the

Ulta And Sephora's Billion Dollar Makeup Fight

in 1998 the French cosmetics retailer

Sephora migrated across the Atlantic and

opened its first store in the United

States

Sephora had cultivated a particular

style of cosmetic shopping 9,000 square

feet full of 11,000 products from many

brands free for touching and testing

this heralded a seismic shift in how

cosmetics were sold in the United States

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previously cosmetics were divided in two

rigid and non overlapping categories

mass market or just mass brands like

Maybelline covergirl and Revlon were

sold at drugstores prestige brands like

Lancome Estee Lauder and Clinique were

sold at department stores the division

between these two categories was as much

about price as it was about image

prestige cosmetics also called luxury or

premium were representative of an

aspirational upper-class lifestyle the

gatekeepers of beauty Ellicott

apartments door is saying this is a

great brand this is a luxury brand you

are selling the whole images of luxury

and this is how it was for most of

America's history where you launched

brand

I really defined the brand's at the

price point and everything else and that

was like a very very very British story

and since most apartment stores only

carried a few prestige brands women

tended to stick with just one they were

Estee Lauder women or Lancome women if

they wanted other options they'd have to

go to another store entirely enter

Sephora Sephora brought dozens of

prestige brands under one roof for the

first time in what a 1998 New York Times

article described as a luxury cosmetics

general store it had proven to be a hit

in the retailers native France where 10%

of cosmetics purchases were made in a

Sephora they really did change the name

of the game they brought in the kind of

luxury cosmetics that up until that

point had only been sold in department

stores and made them available in a

streetside setting 20 years later

Sephora is a bona fide Beauty juggernaut

it fanned out across the country with

over 1030 stores in the u.s. by 2018

it weathered the 2008 financial crisis

and e-commerce boom that devastated many

other brick-and-mortar retailers making

it a darling among the brands owned by

its parent company LVMH but let's rewind

a little bit yes

Sephora changed how prestige cosmetics

are sold in the US but it didn't

incorporate mass-market brands on that

front Sephora has faced a challenge from

one of its stiffest competitors uLTA

Beauty think of Ulta as basically a

suburban Sephora it started in 1990 in

Naperville Illinois as a one-stop shop

for all things makeup hair nails and

salon services while it offered some

prestige products for makeup Ulta tended

to skew more toward mass-market brands

it staked a claim on middle-class

consumers of suburban America setting up

shops primarily in strip malls away from

major urban centers and that's how it

was for a while

Sephora urban and luxury Ulta suburban

and mass-market recently though there's

been a major uptick in cosmetic sales

and consumers trends have changed again

people are buying mass brands are buying

luxury brands are buying premium brands

all of which because they're trying to

create their own identity rather than

being told what their identity is and if

consumers are perfectly happy to have a

seven dollar mascara and an $85

foundation what does that mean for

Sephora purveyor of the prestige and

Ulta merchants of the mass-market

today they are really converging with

all - adding a lot more prestige

cosmetics and Sephora opening their

doors to more brands that appeal to

millennial women Sephora has brought a

few popular new brands to its shelves

like Fanta beauty the new brand founded

by mega star Rihanna which broke records

for most sales in its first month for a

new brand at Sephora but ulties been

especially aggressive in introducing

more brands to its shelves adding over

100 new brands from 2010 to 2015 and

another 69 and 2016 it has especially

focused on prestige cosmetics to bring

growth adding mac Estee Lauder NARS and

in a move that would have been

unthinkable 20 years ago even Chanel it

even opened a store in the middle of

Manhattan defying its reputation

suburban retailer this evolution has

paid off as Ulta has posted double-digit

sales increases every year since 2015

however while the global makeup industry

is expected to reach a value of forty

eight point three billion dollars in

2018 that growth has slowed women are

turning towards less expensive makeup

and a more natural look

whether Sephora and Ulta can adapt to a

less voracious appetite from their

customers remains to be seen

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