Ulta Beauty (NASDAQ: ULTA), the one-stop destination for beauty products and services, is leveraging technology to better personalize and customize their connection with shoppers in stores.
It's about delivering a distinctive experience, but one intended to drive sales to stores.
Ulta operates 774 stores in 47 states, stocking roughly 20,000 different items. It's a one-stop shop for consumers looking for beauty products in a range of prices and each location houses a full-service salon. It's the salon that sets Ulta apart from its competitors, and the area that offers the most room for growth.
Less than 7 percent of Ulta's 15 million loyalty program members actively use the retailer's salon services, according to Dave Kimbell, Ulta's chief marketing officer. Being able to successfully migrate product-buyers to use salon services is a priority.
Ulta communicates with shoppers across many channels: mobile, guest services, direct mail, online, email, point of sale and social. So consistent messaging across all platforms is key. "Our core guest is very engaged so she's always looking for new ways to learn more. Integrating all of these touch-points into a unified experience and ensuring she's having a consistent experience from a branding and communications standpoint helps elevate our approach," Kimbell told attendees at the Oracle Industry Connect conference in Washington, D.C. last week.
In addition to enabling associates to deliver a personal and fun experience, there is a need to provide shoppers with information, both in stores and online. "There's a lot to learn about all of the products that are available, and this is one of our main channels for informing our guests," said CIO Diane Randolph.
To that end, Ulta is investing in labor and technology to enable an informative experience. The retailer has implemented several in-store technologies to free up associates' time so that they can have "more quality guest-facing time and really develop a one-on-one relationship" as opposed to doing tasks that can be automated, according to Randolph.
The goal is to make sure targeted communications and promotions are as personalized as possible. With a 15 million member database complete with customers' unique preferences, she acknowledges that "we can really target the conversation" when it comes to promotions.
And of course, Ulta seeks to create a seamless shopping experience across all channels, fueled by upgrades to its e-commerce platform.
"We had an ecommerce business that was chugging along, but we hadn't invested in ways to leverage that as a space for us to connect with our customers," according to Kimbell. "We invested in changing the platform and it has reignited the business."
Ulta's goal over the next five years is to grow e-commerce from less than 5 percent of total revenue to 10 percent of the overall business. "We're not looking for this to be 50 percent of our business, but we recognize it's an important complement," said Kimbell. "We look at lots of different ways to acquire new guests and e-commerce has proven to be an important way for us to do that."
"We want to get a new guest acquired online to ultimately come into the store for services, to find new products to test in person, and take advantage of our salon services," he said.
Ulta revamped their e-commerce business in a few key ways. They focused on driving customer traffic and increasing conversions by incorporating a full rollout of the loyalty program online.
They also improved the online shopping experience for guests by implementing product recommendations and are seeing this tool heavily adopted by guests. This technology is also easily configured and measured so that they can see which recommendations are driving the most results.
Ulta also introduced a mini cart overlay feature so that when a customer purchases an item, instead of taking her away from the product page, she can see other products, which encourages cross-sales.
Kimbell spoke to an increasingly large focus on creating content for guests to engage with that will "inspire, educate and share." After recognizing that their customers are actively searching for this type of content, the retailer focused on ways in which they could provide more content as a way to facilitate a better experience.
"Beauty haul videos are a great source for us to provide information to our customers," said Kimbell. These are customer-created videos that show shoppers using products from Ulta. The retailer is embedding these videos with a commerce capability so that shoppers can click on products to buy while watching video content.
Additional website content includes live interactive chats featuring beauty experts as well as the founders of shoppers' favorite brands.
"This hasn't been terribly difficult for us to do and it's been a great way to connect with our guests," said Kimbell. Chats are supported with rich content linking back to the site for detailed product information and remain on the site for rich SEO and authority building content.
Ulta recently launched a new interactive iPad app and added the ability for shoppers to upload photos directly to the website.
According to Randolph, all of this content adds credibility, authority and authenticity to the brand in the marketplace. "Bringing in authentic user generated content is bringing in commerce and driving sales. And it's a great opportunity to connect with our guests," she said.
Ulta is still developing a full omnichannel roadmap, but has taken some significant steps toward increased omnichannel capabilities and building a connected guest experience.
Central to these efforts is the ability to offer visibility of nearby store inventory online and access to online product descriptions in-store. "Even if she is a digital native, our customer may want to be able to physically touch and see a product in-store before purchasing," said Kimbell.
Ulta is also focused on building loyalty by ensuring that their rewards program is accessible across all channels and through all available touchpoints.
There's an effort to increase store traffic to salons by incorporating the ability to book appointments online, further integrating the online and offline experience.
A final component of Ulta's omnichannel strategy involves driving richer and more relevant guest experiences with in-store associates through the launch of a clientelling application. In-store technology drives personalization in this area. Associates access the application in-store on an iPad and use the information to inform consultations. An associate can instantly access a guest's information, review her purchase history, understand what her beauty concerns are, and target the right product to address those concerns. Information is shared across all channels.
As an added benefit, the clientelling tool also captures brand preferences enabling Ulta to personalize offers and issue targeted invites to guests to in-store events.
Ulta remains focused on positioning themselves as an authority in the industry, said Kimbell: "We do that by making sure we are providing value at every touchpoint, whether it's at home via a video or chat, on mobile, or in-store."
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