Walmart adds to its beauty offerings with more “affordable luxuries”

Walmart is further expanding its reach in the beauty market. The big-box retailer announced another round of Walmart Start, its program that launches smaller beauty brands at the store. It’s also investing more in premium beauty products. Meanwhile, in recent earnings results, Ulta Beauty has reported it’s lost some market share, and Sephora is giving its stores a makeover.

You might not associate Walmart, a store whose tagline is “every day low prices,” with fancy face creams. But Joseph Nunes, a marketing professor at the University of Southern California’s Marshall School of Business, said they’re considered affordable luxuries. 

“Those are the products that are sort of within everybody’s budget and they’re quite prone to buy when they’re in the shopping mood,” said Nunes.

And Nunes said, over the years, people have become less picky about where they buy their lotions and potions. 

“There are a lot of categories where the retail experience is less important,” he said.

That’s partly because stores like Ulta and Sephora have done away with the glass-case experience found at department stores.

“So you’re already in the space where you’re open to buying it at a retailer” versus directly from a brand rep at a counter, said Amarachi Chukwuma, a beauty consultant at market intelligence agency Mintel. 

Meanwhile, for Walmart, beauty is likely a safe bet. David Swartz at Morningstar said the category has bigger margins than, say, apparel. It also has an increasingly bigger reach, thanks to social media. Sales in the prestige beauty market grew by 7% last year. 

“For the most part, it’s an industry that’s constantly cranking out new products and also new brands,” Swartz said.

That’s because consumers tend to be willing to experiment, and beauty products require regular restocking. Many have come to see them as a necessity. 

“A lot of women and girls see it as part of their wellness routine,” he said.

Which means you’re more likely to buy it, even when you’re watching your wallet.