Will Ulta shops turn Target into a beauty destination?

Illustration: Ulta Beauty
Nov 10, 2020

Target and Ulta Beauty have announced a strategic partnership that will result in the launch of a “shop-in-shop” concept — Ulta Beauty at Target — that the two retailers believe will elevate their respective businesses.

The retailers are planning to debut the shops at more than 100 Target stores across the country as well as on Target.com beginning next year. The two retailers expect to open “hundreds more” of the in-store shops going forward. The 1,000-square-foot shops will be staffed by “expert-trained beauty consultants” selling a selection of “curated, prestige beauty brands.”

Ulta will train Target team members to work in the shops that will feature the beauty retailer’s  in-store digital tools, including its GLAMLab, virtual try-on technology.

Brian Cornell, Target CEO and chairman, touted the consistent traffic that his chain’s stores enjoy and its omnichannel fulfillment capabilities as factors that should contribute to the success of Ulta Beauty at Target.

Ulta Beauty CEO Mary Dillon said the deal with Target reflects an “evolution” in its own omnichannel strategy.

“More than ever before, now is the time for innovation in retail,” Ms. Dillon said in a statement. “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.”

Customers can use Target’s app and shopping on target.com to order Ulta’s products and can get free same-day shipping via Shipt on qualifying orders, or opt for Drive Up curbside or in-store pickup. Target has promised that its digital presentation of Ulta Beauty, which will go live in the middle to second-half of 2021, will be “immersive” and “engaging.”

The two retailers have between them more than 100 million active loyalty members from their respective Target Circle and Ultamate Rewards programs. The retailers are exploring opportunities to integrate the power of these programs to reward customers who shop the Ulta Beauty at Target concept.

DISCUSSION QUESTIONS: What do you expect from the Ulta Beauty at Target concept? Will it be a beauty category game-changer?

Please practice The RetailWire Golden Rule when submitting your comments.
"This is a great move, particularly at a time when the J.C. Penney/Sephora partnership has lost its punch."
"This is a pretty perfect partnership. They’re both leaders in their verticals. I expect that the digital union (with free same-day shipping) will be a coup..."
"There’s been a lot of crazy partnerships these last few years — Supreme and VF, JC Penney and Sephora, etc., but this one gets the Academy Award of partnerships to me."

Join the Discussion!

36 Comments on "Will Ulta shops turn Target into a beauty destination?"

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Mark Ryski

At first blush, it looks like a smart strategic partnership – win/win. The pandemic has not been kind to the beauty category, and while Ulta has fared better than others, they were still hit hard by the pandemic. The timing of this initiative is very helpful for Ulta and the bump in Ulta’s stock price on today’s announcement is a good proof point. As for Target, this is also a smart move. Beauty is an important category and partnering with Ulta will strengthen their position, however opening 100 stores-within-stores is still relatively small given their 1,900 store footprint.

Neil Saunders

Target’s beauty business has been growing rapidly thanks to store refurbishments and the addition of innovative brands. However Target is still not perceived by many consumers as a specialist player in beauty and, as such, it has missed out on growth within the more premium part of the market. Relative to other categories, performance in cosmetics has also been weaker. The addition of Ulta will help to remedy this as it will add a more specialist element to the proposition. The training of Target staff by Ulta specialists will also enhance customer service and allow Target to offer more advice and recommendations, which is becoming increasingly important to beauty consumers.

Art Suriano

I see this as an excellent move and it should be quite successful. Store-within-a-store has proven to be an excellent concept for many businesses, and this should be no different. My only concern in reading the article is the training. Target employees are not Ulta Beauty employees and although the intention that Ulta Beauty will train the Target employees is excellent on paper, it seldom works.

Typical things that could happen would be:

  • The Target employee scheduled to work in the Ulta Beauty Shop may be called by the manager to work elsewhere due to a staff shortage.
  • New employees hired at a later date may not be trained by Ulta Beauty staff but by Target employees.
  • There will be differences in how the two companies operate as well as employee job requirements.

So time will tell. Hopefully they will iron out any potential problems and allow this concept to be the big success it should be.

Carol Spieckerman
Carol Spieckerman
President, Spieckerman Retail
1 year 7 months ago

Ulta’s integration with Target’s app and convenience options is the icing on the cake. Target may not be as ubiquitous as Walmart’s multiple formats but Ulta is even less so. This partnership allows Ulta to get closer to its (similar) customers via Target’s brick and mortar footprint. Ongoing upgrades to its digital platform along with its growing portfolio of convenience capabilities elevate Target’s relevance as an RTR (retailer-to-retailer) partner and player. This is a great move, particularly at a time when the J.C. Penney/Sephora partnership has lost its punch.

Dr. Stephen Needel

I would have expected them to have tested the concept, not just roll it out. Lots of reasons for it to not work well.

Richard Hernandez
Richard Hernandez
Director, Main Street Markets
1 year 7 months ago

I think this is a very thoughtful collaboration much like what Sephora did with J.C. Penney. They definitely share the demographic and emphasis on beauty (Target has upped its game in the past few years). This will be interesting to track over a period of time.

David Leibowitz

This looks like a good strategy to cross-pollinate traffic and improve sales with brand recognition.

