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Merchandising Plan, Ulta Beauty Is Adding Services

Ulta Beauty

Ulta beauty has revamped the layout of around 44 locations as of the beginning of the third quarter to better display its mass and prestige categories, simplify navigation, elevate the services experience, and offer more possibilities for discovery.

REVAMP

Ulta beauty current revamp places a greater emphasis on its service offerings compared to its previous major merchandising overhaul in 2018. In addition, there are new beauty bars in the store’s main aisle where customers can have their brows and cosmetics done in a joint venture between Benefit and MAC Cosmetics.

PANDEMIC SITUATION

This was made possible by “lapping capacity limitations owing to the pandemic.” Salon appointments from both new and returning clients have increased because to our strategic CRM initiatives aimed at boosting brand recognition, product trial, and service frequency. Ulta coupon $10 off $40 participating brands saw increased product attachment and new customer acquisition as a result of our in-store back-bar events.

NEW DESIGN

Any new stores or redesigns in the future will adhere to the new retail layout. Since its inception, Ulta Beauty’s back-bar programmed has provided customers with salon hair treatments from trusted names like Briogeo. Ulta Beauty CEO Dave Kimball emphasized the significance of salon services during the company’s third quarter 2022 earnings call in December.

To quote him: “Our services business advanced and produced another quarter of double-digit comparable growth as a result of greater stylist retention, improved stylist productivity, and increased capacity in our salons.”

RETAIL SECTOR

Nearly two years after the retail sector was hit hard by Covid-19 in 2020, Ulta Beauty has adopted a new merchandising approach. Since the return of traditional storefronts, retailers have seen short-term consequences, such as an overemphasis on online shopping, give way to longer-term industry trends, such as multichannel, wellness, and a consumer focus on values.

MERCHANDISING OFFICER

Ulta Beauty’s chief merchandising officer, Monica Arnaudo, says the new approach was inspired by the reality that the customer journey is no longer linear. Ulta Beauty took into account customers’ preference for BOPIS and curbside pickup while designing their service.

TRANSITION BRANDS

Arnaudo calls Estée Lauder, Clinique, and Lancôme “the ideal transition brands between premium and masstige,” and they can now be found in the store’s new focal point, displayed on elevated gondolas. Products from the skin care and cosmetics sections of the store are also included.

BEAUTY SERVICES

“Beauty services might entail an extra visit, which may result in product sales beyond the beauty treatment itself,” said Manola Soler, senior director at Alvarez & Marsal’s Consumer Retail Group. Although services are a key component of [Ulta’s] strategy moving forward, they continue to contribute only about 3-4% of the company’s total revenue.

They may gain a larger portion of customers’ beauty budgets Ulta beauty by providing excellent service, and that may have a positive ripple impact on how much customers spend at the store overall.

ULTA STORES

Because of the rapid growth of the skin care department, it has been relocated to the store’s entrance. Every skin care brand imaginable, from the most popular to the most luxurious, is here. Prestige skin care was at the rear of the shop on one side, and mass skin care was in front. Makeup has also moved from mainstream to masstige to prestige.

SALON SERVICE

Due to the increased demand for space caused by new product launches, fragrances have been relegated to the back of stores. Checkout is closer to the salon. According to Glossy, Ulta Beauty offers mainstream and premium items.

BEAUTY SECTOR, BRAND LOYALTY STRONG

The firm profited from customers’ continuing spending and emphasis on health in the cosmetics market. New brands and product advancements keep Ulta Beauty popular.

LOYALTY MEMBERS

Ulta Beauty’s loyalty members are extremely engaged. Kimbell says loyalty members shop more and spend more. Q3 has 9% more loyalty members than previous year. The company’s large choice of items at different price points enables it to service numerous demographics and income levels.

ECOSYSTEM OMNICHANNEL

Kimbell reviewed Ulta beauty new store layout to enhance the shopping experience. Stores brought skincare to the front, categorized items, and added new fixtures to make shopping simpler. The storefronts feature new items and brand debuts. Ulta Beauty launched 18 shops.

Kimbell remarked, “While store visitation is vital, customers typically start with us online.” Kimbell says store visits surpassed pre-pandemic levels, and buy-online-pick-up-in-store sales were up 18%, or 23% of total ecommerce sales.

INCREASED PROFITS

Gross margin was 41% compared to 40% previous year. According to Scott Settersten, CFO, treasurer, and assistant secretary, Ulta Beauty benefited from vendor partner price hikes for items acquired at a cheaper cost, which improved cost of goods performance. According to Settersten, ticket sales were up 3.5% overall but down per transaction. Price hikes in the quarter boosted the average ticket price.

ULTA BEAUTY MAY SURPASS $10 BILLION BY YEAR’S END.

The sales trends through Thanksgiving and Cyber Monday, according to Settersten, have been encouraging. Based on current business and increased Christmas and fourth-quarter estimates, the firm boosted its 2022 sales forecast to $9.9 to $10 billion. Q3 ended with 1,343 shops totaling 14.1 million square feet.

BIGGEST BEAUTY SALE

Ulta Beauty is the biggest Ulta beauty store in the U.S. Ulta Beauty is the premier national store for All Things Beauty. The company sells approximately 20,000 goods from 500 well-established and rising beauty brands, including its own private label. Every Ulta Beauty shop has a full-service salon for hair, skin, and brows. Ulta Beauty stands out among beauty supply stores due to its exceptional loyalty programme, unique in-store experiences, and exciting environments.

Written by Emma will

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