Target to Add Ulta Mini Shops Inside Hundreds of Stores

Businesses have had to continue to make adjustments to the way they operate and how they generate engagement with customers in 2020. This has become especially true in retail, where massive closures have left many retail companies searching for new ways to get their products to the consumer. Ulta Beauty has done just that with their new Target partnership. The beauty company will now have its products put in front of millions of more customers, expanding their reach to increase sales. So, how have Target and Ulta Beauty been faring during the pandemic, and what does their new partnership entail?

Target and Ulta Beauty in 2020

Target and Ulta Beauty have had extremely different years in 2020, to say the least. Beginning with Target, after being classified as an essential business, the company was allowed to keep all in-person stores open throughout the entire pandemic. As a result, Target has had one of their best years on record so far. In fact, in the company’s most recent quarterly report, Target generated a stunning $22.975 billion in revenue. That number represents an increase of 24.72% in comparison to the same quarter in 2019. Even further than this, Target’s profits in this quarter rose by an astounding 80.3%, up to $1.7 billion. Combined sales from online and in-store purchases reached an all-time high, rising by 24.3%. Additionally, Target’s curbside pickup program saw an astounding 700% growth over the quarter, while its online delivery shot up by 350%. Target undoubtedly benefited heavily from being one of the few stores open throughout the pandemic, and their large selection of products became a solid asset for the company as customers looked for a one-stop-shop to minimize the risk of infection.

In contrast to Target’s performance during the coronavirus pandemic, Ulta Beauty has certainly struggled. Their sales lagged as a result of physical locations being closed and government lockdowns reducing the need for beauty products as attending social settings were prohibited or restricted. In fact, in their most recent quarter, Ulta Beauty earned $1.22 billion in revenue, a stiff 26.32% decline compared to the same quarter in 2019. These news are further proof of negative trends according to a recent survey stating that 70% of consumers have scaled back their use of makeup this year, leading to uncertainty over how quickly Ulta Beauty will be able to recover in the future. Ulta’s decision to partner with Target is not only an important step but a necessary one to turn its current fate around.

The Deal Between Target and Ulta Beauty

The agreement between Target and Ulta Beauty will see possibly hundreds of Ulta Beauty mini shops opening up inside different Target locations. Each shop will be about 1,000 square feet and will be run by Target employees who have been trained by Ulta. While it is clear that Ulta Beauty ultimately needed this agreement more to boost slagging sales, it appears to be a mutually advantageous decision. As a result of their deal, both companies will be exposed to a larger audience of customers as they will combine to have over 100 million loyalty rewards members between Target Circle and Ultamate Rewards. For Target, having a dedicated section for high-quality beauty products, particularly skincare and hair products, will be a major step toward creating the most holistic shopping experience possible at the store. As for Ulta Beauty, being featured prominently in a major store that is currently going through its most valuable period of time in history will only spike sales. The mini-stores are set to open sometime in the second half of 2021.

Final Conclusions

The deal between Target and Ulta Beauty represents a solid partnership between two companies set to benefit from their decision. While Target has done extremely well in 2020, bolstering its beauty products and skincare can only be a good thing as more customers are looking for these items with the world once again slowly opening up. As for Ulta Beauty, having prominent placement in a store that has been as successful as Target is a major boost for a company that has seen a very difficult 2020 both with their own store closures and the drop in sales. While the financial details of the agreement are not yet clear, it appears to be a strong idea that should benefit both participants.

Thomas Price

Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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