Beauty’s mass market may be in a state of flux, but Target Corp. It’s only on the rise.
Along with fashion, beauty also delivered 2.7 percent growth in the second quarter, according to the company’s latest earnings release; net sales reached $25.5 billion, beating Wall Street expectations. Of this, beauty grew 9 percent on a like-for-like basis, on top of double-digit growth a year ago.
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The secret sauce is the right mix of brands, multiple price points, an integrated digital strategy and a willingness to jump on trends early, Rick Gomez, Target’s executive vice president and chief merchandising officer, said in a wide-ranging interview with WWD.
“Beauty on Destination has been a thriving business for us. We have been growing every year for the last five years, which has led to our beauty business doubling since 2019,” said Gomez.
This success contrasts sharply with the broader mass market. According to Circana, bulk hair and skin care in the U.S. were up just 2 percent and 1 percent, respectively, in the first half, while perfume and makeup fell 1 percent and 4 percent, according to Circana.
Gomez attributed Target’s growth to the right assortment of products at the right time, among many other factors.
“Beauty is all about novelty and innovation. “Consumers want to try new products and new brands, and we have made a big commitment to introduce innovations this year,” he said, adding that thousands of stock-keeping units will be operational by 2025.
Successful launches include hair care brand Blake Brown, developed by Give Back Beauty with founder Blake Lively, which had the top five best-selling hair care products at Target on launch day alone. “This has been the biggest hair care launch in Target history,” Gomez said. “When you get the right product, on-trend, at an affordable price, we find that really works for us.”
Gomez also pointed out L’Oréal’s Target-exclusive Colorsonic, in addition to Tabitha Brown’s Donna’s Recipe and Jennifer Aniston’s LolaVie. The latter is available through Target’s partnership with Ulta Beauty, which currently spans in-store stores in nearly 800 doors and offers a wide range of price points to Target’s lineup.
“Our 50 percent [beauty] The assortment is under $10, but value is important as consumers look for high-quality products; they also do prestige shopping,” Gomez said. “It’s about providing value across different price ranges and also offering quality product at an affordable price.”
As wide as the price range is, so is Target’s beauty customer base. “We have a broad consumer base across age and geography and have a wide range of products from Alpha Gen to consumers aged 55 and over, making sure we offer something for everyone,” he said. “Alpha Gen might like a fun brand like Elf Cosmetics, and the 55+ consumer might like a brand like Roc Skincare.”
While many successful brands have famous founders, Gomez said they’re just part of Target’s brand formula. “We are not a catalog and we are very thoughtful about what brands we carry,” he said. “We look at prestige brands, emerging brands, digitally native brands and of course our own brand. This is the magic mix.”
In some cases, this involves thinking small and focusing on microtrends to drive the market towards larger areas of growth. “Trends come from social. Unbrush is trending on TikTok. We jumped right in and had Unbrush on display in the store within eight weeks. We have since sold 27 colors; “It has been a huge success and a driver of growth.”
One company highlighted Target’s willingness to spot trends in their infancy and capitalize on them early.
“What makes Target different is that it has its finger on the pulse of culture and megatrends,” said Osh Savur, marketing and branding officer of Maesa, which owns the Fine’ry, Being Frenshe and Kristin Ess Hair brands. Sold at Target. “By working with them as an incubator, they see what we see and can validate those trends.”
Savur cited Maesa’s fragrance brand Fine’ry, which launched exclusively for Target in 2023, as an example. “They had instincts, made room in the planogram and got behind it so it could scale,” he said.
At the time of Fine’ry’s launch, industry sources predicted sales would exceed $20 million.
“We knew fragrance was a disruptive category during COVID[-19]but the crowd was starting to move away from him. Target was able to take back what they saw in the market, work with us, and build a brand right where growth was happening,” Savur added.
Getting in on trends early and spotting the next big thing is nothing new for Target. She was Elf Beauty’s first retail partner in 2005. Almost 20 years later, this partnership is still thriving.
“We are their number one brand with over 20 percent of all their categories,” Tarang Amin, CEO of Elf Beauty, said in a recent interview.
As for Target’s digital strategy, it’s not just localized to social media trends, as Gomez prepares to test new technologies to improve user experience.
“It’s 20 percent of the business,” Gomez said of Target’s digital beauty sales. “We are turning to new technology that enables things like virtual try-on for lips, eyes and foundation. It has become a resource to learn about products, and shoppers can just go to the store and buy. It’s truly multi-channel. We don’t think of this as physical shopping first and then digital shopping; We see them all as shopping. “Most of the time you’ll see someone in the store with their phone open.”
Another important growth area is the mini business, which has more than doubled in the last three years. The opportunity here is diverse, Gomez said.
“There’s a travel business, and there’s also a lot of experimentation and trying new things,” Gomez said. “We see people use the minis on a trial basis and then come back and buy the full size. This is an area we will continue to address.
“We think minis will be great for stocking stuffers this holiday season. “They’re also great for everyday things like hand sanitizer and lip balm,” she continued. “So minis are definitely a trend that’s making an impact during back-to-school and that we see continuing into the holiday season.”
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