![]() ![]() While Ulta doesn’t break out sales figures by category, CEO Mary Dillon said during the company’s third-quarter earnings call in March that comparable sales of prestige skin care, fragrance and cosmetics were up by 20 percent. But despite competition from Sephora, Ulta has proven it can win over prestige beauty market share: In November 2017, NPD Group reported Ulta had grown its prestige beauty category by 28 percent. Uniting mass brands like NYX and high-end brands like Nars under one roof can result in a clash, since different price points set different experience expectations for shoppers. “So to win, we look at our DNA: We have the unique proposition of bringing together the high, mid and low price ranges and assortments, and we’re laser-focused on continuing that strategy.” “It’s a very competitive landscape, and we are hyper-aware of what our competitive set is doing,” said Monica Arnaudo, svp of merchandising at Ulta Beauty. Newness is a big focus - the company launched 92 new brands in stores and online across all categories in the past year - but beyond brand launches, the merchandising team is working to elevate the mass shopping experience to make it easier for customers to navigate, try on and discover new product, to make shopping more consistent. The next merchandising and inventory steps it takes, then, are key. To maintain market share in an increasingly cluttered industry, Ulta is hinging its strategy on high-low shopping: It’s one of the few beauty retailers to sell both mass-market and prestige products in one place. It’s not even safe from fashion retailers, as they expand to sell cosmetics, lured by their Insta-popularity and high margins: From Forever 21 to Karl Lagerfeld, few fashion brands seem to be immune to the beauty boom. ![]() increased 40 percent year-over-year in 2017, according to One Click Retail, and its fastest-growing category within beauty was mass cosmetics, increasing by 60 percent. And never sleep on Amazon: Amazon’s total beauty sales in the U.S. In the drugstore, Walgreens and CVS are revamping those departments to follow the Ulta and Sephora merchandising and layout strategies. On the high end, Sephora has won over many beauty customers with bigger budgets. ![]() The speciality retailer that sells makeup, skin-care and hair-care products from both mass and prestige brands is warding off competitors, new and old, from all angles. ![]()
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