For hair brands, the opportunities for new entrants or launches on Sephora and Ulta are varied.
New entrants on Sephora’s platform may find better opportunities in the styling category. Traffic to Sephora’s styling page has grown 70% year over year and online transaction volume in the category rose 27% in the same time period according to Gartner L2’s report on the topic. In addition, Sephora has increased loyalty-level samples of styling products. In 2018, styling products accounted for 18% of hair samples, up from 7% the previous year.
On Ulta, the care and styling categories remain the most visited within the retailer’s hair ecosystem, yet the categories are consistently dominated by a small number of brands. From July 2018 through March 2019, only seven unique brands owned all products appearing within the first two rows of the shampoo and conditioner category pages. Of the brands appearing at the top of the page, no single brand displayed more than 30% of its care or styling assortment, indicating that these categories on Ulta are driven by hero SKUs. For brands that exclusively play in the care category, Ulta site media investments may be necessary to ensure brand visibility in priority shampoo and conditioner categories. As Ulta’s most-visited categories become more rigid, brands should explore opportunities on long-tail, growing product categories like dry shampoo, hair masks, texturizers and hair oils—all of which saw traffic grow by at least 20% year over year.
These category pages also have more movement among brands appearing at the top of the page. On average, each product category had at least eleven unique brands appear in the first two rows, suggesting it may be easier for brands to drive rank on the long-tail of the retailer’s most-visited category pages.