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

Amazon.com, Inc. AMZN announced Friday 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 Friday, 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 began drawing the parallel of Amazon's entrance into the beauty supply market could lead to similar results to brick and mortar stores as when Amazon entered into the book market.

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If you need a reminder, Barnes & Noble, Inc. BKS experienced significant sales declines while Borders closed altogether. Will companies like Sally Beauty Holdings, Inc. SBH and Ulta Salon, Cosmetics & Fragrance, Inc. ULTA suffer the same or similar fates?

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

My take is 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. Does this change much?

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

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