Cosmetics retail stores are experiencing returning in-store customers, and top stores are marketing to a wider audience through a number of changes.
Moet Hennessy Louis Vuitton (LVMHF) retailer Sephora will phase out its locations within JCPenney (PCJ) stores by the end of the year, while accelerating its new partnership with Kohl’s (KSS) stores. Sephora currently operates approximately 600 Kohl stores and will eventually operate in more than 1,000 department store locations.
Ultimate Beauty (ULTA) has been widely recognized as one of the best retailers of beauty products and accessories. Consumers have continued to shop beauty product lines at home during the pandemic, and now that customers are returning to the retailer, Ulta is considering what changes to make to meet new consumer demands and desires.
Ulta’s floor plan has always had mass-produced beauty and skincare lines on one side of the store and more expensive beauty and skincare products on the other side of the store. store. Hair care and accessories as well as the Ulta Salon were located at the back of each store.
Traditionally, Ulta has designed the store layout format based on price points. Ulta’s unique setup is one of the changes to new stores and locations that are slated for upcoming renovations. The changes come as consumers alter their shopping choices due to inflation.
Ulta has seen growth even during the pandemic, as self-expression and wellness become increasingly popular across all consumer demographics. Consumers continued to shop, but may have chosen to downgrade on brand choices.
The life cycle of these beauty and skincare products ranges from a few months to a few years. Daily use makeup like mascara and liquid eyeliners are good for about three months before they need to be replaced. Powder products like face powder and blush are good for about 1-3 years before they need to be replaced. Concealers, liquid foundations and cream foundations should be replaced every year.
Beauty and skin care products not replaced regularly can increase the risk of rashes and skin infections. Customers return to the store several times a year when they need to buy new products. Each time a buyer comes to Ulta, they have the chance to discover new products.
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Ulta partners with Target
Ulta and target (TGT) launched a partnership at more than 180 Target locations, similar to the Sephora/Kohl’s deal, that will allocate space for a more immersive beauty shopping experience than previously available at Target.
Ulta sees the partnership as a chance for consumers to treat the Ulta in Target experience as a taste of what a full Ulta shopping experience would offer. Once consumers get a taste of what it’s like to shop in an Ulta, they may be more likely to walk into a full-size Ulta store and try out the full retailer experience.
The products offered in the stores will cater to target consumer demographics, but also expose them to high-end beauty and skincare products that they may not have been exposed to before.
The new merchandising mix on the retail floor is designed for consumers to shop across brands and price ranges. As this is a change from the traditional buy-by-price retail plan, it gives customers the option to view products above and below their normal purchase price.
Since Ulta provides shoppers with the opportunity to try products, consumers can try a product that they did not have before due to the different selection of brands next to each other. A buyer who is comfortable spending more on products may find a similar product that suits them and is cheaper, and vice versa. A customer may also find a slightly higher priced product that they like more than their current line of beauty products that they purchase.
Ulta’s change may frustrate frequent buyers
Buyers generally buy out of habit. When Ulta changes the layout of the merchandise, shoppers who regularly buy based on price may find themselves a little confused when the new floor plan is set.
Until they get used to the new presentation, they might spend a little more time finding their favorite products. Ulta is willing to take that risk because those same customers might find a new product they wouldn’t have found before.