Most stores saw fewer visits from shoppers this Black Friday. One cosmetics retail was the exception.
Foot traffic at Ulta Beauty was up 16.5% over Black Friday 2021, according to data provider Placer.ai. Visits to Ulta were also up 31% over Black Friday 2019, before the pandemic began.
By contrast, most retailers saw their foot traffic remain the same or decrease slightly over last year’s Black Friday, according to Placer.ai. Traffic decreased by 5.3% at Walmart and 2% at Target. At TJ Maxx, one of the largest off-price retailers, traffic was even with Black Friday 2021.
Stagnant or declining Black Friday foot traffic suggests that it is losing importance as a shopping event as retailers start holiday sales earlier in the season, said Ethan Chernofsky, vice president of marketing at Placer.ai. But beauty, health, and wellness products like those sold at Ulta are among the items that can still draw customers to physical stores, Chernofsky said.
Like other retailers, Ulta started offering discounts online and in-store early in the week instead of waiting until Black Friday or Cyber Monday, Piper Sandler analyst Korinne Wolfmeyer wrote in a Monday research note.
Yet the chain’s stores, including the fragrance section, still attracted Black Friday shoppers, she added.
“Despite nearly identical deals offered online and all week, people still wanted to be there physically on Black Friday,” Wolfmeyer wrote.
Unfortunately for the brand, shopping in person on Black Friday was consumers’ only choice for much of the day. According to Crain’s Chicago Business, Ulta’s website was down at the start of the Black Friday holiday.
Beauty retailers have thrived in 2022, even as COVID, inflation, and a degrading economy have challenged others
Several factors likely helped drive customers to Ulta and other beauty retailers last Friday, Chernofsky said.
After roughly two years of COVID restrictions, many people are returning to offices, conferences, and other in-person occasions where wearing makeup makes sense, he told Insider.
Many consumers are still interested in health and wellness products, he added. For instance, Ulta, Sephora, and other beauty retailers have become destinations for new skincare products.
A worsening economy might have also contributed. Shoppers have historically turned to cosmetics as an affordable luxury when they need to cut back on spending, a phenomenon known as the lipstick index.
But Chernofsky said that Ulta’s Black Friday performance is just the latest example of how the company, and beauty sales as a whole, has become resilient no matter the economic backdrop.
At the start of 2022, consumers were challenged by a winter surge in COVID cases, he said. Then, as COVID restrictions eased later in the year, persistent inflation spurred some consumers to cut back on nonessential spending.
All the while, Ulta and Sephora were “among the best performers in all of retail,” Chernofsky said.
Ulta beat analysts’ expectations for its earnings. The company’s stock also hit a record high of $461 a share during intra-day trading on Monday, Crain’s Chicago Business reported. Ulta’s stock is up roughly 8% so far in 2022.
“I don’t know that there’s been a more volatile environment than what we’ve seen in the last year,” Chernofsky said. “If anyone’s strengths have enabled them to succeed, even in this difficult environment, health and beauty has become one of the prime examples.”