Target Continues Its Chic Aspirations
The retailer is bringing a big-name brand into its stores
In an unexpected improvement, Target announced yesterday that it would be welcoming new Ulta Beauty installments in locations starting in 2021. This partnership furthers Target’s success both before and during the coronavirus pandemic.
Red hot
Target (TGT) is on fire. Just since the end of March its stock is up over 50 percent. And from the time Brian Cornell was named CEO in July 2014, its share price has almost tripled. It wasn’t all smooth sailing though: 2016 gave slowed foot traffic and lower sales in many stores and the company had to pay $18.5 million in fines in 2017 to settle a credit card breach from 2013.
But, Cornell’s $7 billion turnaround plan (announced in February 2017) has proved to be working. Investments in urban stores, digital technology, store refreshes, and private-label brands were all planned to regain market share and cater to a young, growing customer segment.
Shortly after taking the helm, Cornell told The Seattle Times “That is something we’ve clearly recommitted to, making sure we’re bringing that quality and innovation to those style categories, apparel, home and beauty, so that we elevate that “Tarjay” experience.”
Store within a store
One facet of merging the elegent and upscale with a value-oriented Target experience has been through partnerships with other brands. While Starbucks have been in Target stores for awhile, the store chain continued expanding its brand portfolio in recent years.
CVS Health acquired Target’s pharmacy and clinic businesses in 2015 and rebranded the in-store sections. And last October, Target and Disney partnered to introduce Disney shops at several locations around the United States and online.
Next year, another brand is joining the family.
Ulta Beauty (ULTA) — the largest beauty retailer in the country — will soon be found in hundreds of Target locations. The new relationship seems to be for the long haul, with new employee training and intertwined fulfillment services.
The press release states “To bring Ulta Beauty’s industry-leading expertise and established guest-centric experiences to life, the company will train newly hired Target team members to serve as experts on prestige beauty offerings, aligning to Target’s focus on providing guest service with deep product expertise. The shop-in-shop is expected to be enhanced with Ulta Beauty’s immersive, in-store digital discovery tools such as GLAMLab, a virtual try-on tool that provides safe trial across beauty categories.”
It is unclear what the final format will look like or how much square footage the departments will take up, but this will surely make a splash in Target stores. Shoppers who typically make stops to several different stores in a given week may now be able to pick up groceries, clothes, and makeup in one visit to Target.
Upon the announcement on Tuesday, Ulta Beauty shares rose 7.4 percent for the day and Target shares finished up two percent for the day.
