Shaky Times for Big Retail Hasn’t Slowed Down Ulta Beauty


We live in a media-driven generation. If you happen to look up from your phone one day, you’d quickly realize everyone around you is taking photos of themselves and their grilled vegetable paninis. Then when you look back down at your phone, you’ll see your social media feed filled with more pictures of people they took with their phones. Looking photo-ready is of the utmost importance for consumers these days, and Ulta Beauty is one of the strongest retailers in this sector.

In an era marred by low gains for big retail stores, Ulta has showed 20% jumps in annual revenue for over a decade. Big box stores like Sears and Macy’s reveal plans to close underperforming outlets while, as reported by Chainstorage “Shares of Ulta rose 38% last year… and its annual revenue has quadrupled to $3.9 billion since it went public 10 years ago”. This growth can be attributed in part to aggressive store expansion with a focus on urban strip malls (as opposed to increasingly vacant shopping centres) which attract more traffic and are closer to the customers they serve.


Broadening their product range

Ulta has also taken a different approach to their 10,000 square foot stores. As per Bloomberg “They are changing the way people shop as they have allowed people to buy both mass and prestige.” A customer can buy products from a list of 500 brands ranging from low end products to high end beauty supplies. This mixture of “mass and prestige” (as Bloomberg refers to it) was something Ulta has continually used to attract customers and was a new approach for a large scale beauty retailer. Chain Storage estimates “the retailer (Ulta) will open 100 stores this year, including its first-ever location in Manhattan.”

When looking at the current demographics in the beauty market, Beauty Stat states “consumption patterns are no longer defined by traditional demographic segments such as age, gender, location or income.” This type of shift makes it harder for companies to target specific parts of the market. Ulta noticed this trend early on and took advantage of it by ensuring there was something for everyone in their stores making their customer range much wider.

The company’s new quest is to constantly chase high end retail brands like Estee Lauder in order to offer a wider range of products. Customers are defining their individual style and in the process mixing and matching to get creative. Ulta has realized customers’ dream of the one-stop shop for their beauty needs.


Dipping their toes into tech

Ulta has recently introduced a smartphone app called ‘Glam Lab’ which allows its users to take selfies and test out various products on their face. This incredible advancement clearly shows Ulta understands its customers phone driven day-to-day. The company can now go anywhere with their customers in a strategic display of digital marketing and brand reinforcement.


Adding services to their assortment

At any of the retailer’s 950 locations, customers can browse products, see a skin therapist, or they can get their hair cut and styled while receiving tips on products. There is always a reason for its customers to repeat shop with the brand. It was this format Bloomberg said “combining a one-stop retail model with salon services — helped it overtake Sephora in 2015 to become the largest beauty-specialist retailer in the U.S.”

Staving off the slump that seems to be hitting many large retailers, this company continues to make choices which perfectly reflect what its customers want and continues to grow because of their wise choices and stellar foresight.