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Supermarket Beauty may be on the wane, but Target Corp. is only on the rise.
According to the company’s last earnings call, beauty helped drive 2.7 percent growth in the second quarter, along with fashion, with net sales totaling $25.5 billion and beating Wall Street expectations. Within that, beauty rose 9 percent on a comparable basis, on top of double-digit growth a year ago.
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The secret sauce is the right brand mix, a bevvy of price points, an integrated digital strategy and a willingness to jump on trends early, said Rick Gomez, Target’s executive vice president and chief commercial officer, in a wide-ranging interview with WWD.
“Beauty at Target is a successful business for us. We have grown every year for the past five years, and as a result our beauty business has doubled in size since 2019,” said Gomez.
That success is in sharp contrast to the wider supermarket. In the first half in the United States hair and skin care mass grew only 2 and 1 percent respectively, while fragrance fell 1 percent and makeup fell 4 percent, according to Circana.
Among several other factors, Gomez attributed Target’s growth to the right variety — at the right time.
“Beauty is all about freshness and innovation. Consumers want to try new products and new brands, and we have made a big commitment to launch newcomers this year,” he said, adding that thousands of stocked units will be launched in 2025.
Among the successful launches is Blake Brown, the hair care brand inspired by Give Back Beauty in collaboration with founder Blake Lively, which had the top five best-selling hair care items at Target on launch day alone. “That’s the biggest hair care launch in Target history,” Gomez said. “It shows that when you get the right product, on trend, at a reasonable price, we can be very successful.”
Gomez also mentioned L’Oréal’s Colorsonic, a Target exclusive, as well as Tabitha Brown’s Donna’s Recipe and Jennifer Aniston’s LolaVie. The latter is available through Target’s partnership with Ulta Beauty, which currently has stores-within-a-store in about 800 doors and has given Target a wide range of price points.
“50 percent of our [beauty] the range is under $10, but value is important in the sense that consumers are looking for quality products – they also have a shopping prestige,” said Gomez. “It’s about providing the range of value across price points and also offering a quality product at a reasonable price.”
Just as wide as the range of price points, so is beauty shopper Target. “We have a broad consumer base that spans a range of ages and geographies, and we range from Gen Alpha all the way to the 55-plus consumer – we make sure we have something for everyone,” he said. “Gen Alpha might love a fun brand like Elf Cosmetics, while the 55 plus consumer might like a brand like Roc Skincare.”
While many of the successful brands include celebrity founders, Gomez said they are only part of the Target brand formula. “We’re not a catalog and we’re very thoughtful about the brands we carry,” he said. “We’re trying to bring prestige to brands, emerging brands, digitally native brands and, of course, our own brand. That’s the magic combination.”
In some cases, that includes thinking small and tapping into micro-trends to steer the market toward broader areas of growth. “Trends come from social factors. On TikTok, the Unbrush was trending. We jumped on it, and within eight weeks, the Unbrush was on display in-store. We have since sold 27 colors; it was a big hit and encouraged growth.”
One company emphasized Target’s willingness to identify trends in their early stages—and capitalize on them early.
“What differentiates Target is that they have a big hit on the culture and a beat on the mega trends as well,” said Osh Savur, chief marketing and brand officer at Maesa, which owns the brands Fine’ry, Being Frenshe and Kristin Ess Hair that is sold at Target. “Working with them as an incubator, they’re also seeing what we’re seeing and they’re able to validate those trends.”
Savur pointed to Fine’ry, Maesa’s fragrance brand which emerged as an exclusive target in 2023, as an example. “They had an instinct, they carved out a space in the plangram, and they got behind it in a way that it could scale,” she said.
When Fine’ry launched, industry sources estimated it would exceed $20 million in sales.
“We knew fragrance was a trending category during COVID[-19]but the mass had begun to walk away from him. Target was able to back what they were seeing happening in the market, work with us and launch a brand right at the point where the growth was happening,” said Savur.
Focusing on early trends and spotting the next big thing is nothing new for Target. He was Elf Beauty’s first retail partner back in 2005. Almost 20 years later, that partnership is still thriving.
“We are their number one brand with more than 20 percent of their entire category,” said Tarang Amin, chief executive officer of Elf Beauty, 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 the user experience.
“It’s 20 percent of the business,” Gomez said of Target’s digital beauty sales. “We’re leaning into new technology that enables things like a virtual trial for lips, eyes and foundation. It has become a source for learning about products, and then shoppers can go into the store and buy. It is truly omnichannel. We don’t think of it as brick and mortar shopping and then digital shopping – we see it all as shopping. Often in the store, you will see someone with their phone open in their hand.”
Another key area of growth is its retail business, which has doubled in size over the past three years. The opportunity, Gomez said, is manifold.
“There’s a travel business, and there’s also a lot of experimentation and trying new things,” Gomez said. “We see that people will use minis as a trial and then come back to buy the full size. It is a space we will continue to lean into.
“We think minis will be great this holiday season for stocking stuffers. They’re also great for everyday things like hand sanitizer and lip balm,” he continued. “So it’s definitely a trend that we’re seeing minis go back to school and that will continue through the holiday season.”
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