Retail news that keeps industry pros in the know
Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.
After reporting a dulled Q2 performance in August, Ulta Beauty this week held its first Investor Day since 2021, highlighting its future growth strategy, which included the announcement of a new data partnership and updated store expansion plans.
Its marketing strategy is centered around growing its Ulta Beauty Rewards loyalty program, currently made up of 44 million members, to 50 million by 2028. A “critical pillar” of this is personalization, including product recommendations and replenishment reminders, with help from a new partnership with Adobe, CMO Michelle Crossan-Matos shared. This partnership will establish “a fully automated, real-time personalization engine,” utilizing data, AI, and machine learning, without the need for manual intervention, she said. The engine, for example, could use loyalty data to determine a shopper is nearly out of their concealer while also identifying they were recently searching for Halloween trends, serving them recommendations or reminders for both via social media, Ulta Beauty’s app, and email.
Within its product assortment, chief merchandising officer Monica Arnaudo noted that the company is “committed to reigniting growth” for the recently challenged makeup category. Ulta Beauty will focus on bringing on with new products and brands, which account for 20%–30% of its annual revenue, Arnaudo noted, underscoring the importance of exclusive brand partnerships. Nearly half of its 2025 brand pipeline will be exclusive to the retailer, she said. It’s also aiming to “win” within the “growing, fragmented” wellness category, housing products like supplements and personal care, with larger in-store and online presence and broader brand assortment.
Ulta Beauty’s stores remain “the heart of our model,” President and COO Kecia Steelman said, and the beauty retailer does “not believe the market is oversaturated.” It’s currently testing smaller markets, like Wilson, North Carolina, where it can open smaller-format stores with a more curated assortment, she said. The company had previously announced it’s expanding to Mexico in 2025, which it’ll scale to 100 stores in the next few years, she said. It plans to operate a total of 1,800 stores, up from its current ~1,400 total, in the long term, with ~200 net new stores by 2027, CFO Paula Oyibo shared.
While CEO Dave Kimbell noted the retailer expected 2024 and 2025 to be “transitional years” as it navigates the shifting dynamics in beauty, he believes it has “clear strategies to drive growth.”
“I stand here today very optimistic about the future of Ulta Beauty,” he said.