamper yourself at home.

Henington stated that beauty shops are a way to add vibrancy and color to big-box retail stores. They allow customers to smell fragrances, touch lotions, or consult a professional who can suggest foundations or offer other advice.

Henington spoke out about the retail’s beauty and personal-care offerings, saying that they stand out from other retailers. These range from daily items to more expensive products.

“When you look at everything, body washes to deodorants, fragrances you may want to wear on special dates, and all in between, you can see that we are able to connect with many guests due to the breadth and relevance of beauty,” she stated.

Plus, she said, shoppers can now buy even more items with a single stop at Target — like a lip gloss along with a new outfit, party appetizer or gallon of milk.

Hennington explained that Target has invested in the category “beauty lies at the center style and frequency.”

Steelman stated that Ulta can use Target’s shops to get new customers. They also give Ulta the opportunity to offer Ulta products to them and to encourage them to register for their loyalty program. Ulta offers loyalty points for Target shoppers who purchase from this shop.

She said, “It’s win for consumers because we’re meeting with them where they’re at.” Target has access to prestige brands they didn’t have previously, so it is a win. The brand partners are gaining greater access to consumers through a more branded approach. This is a win for them. It’s also a win for Ulta Beauty, as it helps to build our loyalty program and get them in our entire ecosystem.

Tong stated that department stores lost their relevance to some of the most important beauty buyers and were forced to close temporarily during the pandemic. This has allowed Target, Kohl’s, and other specialty brands to gain market share.

She stated that “people have not returned to department stores in the same way as they did in the past.” You can now buy in a variety of formats. [makeup]. This is why we continue to explore department stores. … It’s not just Macy’s and Bloomingdale’s or Nordstrom anymore.”