As customers become more comfortable shopping in-store, I think some recent behaviors will stick. Like reducing the number of overall stops on a shopping trip, leading to more intentional store browsing.

Traipsing across town to five different stores on a weekend shopping run may be a thing of the past. So the shop-in-a-shop (or dare I say “department store”), may be the solution. Stores like Target can then cater to multiple category needs (grocery, home goods, cosmetics) all in one basket.

Suresh Chaganti

The partnership makes a lot of sense for both parties. J.C. Penney has/had Sephora. This is somewhat similar. But given the large physical presence of Ulta with 1,200 stores, oversaturation and cannibalization of Ulta’s own stores is a risk.

Adrian Weidmann

This is a partnership that will be terrific for both brands. It will be interesting to see the impact that online shopping will have on overall sales. Will cosmetics shoppers still need the physical store to make their purchases? Having both share the same roof will certainly help both retailers get the most out of their real estate.

Jeff Sward

Wow. Target keeps assembling parts of the mall, the grocery store, the drug store and the electronics store all under one roof. In a time pressed, value-driven world, they truly are the department store of the day.

Brett Busconi
1 year 7 months ago

Great move by Ulta and also by Target. Puts a nice piece on the board that some of their competition will not have. I’m not sure that it will change the beauty category but think it certainly is a boon for both companies.

What does Walmart do? Can Costco find a way to play?

David Naumann
David Naumann
Marketing Strategy Lead - Retail, Travel & Distribution, Verizon
1 year 7 months ago

The Target and Ulta collaboration looks a lot like the J.C. Penney and Sephora collaboration. While J.C.Penney is not a role model for a lot of things, they were successful with the Sephora store-within-a-store concept. This looks like a winning strategy for Target and Ulta, as Target has the foot traffic and Ulta has a loyal following with great assortments, beauty experts and innovative mobile apps (Sephora Virtual Artist).

Raj B. Shroff

Target’s core audience, many of whom are moms, don’t have time for an extra stop at Ulta. However they will make time to stop at Target.

And ideally Ulta’s breadth will be curated by Target so the popular best sellers will be available at Target, thus making shopping easier.

Seems like a win-win with Target gaining a lot of beauty merchandise knowledge Ulta has acquired over the years.

Gary Sankary

These two brands are very complimentary in my opinion. I would guess their CRMs have a lot of overlap. I think this will be huge for both. And I do think it will be a game changer for the category. Target gets more credibility in a category where they were already strong. Ulta gets access to a new channel that makes it easier for their customers to fill in with their favorite Ulta items while on their Target run.

I do wonder about some of the Ulta stores that are in the same centers or near Target stores. Will they change, maybe offer more beauty services that customers can’t get at the Target shops? This will be really interesting to watch.

Harley Feldman

This deal should benefit both companies. Target will be upgrading its beauty products to a higher level and adding beauty expert knowledge and Ulta will be able to increase its customer base, delivery services and product sales. The beauty category will likely draw more women into Target stores which should benefit sales for beauty products and other categories.

Gene Detroyer

It strikes me as a nice idea with little or no downside. It will be a convenience at times for the Target shopper, but not likely a cosmetics destination. If one is not already planning to go to Target, the alternatives — Sephora, Blue Mercury, and even other Ulta stores, not to mention online — would be considerably more convenient.

Dick Seesel

Given Ulta’s footprint and mass appeal, this is a win for both companies. Target has devoted more resources to cosmetics in recent years, but Ulta’s brand equity will provide a halo effect over the beauty department. (Just consider how Sephora was one of the few bright spots at J.C. Penney over the last decade.) And — having been part of the cosmetics relaunch at Kohl’s 15 years ago — I appreciate the slow rollout of this complex category into only 100 doors. It’s a service-intensive and SKU-intensive business, requiring some time for Ulta and Target to smooth out the inevitable bumps in the road.

George Anderson

Moody’s VP and lead Target analyst Charlie O’Shea said in an emailed statement to RetailWire that the deal with Ulta Beauty is “credit positive” and will drive traffic in Target’s stores and on target.com.

“Beauty is an important category for Target, and this tie-up with Ulta will enhance its product line in many ways, including broader assortment and higher-end merchandise,” said Mr. O’Shea.“This is yet another meaningful example of the creativity the larger brick-and-mortar players are utilizing in their efforts to ensure increased store and website traffic.”

Melissa Minkow

Very interesting that Target had invested so much in market research and product development for its beauty branding only to turn it over to Ulta. Excited to see what they do together and wondering how technology will play a role since this is so in-store focused.

Ron Margulis

This is an excellent move by both retailers. Great synergy and opportunities for cross-merchandising. Expect Walmart, Macy’s and Kohl’s to respond quickly.

Heidi Sax

This is a pretty perfect partnership. They’re both leaders in their verticals. I expect that the digital union (with free same-day shipping) will be a coup, especially as the pandemic has increased Sephora’s delivery window. I’m not sure how the shop-in-shops will work, given Ulta’s average square footage and the breadth of their typical assortment. Either way, I’m here for it.

Mel Kleiman

There is agreement from all of the experts that this is a great move for Ulta and Target. If you look at the floor space they have given over to men’s shaving and hair products, I think they will find a greater return and customer appeal with this partnership.