The next time you do a Target run for milk, cereal, toilet paper and shampoo, you can add a new item to the list: pricey makeup brands that weren’t available there before.
That’s because the chain is opening Ulta Beauty mini shops in August in more than 100 Target locations nationwide and online, which will bring more than 50 prestige skincare and cosmetic brands like Clinique, MAC Cosmetics and Smashbox into its stores for the first time.
Target (TGT) announced last November that it was partnering with Ulta on the shops. It said Wednesday it plans to roll out the 1,000 square-feet Ulta Beauty shop-within-a-shop to 800 locations in the coming years.
It’s a good time for Target to expand its beauty offerings given that makeup is seeing a comeback as more people get vaccinated and the pace of social interactions picks up.
Target has been growing its beauty business over the last few years by adding newer, affordable brands to its aisles.
“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,” said Neil Saunders, retail analyst and managing director with GlobalData Retail. “The partnership with Ulta should help Target elevate its proposition in beauty to grab a greater share of wallet from shoppers.”
The deal is expected to help Ulta (ULTA), which sells a mix of drugstore beauty and pricey brands that aren’t normally found in big box stores, reach a mix of younger Gen-Z consumers, many of whom are budget shoppers and others who are prepared to pay a premium for products with ingredients they perceive as higher quality.
The partnership poses some risks, too, especially if the new concept doesn’t resonate with Target’s bargain shoppers.
“It can be hard to get consumers to trade up to premium beauty, especially when they are already spending a lot during their trips to Target,” Saunders said.
Target said the Ulta mini shops will be staffed by Target workers trained in high-end cosmetic and skincare brands by Ulta.
Ulta’s rival Sephora is also doing something similar through a collaboration with Kohl’s. (KSS) It’s set to open hundreds of Sephora mini shops inside of Kohl’s, beginning this fall as it, too, seeks to draw in more consumers.