Beauty Retailers Shift From Product Exclusives to Brand Partnerships

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6.9.2026

Quick Facts

Approximately 50% of Sephora’s assortment comprises exclusive or limited-distribution brands
U.S. prestige beauty sales rose 8% in first half of 2024 to $15.3 billion
Online beauty sales expected to reach nearly one-third of global sales by 2030

Beauty retailers are moving away from traditional product exclusives toward comprehensive brand partnerships as the $646.2 billion industry evolves. Vacation’s entry into Sephora after securing distribution at Ulta Beauty, Target and Costco demonstrates this shift in retailer strategy.

Sephora still maintains approximately 50% of its assortment as exclusive or limited-distribution brands. But the focus has changed from simple product launches to deeper brand building partnerships.

“At Sephora, merchants are often deeply embedded in how an exclusive brand is built, from assortment and positioning to storytelling and pricing,” said Taylor deDiego, Brand Strategy Consultant and Founder of Beauty Work Friends.

The numbers support this strategic pivot. U.S. prestige beauty sales grew 8% in the first half of 2024 to $15.3 billion, while mass beauty remained flat at $30.4 billion. E-commerce accounted for 41% of all beauty and personal care sales during this period.

“An accelerated bifurcation is emerging in the beauty industry highlighted by the continued strong growth in prestige in relation to the mass market,” said Larissa Jensen, global beauty industry advisor at Circana.

Retailers are adapting their approaches accordingly. Sephora employs curation strategies, hand-picking brands that are new, buzzing, or established luxury names. The retailer’s Beauty Insider loyalty program hit 45 million members in North America in 2025.

Ulta Beauty is strengthening relationships with indie brands beyond simple distribution. “Emerging brands aren’t just looking for distribution; they’re looking for partnership,” according to industry analysis. “They want retail partners who are invested in helping them build enduring brands, not simply providing shelf space.”

Online channels drive much of this change. By 2030, digital platforms are expected to account for nearly one-third of global beauty sales, up from 26% in 2024. The beauty industry generated $646.2 billion in 2024, with $88.47 billion from online purchases.

Fragrance and hair care led category growth in prestige beauty during the first half of 2024. Fragrance sales increased 12% while hair care sales rose 10% compared to the same period in 2023.

The shift reflects broader retail dynamics where scale alone no longer guarantees success. Success now depends on retailers’ ability to support brand growth through storytelling, cultural relevance, and comprehensive consumer engagement rather than exclusive product access.