The beauty enthusiast is at the heart of everything Ulta Beauty does. As a one-stop beauty destination with full-service salons in every store, the retailer provides guests with everything across the spectrum of categories and services.
Its best-in-class loyalty program with high engagement – more than 90 percent of transactions come through it – and its large omni-channel footprint means guests can purchase products where, when, and how they want.
And shoppers are purchasing products in record numbers. Net sales for Ulta Beauty increased 21 percent to $ 2.3 billion in its fiscal first quarter of 2022, up from $ 1.9 billion in the first quarter of 2021. Comparable sales were up 18 percent driven by a 10 percent increase in transactions and a 7.3 percent increase in average ticket.
RangeMe’s SVP of Retail, Wayne Bennett, caught up with Josie Ostrowski, Senior Manager, New Brand Partnerships at Ulta Beauty to discuss beauty trends and to unpack what the retailer looks for in the new brands it brings into its assortment.
RangeMe: What key product trends are you seeing in today’s marketplace?
Ostrowski: We’re really excited about the reintroduction of discovery and self-expression across the makeup and color spaces. Makeup is coming back in an exciting way post-pandemic with a lot of artistry such as bright colors, gemstones, and new ways of applying base, in addition to making sure you’ve got skincare benefits in makeup formulas, too.
Other trends that are particularly exciting are the evolution in clean beauty and sustainability and what that means for our guests. We’ve been really focused on celebrating and educating clean and conscious beauty. Whether that’s looking for vegan or cruelty-free ingredients, recyclable and sustainable packaging, or refillable compacts, it’s exciting to see brands and products address what is important to shoppers.
The last one I’ll call out is the intersection of wellness, self-care and beauty which has been incredibly impactful. There is so much happening in this area as guests create and embrace new routines, lean further into wellness and establish meaningful connections with brands.
RangeMe: How is Ulta Beauty bridging the gap between beauty and wellness?
Ostrowski: We are so proud The Wellness Shop, an initiative we launched last year as wellness has been introduced across every category in our assortment. Spanning skin, hair, bath, and makeup, wellness was accelerated during the pandemic as consumers worked to take better care of themselves and prioritized self-care. With that, we knew we could reach guests in even more meaningful ways by creating a wellness curation.
The Wellness Shop has an assortment of five, easy-to-understand pillars to help educate and inspire purchases while removing some of the complexity from the wellness journey. These include Everyday Care, Supplements and Ingestibles, Relax and Renew, Spa at Home and Down There Care. Currently, the experiences are in select Ulta Beauty stores, and we just launched an enhanced digital platform that educates and celebrates wellness.
RangeMe: What are some of the considerations you make when evaluating new brands?
Ostrowski: The first thing we do is understand a brand’s mission, point of differentiation, and reason to believe. We house over 600 brands, so when we evaluate new brand opportunities, we must understand and embrace what makes it special, whether it’s incredible innovation, a unique founder and mission to amplify, or an incredible community. Every year, we have a few strategic initiatives the entire merchandising organization marches towards, so we also cross-check to understand if a brand aligns to one of those.
Finally, one of the most important considerations and a piece I focus on quite a bit, is understanding operational readiness. We want to make sure any new partner that launches with us is ready operationally and supply chain-wise.
RangeMe: What recommendations do you have for brands from an operational and supply chain perspective?
Ostrowski: From a launch and partnerships perspective, I encourage brands to embrace the crawl, walk, run approach. We like to approach every brand effort thoughtfully to scale and grow the business as it makes sense.
When it comes to supply chain readiness, foundation is key. We require UPCs on all goods and we ask for EDI compliance, and as many emerging brands may not have warehousing capabilities, we encourage partnering with a third-party logistics provider. Given everything going on with supply chain issues in today’s world, an important consideration is making sure the inventory is there.
A key differentiator Ulta Beauty brings to all new brands is the ability to engage with our 37 million Ultimate Rewards program members. When we can take a dual-channel approach to marketing and messaging, we see great success. One such example is participating within the various cooperative Ulta Beauty programs offered, such as our tent pole events like 21 Days of Beauty. We see a lot of strong synergies and the brands really come alive. Additionally, we encourage our brand partners to participate in our sampling program which we know is a large investment but it is one of the best tactics for new guest acquisition.
RangeMe: As a supplier, if I’m meeting with you for the first time, what are some key elements that I should touch on?
Ostrowski: These discussions are full of information and if I were a brand preparing to enter retail I’d want to have all my information set so I can showcase what I envision a partnership with Ulta Beauty to look like. First, we want to understand the brand’s story and its point of difference. From there, be prepared to share more about your assortment, the categories and consumer needs you address, the features and benefits your products deliver, and of course, your retail prices. Help us understand how you believe your brand fits within our assortment and offers guests something we currently don’t. Anything brands can share around innovation and having a peek into where the brand’s pipeline is moving can be really helpful for us to understand long-term views.
We want to know about your marketing; how you are reaching guests and amplifying your message? What are your distribution strategies; it’s critical for us to understand where the brand can be accessed, whether that’s a DTC website or ramping up with current or new partners. What differentiated channel experience can the brand provide to Ulta Beauty that will make the shopper shop with us versus others. Our intent is to amplify and flush up your business as partners and all of this detail helps.
Brands should be ready to answer questions about their customers and DTC performance metrics. Questions such as what the brand is shipping and repeat rates are fair game. Is there an existing loyalty or subscription program? While all of this may seem daunting, a brand that’s ready will have these details at the ready for such discussions!
RangeMe: Do you have regular category reviews, or do you review throughout the year?
Ostrowski: I would say we sit in a very happy middle ground. The process I manage for new brand review is a rolling, year-round process. Brands can submit for consideration at any time, and I review all new opportunities with our merchant partners every six or seven weeks. From that pool of reviews, there are brands the buyers are interested in learning more about, and for those we move into sample reviews. After that, we proceed to a more formal brand presentation, like a line review meeting to discuss what I mentioned earlier.
Brand submissions can take anywhere from 12 to 16 weeks and they begin on Ulta Beauty’s RangeMe sign-up page. RangeMe is an incredible platform that allows us to efficiently review brands and communicate with brands on various opportunities.
Our merchant team is extremely engaged in this process, and I act as an extension of every category buying team across the organization. I’m very much in lockstep with what buyers are looking for, what our focus is, and what our strategies are to be able to source brands for them in a meaningful way.
RangeMe: Tell us about some initiatives you have coming up.
Ostrowski: We have a few strategic initiatives that the merchandising team marches towards every year. Conscious Beauty has been an incredible success and we continue to layer in new partners and amplify our current partners across the program’s five pillars of clean ingredients, vegan, cruelty-free, sustainable packaging, and positive impact.
Our wellness program will continue to stay curated as wellness is a journey where we can meet guests where they are.
Additionally, we are commitment to diversity, equity, and inclusion and while we’re thrilled with the work we’ve done to date, we know there’s much more to be done in expanding our portfolio of diverse-owned, led, and founded brands. Not only are we looking to expand our portfolio, but we’re also thinking about how we nurture and grow the diverse-owned and -founded partners that are currently in the Ulta Beauty assortment.
Ulta Beauty is always on the lookout for innovative brands that surprise and delight its shoppers. Are you a supplier on RangeMe and want to submit to retailers like Ulta Beauty? Upgrade your membership to Premium to unlock access to features like retailer submissions, buyer insights, and so much more.
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