Sephora plans to open tons of beauty shops in Kohl’s stores a few years from now. It is a way both companies try to beat the rival, Target and Ulta Beauty partnerships. The partnership with Sephora is aimed at making sales thrice bigger in the beauty section, according to Kohl. Other than that, retailers want to build a stronger bond with their customers through the partnership.
For the next fall, customers can expect 200 Sephora mini-stores inside Kohl’s locations. Meanwhile, both companies target at least 85 stores to open by 2023. Also, next year Sephora will launch the brand on Kohl’s website. Even though Kohl’s has announced more than 100 beauty brands on its website, most of them are exclusively for Sephora, as the result of this partnership.
Target opens up about the partnership plans with Ulta makeup shop inside its stores. Weeks after that announcement, Sephora and Kohl’s revealed their 10-year partnership. It is such an interesting trend to be on track even though the pandemic has hit all parts of the business world.
According to history, the beauty category has been dominated by store chains from America. However, today the trend is going out of malls so retailers have more accessible places to invest nowadays.
The CEO of Kohl’s, Michelle Gass stated that the beauty industry is not presented as wide as other industries. On the other hand, the beauty industry is quite huge, which should grow over the next few years.
After the announcement of partnerships, Koh’s shares rocketed more than 14 percent on Tuesday.
About the mini-store of Sephora in Kohl’s, the booth will be about 2,500 square feet so the same services found at Sephora stores can be practiced in Kohl’s too. The booth also includes makeup application, which results in the replacement of the current beauty assortment in Kohl’s.
What about the staff?
According to Gass, Sephora will train Kohl’s employees to staff the locations. The position is near the front store, which anyone can access this spot even from a separate entrance. Sephora also puts its logo outside the stores, near Kohl’s name.
Both companies want to be loud about this partnership and the products. Other than that, shoppers will notice that they can find Sephora inside Kohl’s easily, even from outside the building.
The Covid pandemic has indeed hurt the beauty industry. People dressing up to go to work and other occasions that have to be stopped due to the pandemic ditch some bright spots from back then. By signing the agreement of partnership, the companies hope to boost the activity in the business.
According to data of the US sales of prestige beauty products in department stores dropped significantly up to 17 percent over a year. It reached USD 3,7 billion at the end of the third quarter. However, sales slowly rose a few months later. Nail products and body products, along with fragrance demand begin to recover, based on the NPD data.
Meanwhile, Ulta shares rose more than 9 percent this year. The number brings the market value up to USD 15,7 billion. Even though the offline sales seem to go down, the e-commerce section comes more than tripled up to August. It shows how strong the demand for beauty products through online calls.
Sephora’s parent, the LVMH, does not spill the sales performance in its financial reports. At the end of 2019, the company claimed that Sephora was in one of the strongest growth moments and gaining high market share.
As has been mentioned earlier, Kohl’s plans to triple its sales from the beauty section. According to the company, overall sales have reached about 40 percent of growth. However, beauty is not well-represented in the overall business.
Thus, leveraging this one-of-a-kind time in shopping history is Kohl’s strategy, according to Gass. The partnership is planned to be part of upsizing and broadening the beauty section. On the other hand, Kohl’s will downsize some other sections that don’t fit the plan.
For instance, Kohl’s will scrap a few of women’s brands to launch a new apparel line. Other than that, the store will bring in new local brands to the store to beat the rivals, such as Macy’s, Walmart, and Target.
According to Sephora and Kohl’s, Sephora’s stores are dominated by urban markets. Thus, by bringing in Sephora inside the Kohl’s outlets, both companies will get the benefits of each other’s customers. Both Kohl’s and Sephora offer new markets to each other, which can attract new products to be shown as well.