Beauty Store Business

JAN 2019

Beauty Store Business provides solutions for better retailing! New products, industry news, savvy business moves and important trends affecting both brick-and-mortar and online retailers are included in each issue.

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32 January 2019 | and Matrix, and most recently helped Ulta Beauty revamp its salon by forming the Ulta Beauty Pro Hair Team when he joined as chief artistic director in 2016. The team consists of six hairstylists, each supported by a different brand such as Matrix, L'anza or Redken. Stenson also oversees 57 employees on his corporate team and 230 on his salon services field team. "It's all about coming together to support each other–and to support our over 8,000 stylists," he says. Stenson's goal for Ulta Beauty is to eliminate anxiety for customers who feel overwhelmed by thousands of products they don't know how to use. He says, "We have experts from hairstylists, beauty skin experts and brow specialists to makeup artists who can really help people on their retail journey, bring it to life by using products on them or by giving them a completely different look in The Salon." Of course, to offer these services and keep customers coming back, Ulta must be attractive to top talent. So, Stenson revamped Ulta's educational program for stylists. Different educational programs serve different skill sets, whether hair- dressers need to learn more of the basics or have decades of experience under their belt. Stenson also instituted a new program called services optimization. A new stylist can start as an entry-level designer stylist, pass an educational program and then advance to master stylist. To become an elite stylist requires yet another level of education. "No matter where you are in your journey in the beauty business, we can help support your career," Stenson says. Brand partners also help educate stylists through programs such as Empower You, which provides select master stylists with immersive brand and product training over several days. The salon services help to move product, too. Of all the in-store services, The Salon gets the most traffic, with hair color being the most-used service overall. "We have our pro hair products placed right next to our salon," Ovington says. "We've done that so that it makes it easy for our experts to walk someone over and provide customized recommendations." Guests who use Ulta's various hair, skin and makeup services end up spending more than casual shoppers–a lot more. "Our guest that gets any type of service done spends, on average, three times more and shops twice as much as a guest who just comes in for retail. They are definitely, needless to say, our most valued guests," Stenson affirms. The Skin Bar, added to stores in 2018, features everything from 10-minute express facials to 20- and 30-minute options like microdermabrasion or skin resurfacing. With two chairs placed on the floor, the spa helps attract curious onlookers. In select locations, there are Dermalogica pods and back rooms where full-time, licensed estheticians perform services up to 90 minutes in length. Ulta's sales associates and estheticians are crucial for drawing in new customers. When they're not performing a service, estheticians walk the floor, answer questions, recommend products and provide free skincare consultations. Stenson says the sale of pro products and haircare services go hand in hand. Surprisingly, 54 percent of people who come in for a hair service end up purchasing a pro hair product that same day. "The statistics in the industry are sitting at around 7 percent for an average salon, so our penetration into retail is huge," he adds. "It's because we have these beauty enthusiasts that live for product, they love being beautiful, they love discovering ways they can play with beauty–and they make beauty a hobby as well as an accessory for them." NEW OPPORTUNITIES FOR GROWTH Despite Ulta Beauty's unprecedented success, several categories offer oppor- tunities for growth. With the demand for natural products rising, Coy is continuing efforts to appeal to clean-beauty consumers– whether they're seeking 100 percent organic items, vegan beauty, gluten-free skin care, cruelty-free products or all of the above. Ulta also aims to be more transparent by spotlighting brands that don't use certain harmful components such as sulfates. "We're working with our brand partners to be very transparent about what their brand provides in that space and giving our guest full disclosure," Coy says. Ovington believes that the textured- hair category will grow in 2019. She has witnessed several of Ulta's core textured- hair brands demonstrate double-digit growth, as well as many new launches for curly haired consumers. "Color care has always been strong for us too, but we see 30 MILLION Ultamate Rewards loyalty members 1,163 retail stores in 50 states 54% of salon clients purchase a pro hair product the same day 25 , 000+ products from 500+ brands and a private- label collection 50% 40 , 000 female board of directors associates, 92% women Recycled 12,000 tons of cardboard and plastic shrink-wrap in 2017 ULTA BEAUTY AT A GLANCE IN-STORE POWER PROGRESSIVE $ 5.9 BILLION 2017 fiscal year sales (up 21.2%) Raised over $ 22 MILLION for breast cancer research since 2009 Customers who use salon services spend almost 3 x more and shop 2 x more than nonsalon guests Average omnichannel shopper spends $ 474 a year– 4 x more than those who only shop online ( $118 a year ) and 2.8x more than in-store only guests ( $171 a year ) $ 569 MILLION in e-commerce sales in 2017 15,000 new jobs created since 2015

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