Getting (and Staying) on Shelf at Ulta Beauty: 3 Key Strategies to Keep in Mind
“Ulta Beauty is thriving under the leadership of CEO, Dave Kimbell. The retailer boasts impressive growth this year, with sales skyrocketing; makeup up 51%, skincare up 66%, and bath and body up 102%. As a result, many brands are clamoring to get on the shelves of the powerhouse beauty retailer. We sat down with Dave Kimbell to get the inside scoop on Ulta’s success and how you—small and women-of-color-owned brands— can be a part of it. What we learned is that there are three key strategies that Ulta Beauty has employed for its own meteoric rise that are helpful for brands seeking to grace their shelves.”
#1. Find a fit: Know your brand and your consumer, intimately.
Mr. Kimbell made clear why he thinks Ulta has been thriving over the past few years:
“What differentiates us goes back to our founding (two founders in Chicago with a simple insight, the way beauty enthusiasts want to engage was not being served, by bringing all things beauty under one roof had never been done, allowing guests to curate). Core ideas: caring for our guests, engaging, inviting, welcoming, nonjudgmental environment, and beauty and wellness were always at the core. Our mission is still unique today.”
The company has a purpose-driven approach to business and is focused on its unique business model. According to the CEO, that clarity is exemplified in four key points:
” Ulta’s focus is not to be anyone else, just to focus on what we do best.”
Ulta is clear on its “why,” “who,” and “how,” this means as a brand itself, the retailer operates from a mission/purpose-driven model and correlates that to how it shows up for its core consumers. Brands that are looking to access Ulta Beauty’s audience should have a clear brand identity that resonates with Ulta’s unique approach of presenting all things beauty under one roof. According to Kimbell, over the last few years, Ulta Beauty has redefined its audience from an older suburban demographic to a decidedly Gen Z and teenage consumer.
Before setting your sights on Ulta, ask yourself the following questions:
- Am I clear on my why/purpose? Is that reflected in every aspect of my brand?
- Who is my consumer? Does he/she shop at Ulta?
- Does my branding appeal to a younger consumer base?
Apply this strategy to your business:
- Develop an ideal customer profile. Marketing to everyone is marketing to no one. So set a clear idea of who you are targeting.
- Learn your customers’ likes and dislikes through data pulled from surveys, polls, and social media insights— make feedback a part of your customer experience and outreach strategies.
#2. Standout: Don’t be afraid to go against the grain!
As many businesses are in the throes of building out robust online operations, Ulta Beauty is leaning into its brick-and-mortar model.
“We are a firm believer in physical stores, announcing the opening of 1,500 new stores—all things beauty,”-Dave Kimbell, CEO
The retailer appears to be doubling down on the in-store model that has helped it to become a household name. However, they are building an innovative digital space that works in tandem with and/or supports the brick-and-mortar operation.
Explaining the role of digital within Ulta’s operation, Kimbell outlined the thinking behind the company’s bold approach:
“What I’d say is that digital is a critical part of our business and total experience. We have tremendous scale [in the range of our biggest competitor]. Some people think about digital penetration of total business, which has been lower for Ulta. This has been because we have a massive, thriving physical store presence with a lot of traffic. Our goal isn’t to drive eComm penetration.”
However, even with its strong stance on sticking with brick and mortar, Kimbell was adamant that the company hasn’t completely dismissed the need for or viability of the digital landscape.
“We are focused on delivering growth on both channels. We do anticipate eComm growing, and although the store is growing in a healthy way too. [We are] also growing a tone of innovation. “
The company has several online tools that have enhanced its digital platform.
“[Ulta also] has a tremendous app [available online and in-store]. We have a digital innovation fund to identify new capabilities and partnerships. I like where we’re positioned and excited about what’s ahead of us.”
As a brand seeking to work with Ulta, how do you feel about their unique approach to digital? Here are a few more questions to think about as you consider the possibility or probability of aligning your brand with this retailer:
- What is most important to you in reaching a consumer? What environment does your brand thrive in?
- Is your brand currently set up to stand out on the shelf? Or have you been positioning your product for online sales?
- If you are online-focused, does Ulta’s digital strategy appeal to your brand? Is Ulta a good fit for your product at this stage?
Apply this strategy to your business:
Don’t feel compelled to go with trends, especially, if those trends don’t support the parts of your business model that are working well and/or are profitable.
#3. Create partnerships that align with your brand objectives.
Ulta Beauty has been working to deepen its relationship with its core audience through partnerships and community-based programs; Google, Target, and the Muse program.
Ulta uses Google Cloud to support its GlamLab virtual try-on experience. GlamLab allows shoppers to virtually test beauty products online or via mobile device using Augmented Reality (AR). Using this technology, a customer could select a foundation specific to their skin tone/undertone, with recommendations based on color and brand preferences.
The Ulta Beauty at Target model is a scaled-down access to Ulta within Target stores. “[The] Target partnership is a unique experience, only 1000 sq ft, but not designed to have the full Ulta experience. They are intended to be additive,” said Mr. Kimbell.
Aiming at 100 doors by the end of this year, Ulta has over 50 brands that have participated in this unique Ulta at Target experience. Brands that engage in this partnership are able to gain new customers. For Ulta, this is another avenue to connect with new customers, relate with them in a new way, and deepen loyalty with current members. Ulta is not only creating partnerships with big brands but has set its sights on making more meaningful connections to Black-owned beauty brands through Muse.
Muse is part of a $25M campaign to amplify diverse voices, Black voices, in particular, have been really influential but haven’t been as representative, so leaning in. The next wave (Muse 100) team and external advisors launched 100 Black influencers shaping the narrative in the category from content creators, founders, business owners, etc. The program includes a grant for those founders to increase their work. Ulta is on a journey to double the number of Black-owned brands in its stores. Now is the time to consider how these partnerships can create opportunities for you to align your brand with Ulta Beauty.
Apply this strategy to your business:
- Assess your network: What strategic partnerships have you made thus far? Do you have relationships with anyone or businesses that might help you build a relationship with Ulta Beauty or any other retailer you’ve set your sights on?
- Organically build rapport with those in your network that you see as potential partners. Take an honest interest in their work and offer assistance where possible without expectation. It is sometimes as simple as sending an email to ask about their upcoming projects. This is a way of building trust and good faith, Which lays the foundation for future collaborations and/or partnerships over time.
Ulta Beauty has built a world-class business/brand by finding its fit in the beauty landscape, standing out, and being unafraid to lean into its principles and brand strategy as well as creating key strategic partnerships. How will you apply Ulta’s stellar strategies to get on the shelves there or elsewhere?