Beautycounter is finally going big on wholesale retail distribution, starting with Ulta Beauty.
On Feb. 26, Beautycounter will begin selling through Ulta.com before launching into 500 Ulta stores on March 5, marking the start of the exclusive retail partnership. The 10-year-old clean beauty brand will live within Ulta Beauty’s Conscious Beauty program, which has become a cornerstone of the retailer’s merchandising strategy since its introduction in 2020 through marketing campaigns and brand merchandising. In addition to Ulta Beauty, Beautycounter will continue selling through its own DTC e-commerce site, its direct seller network, and its two standalone stores in New York City and Denver, Col. In 2021, private equity firm The Carlyle Group acquired a majority stake in Beautycounter, valuing it at $1 billion. Gregg Renfrew, founder and former CEO of Beautycounter, departed the company in Jan. 2023. Her LinkedIn states that she is now working on a “confidential big project.” Industry veteran Marc Rey was installed as Beautycounter’s CEO in Jan. 2022.
“It’s time to expand and to make the brand available to all Americans,” said Rey, of the Ulta Beauty partnership. “Ulta Beauty knows the brand very well; we fully trust them and they share the same kind of values as us. … We went exclusively with Ulta Beauty because we don’t want to overstretch our distribution and start to lose our soul, or [introduce] any kind of compromise.”
Rey said he does not expect Ulta Beauty to cannibalize the brand’s direct sellers. Direct selling will remain the brand’s main source of revenue, but Rey declined to share the percentage. What’s more, the Ulta launch does not represent a shift in brand strategy, as the brand has always been omnichannel, despite not having a long-term partnership through a major retailer before, said Rey. As of the end of December 2021, Beautycounter had over 45,000 direct sellers in the United States and Canada, according to Beautycounter’s income disclosure statement for its sellers. In Dec. 2020, Glossy reported that Beautycounter had over 60,000 consultants.
“We’ll [worry] about cannibalization when we reach 50% of the American population, but we’re far from that,” said Rey. “Today, we have many extremely loyal consumers, but we need to change gears and reach [more people], in terms of awareness and product trial for new consumers.”
Kara Trousdale, chief commercial officer at Beautycounter, added, “We firmly believe that a rising tide lifts all boats and see only upside potential for all channels as a result of our partnership with Ulta Beauty.”
The Ulta Beauty expansion comes as Beautycounter celebrates 10 years in business. As part of its anniversary, Beautycounter is ramping up its product launches, expanding its list of no-no ingredients from 1,800 to 2,800, and re-platforming its e-commerce site with plans to grow its e-commerce sales by triple digits in 2023. Of course, its advocacy work in government bodies will continue. Notably, in Dec. 2022 the “Modernization of Cosmetics Regulation Act of 2022” passed. It was part of the omnibus spending bill giving the federal government more power over the beauty industry via the Food & Drug Administration. Beautycounter has been proactive in legislating for more regulation over the beauty industry since its founding, including generating marketing campaigns around the subject.
Marketing around Beautycounter’s Ulta partnership will be fueled by a campaign called Raise Up Beauty, which will be Beautycounter’s largest campaign to date, based on spend. Rey declined to share exact figures, but said Ulta Beauty and Beautycounter co-invested, with Beautycounter spending “millions.” Raise Up Beauty is a 360-degree, digitally-led campaign inclusive of video, social and influencer content, as well as an in-store merchandising strategy. There will also be a 10-year anniversary celebration in Los Angeles on March 2, for media and the Beautycounter community.
Ulta Beauty will particularly help the brand reach younger customers, as Ulta Beauty is a popular beauty destination for Gen Z. Beautycounter’s core customer base is in their early 30s. According to Piper Sandler’s Semi-Annual Taking Stock With Teens Fall 2022 survey, Ulta Beauty remained the No. 1 preferred beauty destination for Gen Z and also held the strongest beauty loyalty membership among female teens.
“As conscious beauty continues to be a priority at Ulta Beauty, we’re excited to evolve our assortment with brands like Beautycounter who share our passion for this space,” said Monica Arnaudo, chief merchandising officer at Ulta Beauty. “As a long-time clean beauty advocate, Beautycounter has helped ignite a movement that has propelled the industry forward. We’re excited to build upon that work through our partnership while providing more transparency and choice to the beauty community.”