During Ulta’s 2017 fourth-quarter earnings call, the CEO, Mary Dillon, made sure to deliver as much good news as possible to investors.
But the one pieces of news that stuck out the most to not only investors but beauty shoppers was the fact that Ulta will start carrying Chanel Beauté, and this goes beyond fragrances.
“Finally, we’re thrilled to announce a prestigious addition for 2018 — Chanel Beauté. Following our long-standing partnership with Chanel offering their iconic fragrances in hundreds of our stores, we are honored to introduce Chanel Beauté in a small number of Ulta Beauty doors this year. This will be an edited assortment featuring a Chanel-branded makeup station with the first Chanel store opening in Westport, Connecticut, in just a few weeks.”
While the news is pretty tremendous, the following is still not clear:
- which products will make it into Ulta stores
- the arrival of these products
- availability of Chanel Beauté products at Ulta.com
While the extended relationship is a major move for both brands, this may be another demonstrated push towards courting a new audience as Chanel recently made the move towards the Instagram generation during the last few weeks.
To support this initiative, Chanel recently launched two beauty-specific Instagram accounts:
- @chanel.beauty – which features posts created by the Chanel
- @welovecoco – a curation of photos from fans who tag the account.
The new accounts received support from various beauty influencers, who were essentially paid by the brand in order to promote the launch.
In addition to the newly launched Instagram accounts, Chanel has also launched a series of social media-friendly pop-up experiences:
- Chanel Beauty House – opened in Los Angeles for just about four days at the very beginning of March. Each room was branded and meant to create a very shareable moment on Instagram.
- Chanel Coco Game Center – located in Toronto’s Holt Renfrew department store which just opened and will be open through April 15th. The popup will feature Chanel-branded classic arcade games.
Currently, Chanel Beauté is available in its own stores as well as their own e-commerce website. In addition to that, Chanel Beauté can be purchased in select department stores, and in Cos Bar brick-and-mortar stores.
While the move to Ulta is big news for both brands, one would question why the brand did not launch with Sephora, as they carry a move luxurious price point in comparison to Ulta.
Ulta is known to carry a mix of high and low brands but has made recent moves to increase its high-end brand assortment.
Last year, MAC made the same move and in worked quite well. According to WWD, the MAC launch was the retailer’s most successful e-commerce launch ever.
In terms of Ulta, the retailer has a lot to gain when it comes to selling such a luxurious brand. The trick here will be to nail the right products and price points.
And while higher-end brands carried at Ulta are known not to do as well as the mass brands, Dillon notes her optimism:
“Turning to prestige cosmetics, similar to the third quarter, we saw this category slow from its stellar growth in 2015 and 2016. While certain brands of makeup were very strong, others struggled to comp over significant multi-year increases. We’re optimistic that we can accelerate growth in this category with encouraging newness in the pipeline. We’re currently updating our prestige cosmetics assortment…”