Ulta Beauty will begin selling Chanel Beauté—a coveted and surprising addition to the beauty retailer that mixes high and low.

What happened

  • Ulta Beauty, which beat out Sephora in 2015 as the biggest beauty retailer in the U.S., is growing its share of Chanel products beyond fragrances to include Chanel Beauté, the companies flagship beauty line. It will be available online and in-store at Chanel makeup stations.

Why it matters

  • This move benefits both companies. Ulta mixes higher-brow and mass-market brands, but has increased its prestige inventory, which the retailer has seen stimulate more sales in the last few years. With Chanel, Ulta will introduce a fresh brand to its inventory, which boosts its ability to compete with Sephora, known for its higher-priced offerings.
  • Chanel—whose recently upgraded Instagram strategy, influencer marketing and pop-ups are targeting a younger, Millennial and Gen Z audience—will have increased access to Ulta’s relatively younger customer base. With 77% of Ulta shoppers buying both high- and low-end products, the retailer provides a channel for customers to move up the ladder to prestige—and an iconic brand like Chanel at the top will attract more shoppers to the top. M.A.C., which began selling at Ulta in May 2017, was the retailer’s most successful ecommerce launch to date, showcasing the promise of this strategy.
  • Ulta, which lacked a definitive identity until a few years ago—has successfully crafted a holistic omnichannel experience that integrates what consumers are talking about online and offline, as it tries to fight back against the more digitally-savvy Sephora.