Beauty & Wellness Briefing: How Ulta Beauty plans to win wellness in 2025

“We were well ahead of the trend in 2021 starting [our wellness section rollout] with just a portion of our stores — about 460 doors. And we’re really proud to share that all of our [1,385] Ulta Beauty locations will officially feature a dedicated wellness space [by early January 2025],” Penny Coy, svp of merchandising at Ulta Beauty, told Glossy. 

Coy oversees the curation of the retailer’s in-store and online wellness section called The Wellness Shop. It started as a pandemic-era idea and launched in 2021 with 35 products curated into five categories: down-there care, relax & renew, everyday care, spa at home, and supplements. The retailer added intimate wellness shortly after and has since removed the spa at home category.

Ulta Beauty plans to expand these categories this year, Coy told Glossy. It will also reach deeper into oral care, nutrition, sleep, hormonal health, mindfulness, stress relief, ingrown hair solutions, aromatherapy, and select skin and body care that promotes skin health. 

“There can be a lot of intersections [between wellness and beauty],” Coy said. For example, some products, like skin health-focused skin care — which often targets acne or microbiome health — will live within both The Wellness Shop and their category or brand sections. However, Coy told Glossy that she’s less interested in merchandising existing products in the Wellness Shop and more focused on expanding deeper into key concepts with new products. 

For example, instead of moving hair health-focused products from its hair section into the Wellness Shop, Coy’s team welcomed all new products. For example, in 2024, Ulta Beauty launched hair-health-focused Jolie Filtered Showerheads, which retail for $165. 

Much of this growth strategy stems from Ulta Beauty’s overarching goal of serving multigenerational shoppers. “We’ve got the young daughter, the mother and even the grandparents coming in together,” Coy told Glossy. “So we really want to be able to service their needs — everything from first-period care for our young Alpha guests to prenatal, postnatal, pre-menopause, post-menopause and menopause care, and beyond that. We’re really taking them through their life journey of wellness.” 

The retailer will also undergo a test-and-learn process this year with the placement of each in-store Wellness Shop and how each is staffed.

“We’re testing bringing [The Wellness Shop] to the front of some stores to [create the feeling of a] designated shop as the guest comes into her store,” Coy said. 

Later this year, Ulta Beauty will test the efficacy of dedicated wellness sales associates in certain stores. Until then, the retailer is ramping up the wellness education of its consumer-facing associates. “We’re focusing on staffing our wellness segments with educated sales associates that can answer questions but still allow the guests an environment where they feel comfortable shopping.” 

As far as the digital landing page, Coy is planning an expansion of brand- and topic-focused storytelling that will include educational guides and more editorialized content. These will roll out in 2025 to drive digital shoppers to the online Wellness Shop. 

If and how the wellness curation is welcomed into Ulta Beauty’s 500 Target shop-in-shop locations is a “future conversation,” Coy told Glossy. 

In terms of the brands winning sales in The Wellness Shop today, Coy told Glossy that Lemme’s $30-$40 supplements; Divi scalp-focused hair care, which averages about $34 per SKU; Magic Molecule’s $32 antimicrobial skin spray; and Neom Wellbeing’s $24 mood-focused fragrance oils are standouts. 

Previous test-and-learn moments have led to the expansion of sexual wellness and intimate care, which started as online exclusives and have since been added to the in-store wellness curation, Coy said. New launches in this category include Honey Pot menstrual products and Joylux, which offers a red light intimate wellness device for $395, among others. 

So far, price has not been a barrier, Coy told Glossy. “It really runs from mass to masstige to prestige, in terms of some of our offerings. We’re not really seeing a [pricing] sweet spot [yet],” she said. “It’s [more about] meeting the guests where they are and at what they want to spend, … so we have a broad [pricepoint] offering.” 

Ulta Beauty’s revenue was $11.3 billion for the fiscal year ending on October 31, 2024, marking a 4.44% year-over-year increase. The retailer does not break revenue into categories for earnings reports.

Ulta Beauty’s primary competition for wellness shoppers includes mass stores like Walmart and Target, the latter of which added around 1,000 new wellness offerings in 2024, according to previous Glossy reporting. Meanwhile, Sephora offers a limited selection of supplements, sexual wellness and intimate care, much of which are online exclusives.

The expansion of Ulta Beauty’s The Wellness Shop coincides with the large-scale closures of American drugstores last year which are expected to continue in the coming year. As previously reported by Glossy, CVS closed 586 locations, Rite Aid closed 408 stores, and Walgreens closed 259 locations in 2024 alone, which has created “pharmacy deserts” that are particularly prevalent in the Midwest. 

“We’re definitely tracking where there are drugstore closures, not only looking at what we can do for our guests in terms of accessibility of products, but also educating associates to help guide them through wellness and also other journeys in the store,” Coy told Glossy. 

“Overall, the consumer behavior and landscape [around pharmacies] is changing after the pandemic,” Aditya Kaushik, an analyst at Coresight market research, told Glossy. This includes more online shopping and fewer visits to brick-and-mortar drugstores. 

What’s more, heavyweights in the nutrition space, like Vitamin Shoppe and GNC, have had mounting financial problems since the pandemic. The former, which has 691 locations in the U.S., filed for bankruptcy at the end of 2024. Meanwhile, GNC filed for bankruptcy in 2020 and closed around 1,200 stores. According to reporting by CNN, GLP-1 nutritional support for those taking Ozempic-like drugs is now the primary focus for the remaining 2,200 GNC retail locations. 

The global wellness industry was valued at $6.8 trillion last year and is expected to reach $9 trillion in the next three years, doubling its size in 2019, according to industry trade group Global Wellness Institute.

