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Sephora and Ulta Beauty have dominated beauty specialty for a while and appear destined for more head-to-head battles.
Sephora was founded in France in 1970, acquired by LVMH in 1997 and opened its first U.S. store in 1998. The company now has more than 460 standalone stores across North America, as well as another 660 inside J.C. Penney locations. Thirty-five are set to open in 2019.
Founded in 1990, Ulta closed last year with 1,174 U.S. locations. About 80 new stores will open this year.
Both chains earn acclaim for their social media outreach, AR-driven try-on experiences and popular loyalty programs.
The primary difference between the two is Sephora’s traditional focus on prestige beauty products only carried by department stores and Ulta’s on mass and professional hair care brands. Those lines, however, are blurring.
Sephora has brought in more lower end offerings through its private labels and introduction of lines such as ColourPop cosmetics. Ulta has gained access to labels such as Chanel, Nars and Shiseido; prestige now accounts for 55 percent of its mix.
Beauty expert Hana Ben-Shabat told Forbes last year, “Where they once appealed to different customers — Sephora, younger, urban affluents, and Ulta, an older, suburban shopper — Sephora is making a big effort to appeal to older customers with brands like Estée Lauder and Lancôme. Ulta just opened a New York City store and now has more prestige and indie brands to appeal to younger consumers.”
Ulta’s 9.4 percent comp gain in the fourth quarter was particularly helped by securing an exclusive on Kylie Cosmetics, Kylie Jenner’s makeup line, that was previously only available online. Securing digital exclusives remains a priority. Ulta’s fans also call out its broader mix of high/low offerings as well as the discounts and free samples driving its rewards program.
For its part, Sephora still has a higher cachet that helps land more prestige exclusives as well as prime real estate, including a store soon to open at New York's Hudson Yards. Deborah Weinswig, CEO of Coresight Research, last year told the Business of Fashion, “Sephora is much stronger than Ulta in consumer perception of its own brand.”
The two also face a number of newer competitors in the space, such as Glossier, Bluemercury and Amazon.
- Cosmetics Retailer Turns to AI to Enhance Customer Experience – The Wall Street Journal
- Are digital try-ons the new makeup counter? Ulta's CEO thinks so ... – The Ladders
- Sephora Builds Lower-priced Skin-care Offering With the Inkey List – Women’s Wear Daily
- Sephora, Ulta And The Battle For The $56B U.S. Beauty Retail Market – Forbes
- Sephora vs Ulta: The Battle of Beauty’s Retail Giants – Business Of Fashion
- Ulta Has Cracked Beauty’s Secret – The Wall Street Journal