The company Ulta Beauty lures young buyers from its most active competitor.
In the history of marketing, there are often cases when a young but aggressive brand begins to win a convincing but less mobile competitor. And the struggle between Ulta Beauty and Sephora, which has now unfolded in the U.S. market, demonstrates a similar situation well. The first one more and more actively manages to win the sympathies of consumers, even though for the second one, there is all power of LVMH concern.
Ulta Beauty made a bet on the representatives of Gen Z. According to the latest market research on the behavior of teenagers of Piper Jaffray, Ulta Beauty has become the leading network of products for beauty in the U.S. among teenagers. On her side is 38% of respondents, while Sephora has become the closest competitor with an index of 26%. A similar survey conducted this spring showed a much smaller gap - 33% for Ulta and 31% for Sephora.
As analysts note, Ulta Beauty expands its presence in the U.S. market, deliberately focusing on the most active competitor. Thus, the company opens retail outlets near Sephora stores and, therefore, purposefully attracts customers. Ulta has already opened stores within a 10-minute drive of almost 80% of Sephora's stores, and this process is still ongoing.
Sephora opposes its young competitor, launching new brands in its stores, attracting social media stars, offering subscription gift parcels, and much more. But these efforts are not enough to make things right. Ulta also relies on the extensive self-care experience available to visitors at its outlets, as well as the exclusive partnership with Kylie Cosmetics from Kylie Jenner.
J.C. Penney's network is no less concerned about the brand than LVMH. In all, Sephora operates more than 2,500 stores worldwide, with about 660 of them located in J.C. Penney's department stores in the United States. And the presence of Sephora outlets is one of the main factors for the network to attract young customers and one of the most important sources of income. If the brand's position falters, J.C. Penney will experience significant difficulties.