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How Ulta Beauty Could Gain Customers, Revenue With Target Partnership

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How Ulta Beauty Could Gain Customers, Revenue With Target Partnership

A partnership with Target announced Tuesday will see Ulta Beauty launch store-within-a-store beauty salons — which could bring in a new customer base for the retailer.

Ulta's Partnership With Target: Ulta Beauty (NASDAQ: ULTA) announced a partnership with retailer Target Corporation (NYSE: TGT).

The deal will see Ulta Beauty at Target created as a shop-in-shop experience. The new stores will be around 1,000 square feet.

Ulta will launch 100 stores inside Target nationwide beginning in 2021, with plans to expand to hundreds more over time.

Ulta products will also be available on the Target website.

“Ulta Beauty at Target reflects further evolution in our omnichannel strategy, rooted in unlocking the potential of our physical and digital footprints,” Ulta Beauty CEO Mary Dillon said in a statement. 

Related Link: What 3 Ulta Beauty Analysts Are Saying About Cosmetics Retailer’s Q2

Why It’s Important: Ulta Beauty gains millions of potential new customers by bringing their products inside Target, one of the country’s largest retailers.

The inclusion of Ulta products on Target’s website also adds more potential customers as both retailers increase their online sales channel.

Ulta also gains access to Target’s same day pickup, drive up order pickup and Shipt same day delivery customers.

Instead of having to build out this ecosystem or partner with a delivery company, Ulta gains access to this huge, growing market.

Target could increase foot traffic into its stores with the deal. The new Ulta Beauty stores inside Target will be placed next to the existing beauty section. 

The placement could lead to higher sales across beauty products that already exist inside Target stores.

“In partnership with Ulta Beauty, we are able to expand our growing beauty business with new, exciting brands, an immersive experience, and loyalty benefits to transform how our guests shop for all their beauty needs,” said Target CEO Brian Cornell.

ULTA, TGT Price Action: Shares of Ulta Beauty gained 7.4% in Tuesday's session, closing at $265.49. Target shares were up 2.1% at $158.07. 

Courtesy photo. 

 

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