Ulta Beauty Doubles Down on Social Media and Digital Strategy
Ulta Beauty is transforming its brand image into a social powerhouse, capitalizing on a surge of digital engagement to elevate its market presence.
During the company’s second-quarter earnings call (Aug. 29), CEO Dave Kimbell revealed that despite a modest net sales increase (0.9%) to $2.6 billion while comparable sales (sales for stores open at least 14 months and eCommerce sales) fell 1.2%, Ulta’s strategic shift toward social media and digital innovation is reshaping its competitive edge.
Competition has heated up in the beauty category, Kimbell noted, adding, “the strength of the beauty category, combined with an attractive margin profile, has drawn substantial and diverse competition to the category. More than 80% of our stores have been impacted by one or more competitive openings in recent years, with more than half impacted by multiple competitive openings.”
Included among Ulta Beauty’s five areas of focus to reinforce its competitive position: expanding its social relevance and enhancing its digital experience.
“We’ve disrupted the beauty category for more than 30 years and we understand how to successfully manage competitive forces,” Kimbell explained. “To accelerate our social relevance and enhance our brand awareness, we have scaled our creator and influencer networks, and we are expanding our culture-forward activations to ensure we are at the heart of the social and cultural conversation for beauty.”
As a result, the company delivered “meaningful growth and earned media value and social sentiment —and drove more than 250 million social impressions,” he said. “During the quarter, we doubled the size of our influencer network to include a diverse range of influencers across key audience segments to reflect our inclusive audience targeting strategy.”
Kimbell noted the launch of Ulta Beauties, the company’s new associate ambassador program, explaining it will “harness the superpowers of our team and highlight the expertise and passion of our talented associates. As a group, these talented creators developed compelling content in support of our big summer Beauty sale, back-to-school, and the Joy project, which increased our EMV (earned media value) by more than 10% this quarter.”
In tandem with these social initiatives, Ulta is leveraging new digital features and its expansive loyalty program to enhance customer engagement. With more than 44 million active members, the loyalty program provides critical insights that drive targeted marketing and personalized rewards, creating deeper connections and higher spending per member.
“In July we launched our first member-tiered offer to drive traffic, new member acquisition and member reactivations,” Kimbell explained. “In addition to targeted events and communications, we have integrated our rewards program into our digital experience and tent pole events to drive engagement and reinforce the value of the program. Looking ahead, we are focused on attracting customer segments to drive new member growth, driving differentiated engagement early in the lifecycle to enhance retention, and leveraging our extensive member data to accelerate traffic.”
Ulta’s app adoption increased 16% through associate engagement, targeted communications and app-only offers, Kimbell explained.
“Our app accounts for about two-thirds of our eCommerce sales,” he said. “While the app is a vital tool to drive eCommerce sales, the majority of our spend from app users actually occurs in store, making the app another key engagement tool to drive sales per member.”
Kimbell is optimistic about Ulta’s trajectory, adding, “we’re pleased with the progress, all-time high of brand love and brand awareness, and we’ll continue to drive that because we know that drives connection and awareness and reinforces the role that we play in our guests’ lives.”
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