Ulta CEO talks beauty growth, revamped loyalty program at NRF 2024
Despite ongoing inflation, the beauty category has maintained growth. At NRF 2024 in New York City, Dave Kimball, CEO of Ulta Beauty, detailed the ways in which the retailer is attempting to stay ahead of the curve by listening to its customers.
Kimball said that engaging with consumers, especially on social media, is key for the retailer to take note of emerging trends, and therefore offer products that keep Ulta’s assortment fresh. He also cited that elevating in-store services like Ulta’s hair and eyebrow styling are also key in keeping customers loyal.
“Our team is continually listening and trying to understand where and how the category is evolving, and how Ulta Beauty can be part of that journey and really setting the journey forward,” Kimball said. “We continue to evolve our assortment through new brands and new experiences. Services have always played a big role in our business. So in our hair salon for example, we will continually elevate innovating in the types of products and services and experiences that we're delivering.”
While it was too soon to note specifics, Kimball said the recent holiday season was a success for Ulta, capping off a strong 2023. In its latest quarterly earnings, Ulta’s comparable sales rose 4.5% with a nearly 6% increase in transactions, signaling the resilience of the beauty category at large. Per its latest figure, Ulta operates 1,374 stores across the U.S., including its successful store-in-store partnership with Target.
“A year ago at this time, there were a lot of concerns around recession and consumer challenges,” he said. “And we faced some of them, but I think by and large the year has gone pretty well from a consumer standpoint. We saw that throughout the first three quarters of the year, a lot of strength in consumer behavior despite some of the anxiety around inflation. Consumer spending overall was strong.”
Like other retailers, Ulta has bolstered its loyalty program. Earlier this month, Ulta updated its Ultamate Rewards program with a new look and name and enhanced benefits. The new Ulta Beauty Rewards program gives users points on every purchase, additional benefits for members who reach platinum and diamond status, accelerated earnings with the Ulta Beauty Rewards credit card, and the ability to redeem points on all beauty products and salon services.
“We have over 42 million members of our loyalty program, 95% of sales go through our loyalty program,” said Kimball. “In the third quarter. our loyalty program grew 9%, that's a pretty big number that we continue to grow and reach new beauty enthusiasts across the country in exciting ways.”
Looking ahead, Kimball said he expects 2024 to be a strong year for beauty, with wellness and inclusivity continuing to be trends that influence the category.
“In beauty, there really is an insatiable appetite for discovering new products, new services, new experiences, and new ways to explore the category,” Kimball said. “And that happens across all ages and all demographics and all groups. Part of it is the diversity of the category and the importance of really creating experiences that meet a broad range of needs.”