Ulta Beauty is on a roll — offline and on. It’s growing in the physical space, with 100 new stores on tap for 2017, and is also expanding its capabilities in the digital space.
Ulta’s e-commerce sales hit $345.3 million in 2016, and online traffic continues to climb. For its most recently completed quarter, e-commerce sales grew 63.4%, and mobile volume rose more than 90%.
“Customers are shopping online at a fast and furious pace,” said Jeffrey Hamm, senior director of e-commerce at Ulta Beauty, at Oracle Industry Connect 2017. “As our site continues to see volume spikes, especially during the last holiday season, we are eager to find ways to protect the online guest experience.”
Creating a “guest-centric” experience is embedded within the retailer’s DNA. In fact, Ulta’s steps to improve online engagement date back to 2013. But the timing wasn’t right.
“The state of technology outpaced our online environment,” explained Michelle Pacynski, Ulta’s VP, guest facing systems, at the conference.
While its online platform leveraged different aspects of a private cloud, higher-than-expected year-over-year traffic increases, dedicated servers and a processor-based model was taking a toll on performance and customer engagement.
“In the coming years, we knew there would be even larger volumes of traffic, and we needed to ensure that our e-commerce site could perform,” she said.
Ready to give its e-commerce operation a face-lift, Ulta began focusing on scalability and more functionality. A few must-haves included the elimination of manual processes and batch updates; the capacity to rearrange the page, especially when merchandise is running low or out-of-stock; and the ability to deliver a consistent look and feel across the online experience. And of course, the site had to be fast, and cost-effective.
Ulta’s first step was to update its hardware, a move that included refreshing its processing environment with new servers, and upgrading its core infrastructure with a cloud-based application software stack. This included adopting ATG Web Commerce from Oracle, cloud-based software that allows Ulta to deliver personalized content to shoppers.
Next, Ulta created a dual site environment — two customer-facing sites that share a single domain name (ulta.com) and database. The two sites worked in tandem to handle peaks in traffic.
The configuration was paramount in controlling traffic volume — and maintaining online operations — as more capabilities were upgraded.
“Volume was split 50%–50% to ensure we could deliver maximum capacity throughout the upgrade, as well as for the holidays,” Pacynski said. “This way, if there was a problem on one site, traffic would automatically switch to the second [interface] and we could continue business as usual, without interruption.”
Initial tests, including load and stress trials, were conducted between July and August. By September, the chain identified customer-facing areas that needed to be fine-tuned, as well as tweaks related to fulfillment and replenishment. All testing was complete by October.
The upgrade has given Ulta better and faster hardware and software that helps it to reliably serve shoppers, Pacynski said. And with a stronger emphasis on the cloud, the upgrade also helped the retailer successfully increase capacity, and lower its operational and hosting costs.
“Being unconstrained by processors, we are in a position to expand over a number of years, if and when we need to,” Pacynski explained. “It also makes [IT] budgeting more predictable.”
From a transactional standpoint, Ulta’s new e-commerce platform kept holiday sales on point. For example, the platform processed 14% of all Black Friday orders within the first two hours — a 742% increase in orders-per-minute than the entire event, according to Hamm.
Based on these results, Ulta expects its digital volume to further increase — a factor that prompted CEO Mary Dillon to forecast an ambitious 40% increase of the company’s e-commerce sales for 2017.