Ulta Beauty reported in its Q2 2024 earnings that exclusive brand partnerships now anchor its competitive strategy, according to Retail Dive. The move comes as Target Beauty Studio — Target's prestige beauty expansion launched in 2023 — reaches 250 stores and adds brands Ulta previously sold alone. Ulta's CEO Dave Kimbell told investors the company is prioritizing exclusive product drops and limited-distribution collaborations to defend its position.
The mechanic is access control. Ulta signed exclusive deals with emerging brands like Bubble, Loops Beauty, and Tower 28, meaning those products cannot be purchased at Target, Sephora, or Amazon for a contracted window. The retailer also negotiated exclusive shade extensions and limited-edition SKUs with established lines. According to the earnings call transcript, exclusive products drove a disproportionate share of basket additions and repeat visits in the quarter, though Ulta did not break out exact figures.
This works because exclusivity compresses decision time and removes the reflex to comparison-shop. A shopper who wants the new Bubble cleanser cannot browse three retailers and choose the best price or fastest shipping. She goes to Ulta or waits. That reduces churn and locks the brand into Ulta's merchandising calendar. For the emerging brand, the trade is clear: lower initial distribution in exchange for Ulta's 1,400-store footprint, co-marketing budget, and in-store placement. The brand gets scale without cannibalizing its own margin through Amazon's fee stack or Target's vendor terms.
A small physical-product brand can run the same play without Ulta's retail fleet. Negotiate exclusive distribution windows with one regional or category-specific retailer — a local gift chain, a niche outdoor shop, a subscription box with 5,000+ active members. The contract is simple: they get 90-day exclusivity in their channel in exchange for guaranteed placement, co-marketing on their email list, and a committed buy of 500 to 1,000 units. You supply the retailer with pre-written email copy, product photography, and a bundled offer so they can move the inventory fast. The exclusivity window gives them reason to prioritize your product in their messaging, and it trains your brand's customers to check that retailer first. After 90 days, you expand distribution, but the initial retailer keeps a variant or colorway no one else carries. You've built a small moat and a repeat channel without spending on Meta or Google.
The broader pattern is that distribution scarcity now outperforms distribution ubiquity for premium physical goods. Ulta is not fighting Target by being everywhere; it is fighting by being the only place for specific products customers already want. A founder with a new beverage or candle or tool does not need to be in 1,000 stores on day one. You need to be the only option in 10 stores whose customers will drive 20 minutes to buy it. Build that, then expand the radius.