Dive Brief:
- Ulta Beauty is realigning itself around the customer with changes to its leadership team, store operations and digital offerings, after it lost market share in the beauty category for the first time last year, executives said on a Q4 2024 earnings call last week.
- The beauty retailer’s business is bigger than ever, but greater complexity means “our in-store presentation and guest experience today are not as strong as we would like,” President and CEO Kecia Steelman said on the call. Steelman took on the CEO role in January following the sudden retirement of Dave Kimbell.
- The beauty retailer aims to get “back to the basics of running excellent stores that are easy to navigate, fully stocked, appropriately staffed, clean and inviting,” Steelman said.
Dive Insight:
Ulta leaders are streamlining operations to win back market share.
“The beauty landscape has fundamentally changed,” Steelman said during the call. “Guest expectations continue to rise and the pace of change is accelerating. The competitive environment in beauty has never been more intense.”
Ulta is navigating a rough patch, but its latest quarter beat expectations. Comparable sales rose 1.5% year over year in the fourth quarter of 2024, though net sales fell 1.9% year over year to $3.5 billion, according to a company earnings release. The decline was partially attributed to an extra week of sales in fiscal 2023.
Part of Ulta’s strategy will be making changes to the store. Amiee Bayer-Thomas, who holds the newly created chief retail officer role, will spearhead this effort. All store functions, including store design and associate leadership, will be centralized under Bayer-Thomas to support strong in-store experiences.
Associates are a key element in Ulta’s in-store strategy, too, Steelman said. Store employees are the people interacting with customers every day, making them the best representatives for what the brand wants to offer.
Ulta isn’t the only retailer highlighting the importance of associates in CX. Companies as diverse as Dick’s Sporting Goods, Dollar General and Warby Parker discussed how investments in the workforce will play into their experience plans during recent earnings calls.
Ulta will continue to deepen its relationship with customers online through personalization, automation and real-time content in 2025 and 2026, according to Steelman. Its plans include launching enhanced features on the Ulta app and website to elevate the digital customer experience.
Ulta’s loyalty program remains a bright spot for the retailer, growing 3% year over year to a record high of 44.6 million members in 2024, according to Steelman. The retailer refreshed the program last year and supported its growth with improvements to its digital store and data ecosystem.
Kelly Mahoney, who was named chief marketing officer in February, will oversee the execution of the upcoming loyalty and personalization plans, according to Steelman.
CX is also top of mind for Ulta’s third-party marketplace, which is planned to launch in the second half of the year. Customers will earn loyalty points for purchases made on the marketplace, and items purchased through the platform can be returned at Ulta stores.
“We’re trying to make this as seamless as possible for our guests,” Steelman said.
