Target & Ulta Beauty Partnership ENDS In 2026 - Retail's Biggest Breakup | Fast Five Shorts
Target and Ulta Beauty are ending their successful shop-in-shop partnership in August 2026, shocking the retail world. Sponsored by the A&M Consumer and Retail Group, Mirakl, Ocampo Capital, Infios, and Quorso.
Chris delivers harsh criticism of Target's strategy while Anne worries about the retailer's future without one of its biggest traffic drivers. A must-watch analysis of retail's biggest breakup.
For the full episode head here: youtu.be/wKzV_5mqg64
Topics: Target Ulta partnership, retail strategy, beauty category, shop-in-shop concepts
#Target #Ulta #beauty #retail #partnership #strategy
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Transcript
Chris just can't wait to get to it.
Speaker A: t agreement ends in August of: Speaker A:Until then, the experience will continue in stores and online with Ulta Beauty Rewards remaining active for eligible purchases.
Speaker A:Both companies emphasize that they will continue to maintain product availability and a seamless shopping experience until the partnership officially ends.
Speaker A:Don't think it'd be funny if they're just like Matt, we're just going to give up.
Speaker A:Like, yes, of course you have to maintain this to.
Speaker B:I actually wish they would just say that.
Speaker B:Yeah, I know.
Speaker A:All right.
Speaker A:Well Chris, this also happens to be the A and M put you on the spot question of the week.
Speaker B:All right.
Speaker A:They want to know, Chris, given the resilience of the beauty segment in retail and Target's challenges, does the end of this partnership more strongly signal how retailers should refocus on their standalone retail experience over a store and store, or does it signal just how deep Target struggles go?
Speaker B:Oh man, that is such a good question.
Speaker B:That actually may be my, my all time favorite put you on the spot question.
Speaker B:Like without a doubt because I think the answer is it.
Speaker B:It signals both, quite frankly.
Speaker B:And it also helps explain why Target stock took took a major dip today with the new CEO announcement.
Speaker B:You know, if I look back on this headline, let's just keep it on the headline.
Speaker B:Yep, Target appears to have crapped the bet on this one and Lord knows the reasons why Alta is pulling out.
Speaker B:You know, but it is a big, big about face and it's an about face that's happened rather quickly.
Speaker B:Was it operations?
Speaker B:Was it the brand standards?
Speaker B:Who knows?
Speaker B:Time will tell.
Speaker B:We'll probably get answers to that over time.
Speaker B:But now Target is faced with a really tough situation.
Speaker B:It has to comp against the loss of what has been publicly stated as one of its biggest comp drivers ever since the partnership started.
Speaker B:At least that is my recollection of reading the recent earnings reports for the last two years.
Speaker A:It's every call, it's been part of every earnings.
Speaker A:Right.
Speaker B:It has.
Speaker B:Right.
Speaker B:I'm not making that up.
Speaker B:Right?
Speaker A:No.
Speaker B:So all of which goes back to the broader question now of shop and shops, which A and M smartly is asking.
Speaker B:You have to tread carefully into them and you have to ask yourself the question, are you a mall or are you a retailer?
Speaker B:Under Brian Cornell, Target has overtly tried to become or under Brian Cornell, I have to say in the past tense now, Target overtly tried to become a mall and the next place it's going to bite them in the rear is with the CVS partnership.
Speaker B:Because food is medicine is the biggest trend that's going to shape grocery over the next 10 years and even longer.
Speaker B:And Target gave away the RX tie ins to that trend.
Speaker B:The impacts of that aren't felt yet either, but they soon are going to be as Walmart and other grocers get smarter on how to tailor their assortments and their RX loyalty reward programs to capitalize on that trend.
Speaker B:Where Target's going to be hamstring, they're going to be having to work through CVS with that.
Speaker B:That's going to be impossible.
Speaker B:So that's going to mean less and less traffic to Target in the years to come.
Speaker B:So yet it's yet another sign to me and this is, I thought about the best quote to, to capture my thoughts on Target and Brian Cornell's tenure.
Speaker B:A rival CEO exec told me about Brian Cornell one time that Brian, this is a CEO of a ten plus billion dollar retailer.
Speaker B:This is a real quote.
Speaker B:He said to me, Brian Cornell wouldn't understand my strategy if I wrote it down and handed it to him on a cocktail napkin.
Speaker B:That's what's at play here folks.
Speaker B:And that's what this, that's what this headline says to me in terms of looking back on everything that's happened under his tenure over the last, what is it, 11 years.
Speaker B:And I think he's been there.
Speaker A:I think so.
Speaker A:2014.
Speaker A:Yeah.
Speaker A:So, yeah, this cuts, man.
Speaker A:I just, I read this and I was just, I'm again, I'm really bummed that this is happening.
Speaker A:I don't know how else to say it.
Speaker A:I, I do think though, this is, this is really going to be something that the street's going to be watching, that consumers are going to be watching to really see.
Speaker A:Because this is an opportunity to see have Target show what it's made of.
Speaker A:Can Rick Gomez and the team bring the right product assortment into the store?
Speaker A:That's going to supplement what this, you know, the Ulta beauty traffic drivers were.
Speaker A:And that's where that, like I've, I've said this to several people, like beauty especially, but Target in general, it's about this creativity, this design at this price point that amassed audience can adopt.
Speaker A:And I really worry because for the last several years Target has been decreasing the priority of making things uniquely Target.
Speaker A:They've Been decreasing.
Speaker B:The other problem with the most decreasing.
Speaker A:The decreasing the brand.
Speaker A:Like the priority has been on how do we compete with Amazon and Walmart.
Speaker A:And that's a, that's a race to the bottom.
Speaker A:You're never going to beat them on price.
Speaker A:You're never going to beat them.
Speaker A:And like people are going to, people are going to Walmart and Amazon right now and there's no way to stop them.
Speaker A:Had that core, that identity, that Target, that thing that made you so strong.
Speaker A:And beauty is one of these key categories where you going to need to figure out how to bring those people back and how to create that, how to really invest there in the type of beauty product that's going to reach that mass audience.
Speaker A:And that's where I worry.
Speaker A:I'm like Target, you got to focus inward right now on yourself.
Speaker A:Quit worrying about the shop and shops and these other things.
Speaker A:How are you going to get back to core Target which is really establishing yourself as a brand that has a point of view.
Speaker B:Yeah.
Speaker B:100 and that.
Speaker B:And, and you're, you're dead right.
Speaker B:Like you, you have to keep control of those businesses.
Speaker B:That's why I made the point about pharmacy.
Speaker B:Like right, if Walmart can run a pharmacy, Costco can run a pharmacy, Safeway Albertsons can run a pharmacy, why can't you Target like.
Speaker B:Well, that was a really short sighted move too in retrospect, in my opinion.
Speaker B:So like, you know, and it's just gonna, it's just gonna hurt them in the long run.
Speaker B:And, and the good news though, Ann, if I have a silver lining on this, I saw Michael Fidelke, the new CEO's video on LinkedIn today.
Speaker B:He was talking about bringing back design and the design merchandising.
Speaker B:So I think that's the right thing.
Speaker B:Now there's a lot of other things that you know, may or that could give or take with that video, but I think that is still the right approach which says what you said and I'm curious what other people think of that video.
Speaker B:Drop me a message on LinkedIn, you know, because I'd love to hear your thoughts.
Speaker B:But yeah, interesting time for Target for sure.