According to Diana Smith, associate director of retail and e-commerce at Mintel market research firm, the thousands of drugstore and supplement store closures in 2024 have created a growing opportunity for beauty retailers to become the primary wellness retailer of non-prescription products. 

“As drugstores close and consumers’ access to wellness products diminishes, the retail industry is likely to adapt by more aggressively trying to capture consumers open to a shift to alternative retail locations,” Smith told Glossy. She said a foot race to win wellness shoppers is already underway, with mass retailers and Amazon in the best position to win sales. 

Smith believes that drugstores are likely to rebound in the coming years by refocusing on holistic healthcare management centers that fill a gap in patient care somewhere between urgent care, a walk-in clinic and a traditional pharmacy. This will translate to smaller stores that offer medical-focused care that retailers cannot. 

“Consumers are increasingly interested in drugstores rebranding themselves as healthcare centers that integrate physical, mental and emotional wellbeing services,” Smith said. “This presents an opportunity for drugstores to expand their offerings beyond traditional products and into areas such as personalized health solutions, nutritional services and mental health resources.” 

This also means an opportunity for beauty-focused retailers to absorb non-medicated wellness offerings that no longer make sense at drugstores. 

For Ulta Beauty, spotting the overlap was easy. “We know that about 72% of our guests who are shopping us for beauty are prioritizing wellness [in their lives] and 79% view [wellness] as encompassing physical, mental and emotional wellbeing, so they are crossing over in their purchases,” Coy said. “We’re committed to expanding, refining and simplifying this fragmented category for our guests so they can have a single-stop-shop for their inside and outside self-care needs.”

Executive moves:

• Tata Harper has stepped down from her role as president of the eponymous line she founded with husband Henry Harper in 2010. She will continue to serve as co-founder and brand ambassador while former Esteé Lauder exec Shay Bennaim is set to take on the role of global brand president. Tata Harper Skincare was acquired by Amorepacific in 2022.
  
• Ulta Beauty announced on Monday that CEO Dave Kimbell has been replaced by COO Kecia Steelman effective this week. Kimbell was with Ulta Beauty for 11 years and served as CEO since 2021. Steelman has been with the retailer since 2014 and was most recently the president and COO. Her new title will be president and CEO.

News to know:

• Sephora announced a partnership with the professional women’s basketball league Unrivaled on Friday. Sephora will be the league’s official and exclusive beauty partner, which includes on- and off-court advertising and programming throughout the multi-year partnership. “Sephora’s dedication to uplifting and empowering emerging brands deeply resonates with a league also looking to make waves as a new, diverse sports property,” said Unrivaled CEO Kirby Porter in a statement.
  
• Procter & Gamble-owned Native personal care is partnering with 75-year-old Mexican soft drink company Jarritos. The collaboration includes deodorant, body wash, lotion, shampoo and conditioner in scents inspired by best-selling Jarritos flavors like watermelon, passion fruit and pineapple. The products will retail for under $14 each exclusively at Target and on Native’s DTC site. 

• The L’Oréal Group is betting big on K-beauty’s second wave with the acquisition of South Korean skin-care brand Dr. G. The brand aligns with the conglomerate’s 2025 focus on dermatological beauty, which includes dermatologist-approved and science-based formulations. Dr. G was founded in Seoul in 2003 by dermatologist Gun Young Ahn. L’Oréal Group purchased the brand from Swiss retail group Migros for an unspecified amount.
  
• BIPOC-focused retailer Thirteen Lune and sister skin-care brand Relevant have been acquired by private equity firm SNR Capital. Thirteen Lune was launched in 2020 by Nyakio Grieco and Patrick Herning. As part of a restructuring, Grieco will take over the CEO role and Herning is set to exit the company.
  
• Spanish conglomerate Puig and color cosmetics brand Charlotte Tilbury have announced an extension to their partnership. Puig took on a majority stake in Charlotte Tilbury in 2020 and, according to this new announcement, will assume full ownership of the brand by 2031.
  
• Walmart employees will now wear body cameras in some U.S. stores as part of a pilot program to deter conflict and prevent theft, according to reporting by CNBC. Walmart is the largest nongovernmental employer in the U.S. 

Stat of the week:

Dubbed “returnuary” online, an avalanche of post-holiday returns is top of mind for retailers. Total returns for the retail industry are projected to reach $890 billion in 2024, according to the National Retail Federation. Retailers estimate that 16.9% of their annual sales in 2024 will be returned, according to the trade group. In an effort to reduce this burden on retailers and brands, 40% of retailers now work with third-party logistics providers who manage returns while 34% have gained additional support through seasonal staff specifically hired to handle returns. 

In the headlines:

How Pati Dubroff became Hollywood’s lead makeup artist, from the Olsen twins to Margot Robbie. On the eve of his retirement, Shiseido CEO Masahiko Uotani reflects on a decade of change at the Japanese giant. Outgoing Ilia CEO Lynda Berkowitz on successfully working with brand founders.

Listen in: 

For this week’s special episode, Glossy Beauty Podcast co-hosts Sara Spruch-Feiner and Lexy Lebsack discuss 2025 industry predictions with Glossy senior reporter Emily Jensen.

Need a Glossy recap? 

Got milk? How milk took over beauty in 2024. How Ozempic changed everything in 2024. The year teen boys discovered beauty. Amazon’s premium beauty strategy for 2025 includes social commerce. Target’s affordable perfume line Fine’ry is going after the men’s market. 2024 was TikTok Shop’s beauty moment. Lessons from Made by Mitchell’s multi-million-dollar success. The fragrance boom is nowhere near over.