Evolution is essential to retail success, even when you’re on top — a maxim Ulta Beauty has embraced over the past year as the industry reinvented itself a rapid pace, according to Kecia Steelman, COO, President of International during her opening keynote at retailX 2021. The retail beauty leader didn’t rest on its laurels; it took the opportunity to expand in new ways while fine-tuning its existing strengths.
Ulta Beauty embraced three imperatives to maintain an upward trajectory even after it was forced to temporarily close 1,300 stores: reimagine, redefine and revive. This focus helped the retailer successfully navigate through its pivot to ecommerce, its return to omnichannel and its preparation for the future. Most importantly, it has helped the brand keep up with the rapidly changing needs of its customers.
“We’re more connected now than ever before, and we must remain hyper-relevant to win the share of the hearts and the wallets of all of our guests,” said Steelman. “You have to have that true connection with them. We believe that beauty moves at the speed of culture, and I can’t think of a time when that’s more important than it is today.”
Steelman discussed several areas where Ulta Beauty has been continuously evolving its own efforts over the past year:
- Keeping pace with digital developments: Ulta Beauty has been a digital trendsetter, launching powerful tools like the GLAMlab try-on platform, to meet shoppers where and how they want to discover and shop;
- Finding new physical opportunities: As in-store experiences returned, Ulta Beauty rolled out a store-in-store experience in partnership with Target that exposed a whole new shopper base to Ulta while providing Target with a fresh in-store experience:
- Committing to corporate responsibility: Shoppers expect retailers to do more than voice their support of good causes, and Ulta Beauty has made efforts across environmental, social and diversity programs to truly support its beliefs.
Evolving Tech for New Makeup Try-On Demands Pays Dividends
Many retailers that were forced to shutter stores due to lockdowns looked for ways to succeed in ecommerce, but Ulta Beauty’s established offerings provided an opportunity for the retailer to reach the next level. The retailer’s app was already a useful tool, and Ulta Beauty continued to enhance its possibilities with the current atmosphere in mind.
“We embrace innovation, tools and engaging experiences across all channels to really meet the guests where they are, in the ways they want to shop with the tools that they need, in order to help improve the entire overall shopping experience,” said Steelman. “We saw more than double the app downloads in 2020, which reinforces the shift to online shopping.”
One of the key elements of a beauty shopping experience is the try-on, but physical samples can be intimidating even months into a post-pandemic environment. Ulta Beauty rose to the challenge through its GLAMlab virtual makeup try-on, which lets shoppers test out a massive variety of samples without having to touch in-store testers or even leave their homes.
The app includes 7,400 different products, and shoppers embraced the opportunity by trying on 171 million different shades of makeup in 2020 alone, according to Steelman. Additionally, 80% of GLAMlab users are return customers — demonstrating that this technology has become a staple among Ulta Beauty’s regular customers and a legitimate replacement for physical try-ons.
“They’re seeing the value in the experience and they’re leveraging it to make their purchasing decisions,” said Steelman. “This was so important for us during COVID because they were not allowed to use our testers, so this was a way they could continue to engage with the try-on experience while keeping themselves safe.”
A Great Store-in-Store Experience Benefits Everyone Involved
The revival of brick-and-mortar following lockdowns has likewise required retailers to rethink where and how they engage with shoppers. One of the beauty retailer’s biggest innovations has been the launch of 1,000–square-foot store-in-stores at strategic Target locations, with 100 planned for 2021 alone.
This could be a major growth opportunity for Ulta Beauty; Steelman noted that Target serves many shoppers who aren’t Ulta customers, and the exposure could open up new demographics for the beauty retailer. Target itself will benefit with the addition of a new assortment of products that expand its presence in beauty, while the brands themselves will have a fresh opportunity for product discovery in a smaller, highlighted space.
“This wasn’t about taking an Ulta Beauty store and plopping it into a Target,” said Steelman. “It was about thinking through our SKUs and emerging brands, and opening the possibility for this assortment to be, in a highly curated way, offered to a new guest.”
Retailers Must ‘Walk the Walk’ When They Support Social Causes
Shoppers today expect more corporate responsibility from their brands than ever before, from environmental concerns to increased diversity among staff. Shoppers also are more informed than ever, and they demand that the retailers they frequent actually act on the issues they claim to support.
Ulta Beauty is taking steps to source 50% of its packaging from recycled or bio-sourced materials; has raised more than $37 million for efforts to reduce breast cancer; and raised more than $1 million for Save the Children over the past year. Diversity and inclusion are important as well, and the phrase ‘The Possibilities Are Beautiful’ isn’t just a slogan for an ad campaign but Ulta Beauty’s North Star, according to Steelman.
“You have to be purpose-driven, you have to be diversity-forward and that needs to be your North Star,” said Steelman. “You need to act in a way that’s very transparent with social responsibility and authenticity. As the saying goes, you can’t just talk the talk, you have to walk the walk — and they’re going to hold you accountable to it.”
Hiring is just one part of Ulta’s commitment to diversity. Steelman takes the time to actually meet with African-American, LGBTQA+, AAPI and Latinx associates to better understand their needs and help them feel connected to the company. “With this new generation of the workforce, it’s extremely important that they understand how they fit into the greater organization and the role that you can play in helping them be a part of something bigger than just themselves,” she said.
Continual innovation across digital and physical channels, as well as an open and clear embrace of forward-looking social issues, are a major part of what helps keep Ulta Beauty strong during both easy and challenging periods. There is never a right time for complacency — Ulta Beauty is always thinking about what’s coming next.
“As the beauty industry continues to reimagine the experiences, and guests and associates redefine how we engage, it’s really important that we continue to look at ways in which we can disrupt the world of retail,” said Steelman.