Our Best Customers are Omnichannel Customers: Inside Ulta Beautys Channel- Agnostic Growth Strategy

Facilitating an easier shopping experience for customers across channels has been buzzy as of late, from Sephora’s focus in the last year on “omnitude” and unifying its teams to direct-to-consumer company Birchbox going after more physical touch points via a new partnership with Walgreens.

For Ulta Beauty, which is still on track to open 100 stores this year and also experienced a 43 percent increase in e-commerce sales to nearly $458 million in the first nine months of 2018, its omnichannel strategy has been in the works since 2015, said Prama Bhatt, svp of digital and e-commerce.

A new order management system offering inventory visibility debuted on the back end, and its results facilitated the retailer’s store-to-door program, which launched in late 2017. It allows customers to order online in physical locations and have products shipped to their homes. “When we think about how we interact and communicate with her, and when and why, it has to be about the whole guest journey,” Bhatt said.

Though Ulta’s store-to-door program has been in place for just over a year, Bhatt recognizes there’s more work to do to get it off the ground. “A lot of customers still don’t know about store-to-door unless they talk to someone in stores, so in order for it to be more frictionless for the shopper, there needs to be more awareness,” she said. As of now, store-to-door has been messaged via limited in-store signage and select email blasts.

Ulta’s increasingly channel-agnostic slant is how customers are shopping today, particularly high-spend customers — commerce marketing firm Criteo found that omnichannel shoppers account for a four-times-larger (27 percent) share of sales. This is especially true at the beauty retailer. According to Bhatt, Ulta’s omnichannel shoppers spend up to four times more than its single-channel guest, and they frequent stores two-to-four times more. “You would think their extra spend was digital spend, but, ironically, that extra spend is happening in stores,” she said. “Our best customers are omnichannel customers, so we want more of those kind of shoppers and to make our experience better for her,” she said.

Fueling this in 2019 will be Ulta’s recent acquisitions of artificial intelligence and augmented reality startups, QM Scientific and GlamST, and its investments in digital workflow partner Iterate and online booking tool Spruce. The technologies offer Ulta a leg up on personalization across channels. “Our data set and having all things beauty, all in one place, gives us a competitive advantage. We have more insight across a broad customer base, and we want to personalize across all channels for each individual,” said Bhatt.

According to Ulta, all of those recent partners have work in flight for the retailer. One example includes a better guest service and conversational commerce (via bots) experience, to debut in 2019. There’s also the connection of QM Scientific’s AI platform, Quasi, to Ulta’s customer data. This will allow the retailer to offer more personalized recommendations and messaging to customers through emails and on Ulta.com.

Other possibilities include completely unique site experiences, said Bhatt, though she did not offer a customer-facing launch date. “We could use some of the learnings we have had from advisers within our stores. We want to use all of our digital data to be a better beauty adviser across all channels,” she said.

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