Mass-Market Beauty Showing Signs of Life. Will It Last?

In the last year, Walmart announced an accelerator program called Walmart Start, which resulted in five brands getting a shot—Dossier, a perfume brand; Undefined Beauty, a BIPOC-based skincare and wellness line; PaintLab, a press-on nail that mimics gel manicures; Pardon My Fro, a Black-female-founded and owned haircare brand; and The Hair Lab by Strands, a customized haircare brand. New brands on the shelves include Bubble, Sweet Tooth by Sabrina Carpenter, Luna Magic, Solo Noir, and an assortment of textured haircare brands. Walmart was also privy to several exclusives such as Halsey’s af94, Brooklyn and Bailey McKnight’s new skincare line ITK, and a joint effort haircare brand with Procter & Gamble, NOU. In the past, many proprietary lines, especially influencers and celebrities, used Target as the launch pad. The industry is closely monitoring if Beauty SpaceNK shops in Walmart, with lines like By Terry (with retail prices hitting $80) and Mario Badescu, resonate with its shoppers. With more of its customers earning more than $100,000, Walmart officials don’t think those prices are out of line. Walmart’s challenge—its huge portfolio of more than 10,000 doors—makes it difficult for stores to reflect the upgrades. It will take a long time to burnish beauty in all of its stores, some of which are showing their age. Target, with fewer than 2,000 doors, has had an easier time rolling out its new look, which features clear areas for clean beauty, Fixtures for on-trend launches, and nontraditional shelving that makes the department look “less like a discounter.”Although Target did not hit its most recent quarterly goals, beauty was a top-performing category, according to Christina Hennington, Executive Vice President and Chief Growth Officer for the retailer (and an architect of Target’s beauty department). Sales were up in the mid-teens for beauty, driven by skin, hair, and makeup. Total sales volume of Ulta Beauty at Target nearly tripled year over year, fueled by more installations of the department, estimated to exceed 350 on the way to a total of 800. Ulta had a stellar quarter, with revenues rising 17.2%. Cosmetics sales soared 44%. Dave Kimbell, Chief Executive Officer, did allude to Ulta Beauty’s secret weapon if shoppers are further impacted by rising costs of living. “It is hard to know with certainty if we are starting to see consumers trade down. Ulta Beauty is uniquely positioned to capture any consumer shifts within price points in the beauty category,” he said of the format that combines accessible and luxury brands under one roof. Mass outperformed prestige, but the higher-end brands also showed gains over 2021. Instead of domiciling affordable lines on shelves located in the left quadrant of stores (in most units) and prestige on the right, Ulta Beauty now presents products by category. According to Monica Arnaudo, Ulta Beauty’s Chief Merchandising Officer, the move reflects shopper feedback on how they navigate stores. The highest-end lines like Estée Lauder and MAC have homes in the center of the store. There are also special areas such as Cue the New, Wellness Wall, Beauty Bar (for services), Sparked at Ulta Beauty, and Conscious Beauty. Drug chains are zeroing in on wellness and synergy with the pharmacy. CVS is the most vibrant example. Building upon its BeautyIRL experience designed to encourage discovery of new and social brands, the chain recently introduced Skin Care Centers. “Skin Care Center took the BeautyIRL format to the next level by once again bringing in more new-to-CVS efficacious prestige brands, but also offering new interactive elements, such as on-site skin diagnostic tools and guidance from CVS Beauty Consultants and licensed estheticians,” said Andrea Harrison, Vice President of Beauty and Personal Care at CVS Health. There are currently three stores with the premium lines. Brands include Wander Beauty, Blume, and Volition Beauty—all new to CVS—alongside clinically proven mass skincare brands that have been sold at the chain such as La Roche-Posay. CVS recently added Proactiv, making it the first drugstore to secure the once DTC-only brand. Upscale skincare could also be bait to lure shoppers into the entire beauty department. All eyes are on Musab Balbale, who energized Walmart and is now SVP, Chief Merchandising Officer at CVS. Already he has made headlines with an initiative to eliminate unfair costs of period products through a program called HERe, Healthier Happens Together. As the year wraps up, drug chains in particular are waiting for the last-minute push. Even with same-day Amazon deliveries, there will also be someone on a gift list that is forgotten, and only a late-night run to the drug store will fill the need.

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