Now that Black Friday Sales are officially on and the holidays are nearing ever-closer, it's crucial for retailers to sharpen their competitive edges and attempt to gain new customers – and please pre-existing ones.
This may prove more difficult for some, as certain sectors of the economy seem to have hit a stalemate.
Related: Ulta has this one key advantage over other beauty retailers
Auto, housing, tech, and some divisions of retail have begun to wind back their eye-popping gains they enjoyed from lower interest rates and increased spending behavior in the earlier 2020s.
Now, though, consumers are more discerning, as prices have risen. The most recent Consumer Price Index (CPI) numbers are out from October, and several key services and products remain costly – or more expensive – than the year prior.
Take, for example, the following increases:
- Food: up 3.2% compared to October 2022
- Electricity: up 2.4% compared to October 2022
- New vehicles: up 1.9% compared to October 2022
- Apparel: up 2.6% compared to October 2022
- Shelter: up 6.7% compared to October 2022
- Transportation services: up 9.2% compared to October 2022
Crucially, several big ticket items are less costly compared to the year prior, including:
- Gasoline: down 5.3% compared to October 2022
- Used cars and trucks: down 7.1% compared to October 2022
- Medical care services: down 2% compared to October 2022
Still, plenty is still expensive, and customers are more discerning than before going into the holiday season. So it's crucial for retailers to generate as much consumer excitement as possible in an effort to bolster sales.
Ulta Beauty inks a key partner
One retailer staging such a takeover is Ulta Beauty ULTA, which has been building a mammoth online presence – and the sales to boot.
In July, Ulta reported a Q2 revenue of $2.53 billion – a 10.13% increase compared to the quarter a year prior. It's making customers and investors both happy – Ulta delivered a 2.90% earnings-per-share beat of $6.02 in Q2.
But it's looking ahead, rather than behind it, as the holiday season approaches.
In July, Chief Financial Officer Scott Settersten was already telling analysts that Ulta would be "focusing on sales and holiday," which they expect to be robust.
One such component to a healthy holiday season might be Ulta's recent partnership with Lush, a wellness beauty and body brand known for its bath bombs – and, until recently, its presence in shopping malls.
Ulta has agreed to begin selling Lush Discovery Sets, and Holiday Sets, which will feature some of Lush's most popular products. Prices will range from between $17-$46.
"As pioneers in the body category, we are delighted to provide greater access to their beloved products, and together help amplify their mission for efficacious, fresh and cruelty-free ingredients," Ulta VP of Merchandising, Penny Coy said.
Ulta has been increasing its wellness efforts to extend beyond its already far-reaching beauty penetration. In October, it announced it would be expanding its already-popular Wellness Shop in 1,300 stores, which will include "spa like" displays of vitamins and supplements by top brands including Moon Juice, Lemme, Golde, Love Wellness, OUAI, Womaness, Liquid IV, and Olly.
