Ulta has been steadily blurring the lines between mass and prestige beauty products, placing lower-priced items sold at drugstores (Maybelline, NYX) in the same vicinity of prestige products carried in department stores (Clinique, Lancôme). However, L2’s latest report finds that Ulta pricing is not as haphazard as the assortment suggests and Ulta prices fall in a narrower range than prestige chain Sephora.
For example, moisturizers start at four dollars at Sephora and reach $385. Meanwhile, Ulta moisturizers start at three dollars and none are priced higher than $192. The price of the average moisturizer carried by Ulta is $39 vs. $65 at Sephora. Knowing the desired price range and limits of Ulta shoppers can help brands decide which of their products to distribute on the retailer.
Furthermore, Ulta’s paid search position indicates that it makes significant mass products – at least in search. While Sephora appears in the top 10 paid search results for high end brands like Tom Ford, Bobbi Brown, and Marc Jacobs Beauty, Ulta uses paid search to redirect from popular mass brands like Maybelline, and NYX. Urban Decay, bareMinerals and Anastasia are the only brands where both Sephora and Ulta’s search spend overlap, which is why prestige brands should not forgo Sephora distribution relationships to sell exclusively on Ulta.