How Ulta Is Currently Profiting from a Crucial Attribute of Beauty Buyers


Consumers began to spend more sparingly and gravitate toward less expensive brands in the cosmetics sector when Michelle Crossan-Matos became chief marketing officer of Ulta Beauty in January.

During a May conference call regarding company earnings, Ulta Chief Executive Dave Kimbell stated that “consumers are investigating how to best navigate the economic uncertainty.” “Inflation worries are still very real.”

However, the cosmetics shop located in Bolingbrook, Illinois, increased its fiscal year outlook and above analyst estimates for its second-quarter earnings in August. Ulta’s rewards program saw a 9% rise in active members during the quarter compared to the previous year.

According to Crossan-Matos, the business uses information from its loyalty program to determine which products to highlight and guide its marketing. Brands who run advertisements on Ulta’s retail media network, which facilitates the connection of external marketers and Ulta customers, are another group of clients that the company is benefiting from this type of data.

However, according to Crossan-Matos in an interview with The Wall Street Journal, Ulta is also profiting from its price strategy and a few important aspects of beauty customers.

The entire interview is available as a podcast here. Here are edited excerpts.

For many people, it has been an inflationary year with tighter budgets. Ulta is in an intriguing situation since, in addition to higher-end, more expensive brands and goods, it also carries lower-cost items. In an era like this, how do you plan to reach these customers?

Transverse-Matos: In contrast to other industries, the beauty-care sector has a strong motivation to spend money against innovation and to continue spending. Additionally, innovation has varying pricing points and ways of entry within the industry.

Since beauty care is a space for experimentation and self-expression, consumers frequently shop around to find the innovation they want at the price they want. Thus, consumers may find great pleasure in purchasing the same innovation under several labels or a new innovation to see which one truly suits them.

There is a ton of stuff on sites like TikTok that says, “You love this, why don’t you try something like this?” It’s interesting to see how some businesses are embracing that and allowing customers speak for their brands.

Crossan-Matos: It features a variety of age groups of beauty enthusiasts describing how to “get ready with me” and recommending the best products for their daily skincare regimen. Something seems to attract a lot of interest and engagement. People are interested in sharing knowledge.

The beauty community is the largest community there is. Here’s where our good fortune lies. 42 million people are members of Ultamate Rewards. Every day, they teach us something. And one of the main places they look for ideas about what’s trending in the industry is social media.