Among the stores Gen Z shops the most, Sephora and Ulta are neck-and-neck for the top beauty stores.
Piper Sandler's bi-annual survey ranks the top brands among Gen Z. Ulta was the top beauty shopping destination for the last few periods. But in the most recent survey, Sephora moved to the number one slot.
The change could be due to the income level of the survey respondents, Sandler's analysts noted. This year's respondents leaned more toward high-income than previous years. The analysts said they would monitor the next few surveys to know for sure if Sephora is gaining market share
The two beauty chains are very similar — both sell hundreds of cosmetics, fragrances, and hair brands, as well as their own private label brands.
But the shopping experience can be quite different.
Sephora focuses more on high-end brands. The company is owned by LVMH, the luxury conglomerate which owns brands like Louis Vuitton and Dior.
Sephora had favorable growth in the first half of the year, LVMH chief financial officer Jean-Jacques Guiony told investors in a July earnings call.
Meanwhile, Ulta carries more brands and has a wider range of products and price points. The brand has seen growth this year as well. According to the company's latest earnings, net sales increased by 10%.
The Piper Sandler survey also found that both brands have some of the most successful loyalty programs among Gen Z. Of the female teens surveyed with membership accounts, 67% are Sephora Beauty Insiders, and 60% are ULTAmate rewards members.
I visited Sephora and Ulta to see how they compare and what draws Gen Z to both brands.