Today the beauty industry is about as diverse as anything you could imagine. The variety of brands and products seem limitless, as are the many ways you can purchase them, whether in stores or online.
Sephora and Ulta Beauty, who came to dominate the U.S. specialty retail market for beauty and cosmetics in the aughts, are still going strong, opening new stores, and diversifying their product lines. In October of last year, CivicScience found that 17% of U.S. adult women bought most of their cosmetics and makeup at specialty beauty stores, like Sephora or Ulta, coming in only second place to big-box stores, like Target.
However, both Sephora and Ulta face Amazon’s growing beauty sales. In such a high-stakes and rapidly expanding industry, how do the two cosmetics giants stack up against each other?
Ulta is Ultimately More Favorable
In a recent survey of 1,986 U.S. respondents aged 13 and up CivicScience found that Ulta had slightly higher favorability ratings than Sephora.
Ulta has even better favorability among women alone. A strong majority of those favorable to the brands were women (no surprise there), with only 13-14% being men. But looking exclusively at women saw a bigger discrepancy — 39% were favorable to Ulta while 34% were favorable to Sephora.
It’s important to note the two brands aren’t identical — Sephora focuses mainly on prestige and luxury brands, while Ulta also offers drugstore brands, as well as more haircare products and an in-store salon. Yet, they’re still competitors; both carry many of the same brands, have robust online stores, and offer rewards programs. Does Ulta’s selection of drugstore brands give it an edge in favorability?
Highest Earners Favor Ulta
It’s possible, yet data from the October study indicated Ulta and Sephora shoppers are mainly in search of quality products before anything else, including brand or variety. In fact, price was the least of their concerns.
Interestingly, for both brands, income doesn’t necessarily dictate favorability. While a higher percentage of adults who make over $150k per year is more favorable to both Ulta and Sephora than lower earners, they are the exception. When it comes to all income brackets below $150k, the lowest earners (taking home $50k or less per year) emerge as most favorable to both brands.
Favorability doesn’t always translate to sales, but these lower income earners may be willing to pay higher prices for their cosmetics and beauty products.
Still, even with its less expensive products, it’s clear that Ulta has more appeal than Sephora across the board, particularly pulling in higher favorability ratings among those making $100k per year and above.
Sephora Wins with Teenagers and Brand Loyalists
Considering age, Ulta has higher favorability ratings than Sephora with the over-30 crowd, especially those 55 and over. But Sephora comes in hot among teens, as well as 25-29-year-olds.
Those demographics may be drawn to lines Sephora offers that Ulta doesn’t, such as Fenty Beauty by Rihanna, and other exclusive partnerships. In fact, brands are a big deal to Sephora shoppers. Even though both Ulta and Sephora share about 65% of their “favorable” base (i.e., 65% of those who favor Sephora also favor Ulta, and vice versa), there is a noticeable difference when it comes to brand loyalty. One-half of Sephora fans say they are “very loyal” to their favorite brands, compared to just one-third of Ulta fans.
Tech Adoption Trends
Sephora emerged as a retail early adopter of augmented reality technology, with their app that lets you virtually try out makeup. Ulta recently made headlines for acquiring AI and AR tech startups. E-commerce and tech is key to the continued success of both companies, but is it equally important among their customers? Here are a few findings to give you an idea.
1. When it comes to making mobile purchases, in particular, it turns out that Ulta fans make more daily purchases using devices than Sephora fans.
2. Even though they make fewer purchases, Sephora fans rate mobile apps as more important to their lives than Ulta fans. That’s good news for Sephora, who hopes their app will drive more store foot traffic.
3. Lastly, Ulta fans are more likely to own or intend to own a virtual reality device. However, those favorable to both brands are early adopters of VR, indicating that they may be receptive to emergent AR and VR technologies from retailers.
So while Ulta has broader mass appeal, Sephora has a niche with teens and brand-centric buyers. Both can appeal to tech-savvy mobile users and early adopters. The question remains as to the toll that Amazon will take on the beauty industry moving forward, as it absorbs more online shoppers.