EXPERIENCE

The Ulta-mate Partnership

Target saw rivals like Walmart and CVS signing deals with beloved beauty and wellness brands and raised them an entire retailer. 

Ulta will open 100+ mini-stores within Target locations by the end of 2021, the retailers shared in a joint statement yesterday. 

• Ulta will provide a rotating roster of 40+ “established and emerging prestige beauty brands.” 
• Target will also stock Ulta products on its website—allowing Ulta to access Target’s curbside pickup and same-day delivery services.

 In the eye of the shareholder, the tie-up’s beautiful. Yesterday, Ulta shares hit their highest level since before the pandemic, per the WSJ. 

Blending experiences

Ulta and Target epitomize a trend spotted early in quarantine: Beauty brands need an essential presence for in-store survival. Target’s beauty sales increased by more than 20% in Q2 while its stores remained open; Ulta’s sales were still 10% below pre-pandemic levels after its stores reopened in July.  

One blemish? Since 2019, Target has renovated hundreds of beauty sections and courted new brands. But its efforts to boost more affordable brands and private label offerings could be outshined by a glossy new neighbor. 

• Sucharita Kodali, VP and principal analyst at Forrester Research, told Retail Brew that price point, product type, and location of the shop-in-shops will determine whether Target’s private labels or existing partners can compete with Ulta-lite. 
• Kodali also noted that Target still benefits in that scenario, since the partnership could provide access to “brands it never had,” like the Estée Lauder portfolio. 

Another angle: Together, Target and Ulta’s loyalty programs boast 100+ million combined members. But Kodali notes that “double dipping,” aka combining loyalty benefits, could backfire on Ulta. If shoppers are choosing between storefronts for points, they’ll pick the one with products in several categories.

Bottom line: In the Covid-19 economy, even category leaders like Ulta need to hitch their carts to an essential retailer.

DATA

Old Shopping Habits Die Hard

Retailers from Kohl’s to Lowe’s have turned 24-hour holiday sales events into months-long marathons in Covid-19’s wake. But are consumers synching their shopping calendars with brands’ new schedules? 

Yes and no. A late Prime Day jumpstarted October spending, but surges weren’t equally spread across IRL and online retail. According to Deloitte data shared with Retail Brew...

• The cluster of retail promotions from October 11 to October 17 increased online sales by 50% YoY. In the first week of October, sales had increased 25%.
• But spending only increased 6% during the period when in-store and online sales were combined. 

The brands’ eye view: Deloitte noted that sales over the first three weeks of October were highest among traditional big box stores and online-only merchants, increasing between 10% and 30%. 

No matter the channel, most shoppers are skeptical of Black Friday szn. Across large retailers, more than half of shoppers aren’t taking advantage of early deals, per CivicScience.

• Off-price fashion retailers had a slight edge over everything emporiums like Walmart and Amazon.

Francis Scialabba 

My takeaway: Black Friday in October is like a PSL in August—the most devoted fans are on board, but the average shopper thinks it’s a little premature.  

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E-COMM

When Push Comes to Shop

While minding my own business and searching for nap dress styling tips, I was hit twice with a new (to me) Instagram tool for retailers to watch. 

Some retailers are testing IG push notifications to alert shoppers when they’ve uploaded new items to buy in-app. 

• Notifications, like the ones above, populate under a “Shopping Activity tab.” 
• Before judging my screenshot too hard, note that I don’t follow those brands’ accounts—suggesting retailers can nudge followers they want but don’t have.

Instagram has hinted that more signals to encourage purchases were en route, but it didn’t reply to my request for more details on push notifications. 

Friendly reminders

When push notifications go Shops-wide, they could be a game-changer for reminding IG’s users that it’s a mobile mall. Retailers can target their ideal shoppers with direct calls to purchase, without the R&D costs of building their own app experience.

Any downsides? “It takes the right customer targeting, the right moment, the right intermittence between notifications, and good copywriting to have success with push notifications,” Adam Blacker, VP Insights and Alliances at Apptopia, told Retail Brew. Too many drop alerts, and shoppers will hit the off switch. 

WHAT ELSE IS BREWING

• Chipotle is opening its first online order-only restaurant.
• Walmart is piloting driverless deliveries in Scottsdale, AZ. 
• Allbirds will raise prices by $1 on Black Friday. 
• Lowe’s denied reports it’s in talks to acquire HD Supply.
• Simon Property Group is still struggling to collect rent from “certain larger national tenants.”

COMMUNITY

It’s time for Coworking, our segment highlighting the best part of Retail Brew: you, the readers. Want to be featured? Fill out our quick nomination form, or share it with a friend who reads Retail Brew.

Today we’re screen-sharing with Ken Johnson II, VP of Net Lease at LA real estate brokerage James Capital Advisors, and U.S. Navy veteran. 

How would you describe your job on a date? I advise clients on what type of retail investment properties to buy or sell.

One thing we can’t guess about your job from LinkedIn: There is not as much golf involved as some people might think.

Your favorite project you’ve worked on: A new development deal for a Chuze Fitness and all the behind the scenes that came with it.

One brand you’re obsessed with (that isn’t your employer): My WFH go-to, Mack Weldon.

SWAPPING SKUS

Lockdown has inspired 1) some terrible Julia Child impressions and 2) some surprising changes in the world of food retail. Here are two reads on how retailers are handling shifts in fridge share. 

• Traditional grocers like Kroger and Albertsons want what FreshDirect and Blue Apron already have: a share of “subscription culture.” (Grocery Dive)
• I used to order Sweetgreen salads for lunch nearly every day, but the app’s collecting dust on my phone. I’m not the only one abandoning fast-casual’s health darlings. (Marker)

ICYMI

Catch up on the Retail Brew stories you may have missed.

• Singles Day 2020: Everything You Need to Know
• Amazon Releases Inventory-Tracking Shelves for Small and Medium Businesses
• Why DTC Brands Are Rethinking Their Store Locations