Will Amazon Do To Beauty Supply Shops What It Did To The Book Store?

Amazon.com, Inc. (NASDAQ: AMZN) announced Thursday that Amazon's "Prime Now has added its first beauty brand to the one-hour delivery service with Chicago-based store, Merz Apothecary."

Further, starting Thursday, "Prime members in Chicago can now shop all their favorite Merz Apothecary items such as personal care, beauty and natural health products and have those items conveniently delivered right to their door in as little as an hour."

Naturally, some investors have drawn a parallel of Amazon's entrance into the beauty supply market as potentially leading to similar results as with brick-and-mortar stores when Amazon entered into the book market.

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Of note, Barnes & Noble, Inc. (NYSE: BKS) experienced significant sales declines while Borders closed altogether. Will companies like Sally Beauty Holdings, Inc. (NYSE: SBH) and Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ: ULTA) suffer the same or similar fates?

Both Sally Beauty and Ulta's shares were down more than 1 percent intraday Thursday. Although some of Ulta's selloff may have been due to rumors of a secondary stock offering.

While comparisons are logical, it is possible that Amazon's entrance into the book market and into the beauty market are two different scenarios. When Amazon entered the book market, the internet was still in its infancy, but now the internet has been stable and established for more than 20 years. This is of significance.

Consumers have been able to order beauty supplies on the internet for a while now, and if consumers remain loyal to Ulta or Sally Beauty, then Amazon will have to deliver their beauty supplies, too.

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