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How to Win at Ulta Beauty

16 Apr 2024

Seven tips for building effective strategic partnerships with the nation’s second-largest beauty retailer.

While the idea of consumers looking “for what’s new and what’s next” is true in most product categories, “in beauty, there really is an insatiable appetite for discovering new products, new services, new experiences [and] new ways to explore the category,” said Ulta Beauty CEO Dave Kimbell, while speaking last January at the National Retail Federation’s Big Show.

And with the year-over-year growth that Ulta Beauty has experienced, it seems clear that the retailer has been successfully feeding those appetites.

Among the latest example of Ulta’s talent for “scoring” with new experiences can be found through the partnership it hatched with beauty brand NYX Professional Makeup leveraging this year’s Super Bowl. With the National Football League enjoying a spike in female TV viewership (thanks to the unexpected presence of a certain global popstar), NYX had found the ideal timing for the launch of its first Super Bowl TV spot, which also boasted the brand’s first celebrity partnership. In the spot, which promoted the brand’s 18-shade line of Duck Plump Extreme Plumping Gloss, rapper Cardi B wore a “Cherry Spice” shade that is available exclusively on the Ulta and NYX websites.

To boost the Feb. 1 rollout of Cherry Spice, NYX and Ulta also hosted experiential in-store events across the U.S. where shoppers could sample the gloss and win free products.

Such continuous innovation across both its digital assets and brick-and-mortar locations helped Ulta grow 9.8% in the company’s most recent fiscal year.

Speaking at another major industry event (Shoptalk) last spring, Kimbell said the “heart” of Ulta is the still-growing store footprint of 1,350-plus stand-alone stores and 350 units inside Target locations. The retailer works hard to create an inviting, exciting, and inspiring experience that lets shoppers touch, smell and try products with assistance from knowledgeable store associates, he explained.

Ulta is, of course, also investing heavily in digital capabilities that complement and supplement the in-store activity to ensure a seamless, intuitive commerce experience, according to Kimbell.

And uniting both experiences is the retailer’s loyalty program. Boasting 42 million members who account for 95% of all sales, the program continues to be a sweet spot for Ulta, brand partners, and shoppers alike — so much so that the program relaunched in January with expanded benefits under a new name: Ultamate Rewards is now, more simply, Ulta Beauty Rewards. (Among the new perks: members can choose their birthday gift from a selection of options rather than receiving a predetermined product.)

With shopper loyalty so high, winning with Ulta has become critical to the success of national beauty brands. Here are seven ways brands can win with this important retailer:

  1. Personalization is key. Leverage Ulta’s massive loyalty base by using the insights into purchase behavior it provides to find opportunities for offering similar products that shoppers might not have considered before.
  2. Tap into the upgrades. Partner with Ulta as it continues building out the new loyalty perks to find opportunities for driving both brand awareness and trial with shoppers.
  3. Find the beauty in omnichannel. Ulta’s strength across brick-and-mortar, app, and website gives brands a great opportunity to experiment across platforms. From digital interactions to in-store games and sweepstakes, there is a potentially huge payoff in optimizing the retailer’s omnichannel presence.
  4. “Makeup” your mind on AI. Ulta is leaning into AI technology with innovations like in-store robots for manicures and eyelash applications. Keep an eye out to see where your brand can help the retailer introduce or amplify innovation in your categories.
  5. Take initiative. Be the first brand in your category to deliver newness and innovation, especially programs timed around major events or cultural trends.
  6. Don’t use “concealer” on your brand’s goals. Find the areas where Ulta’s priorities align with your own to develop strategies for winning in the omnichannel arena.
  7. Lean into UB Media. Utilize Ulta Beauty’s retail media network to amplify your promotions in relevant ways.

Mars United Commerce’s Customer Development practice is an unrivaled team of in-market commerce experts who simplify the complexity of retail. Located in Bentonville, Minneapolis, Cincinnati and the “backyards” of other key retailers, they provide deep knowledge of the retailer, expertise in key business areas (like strategy, media and creative), and door-opening personal relationships with key executives to deliver an unmatched level of business success for clients across accounts, channels and shopper engagement platforms.

To learn more about Ulta Beauty and how Mars United Commerce can help you win with this critical retailer, contact Meghan Heltne at [email protected].

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