March 23, 2021
In Episode 23 of Earned, Conor sits down with Shelley Haus, CMO of consumer- (and brand-) favorite retailer Ulta Beauty.
We start with Shelley’s journey from breakfast to beauty, and hear a bit about her time as marketing director for the Quaker breakfast portfolio before learning why she was drawn into the world of beauty. We then dive into Ulta Beauty’s evolution over the last few years, and Shelley shares how she and the team rethought the brand’s identity and value proposition to help bring Ulta Beauty to life and forge meaningful connections with consumers.
Recording this episode exactly a year after the COVID-19 shutdown, we discuss how Ulta Beauty navigated the pandemic internally and externally, including the retailer’s transition to a full e-commerce business over the past twelve months. We also chat through the day-to-day of Shelley’s role as CMO, and explore Ulta Beauty’s relationships with its brand partners. Shelley shares how the retailer nurtures brand growth through its go-to-market strategy, tentpole events and campaigns, and by helping its brands leverage the beauty spend data of Ulta Beauty’s 30 million-plus guests to make smarter marketing decisions. Finally, we hear about where Shelley sees Ulta Beauty going in the next five years (and of course, we talk about the retailer’s influencer marketing philosophies), before closing the episode with a sneak preview of Ulta Beauty’s exciting new partnership with fellow retail giant Target.
The following interview has been lightly edited for concision.
Conor: So the people that are going to be listening to this podcast are going to be primarily brands, right? There are going to be brands that are either in Ulta and want to know more about what your vision is for the future, or smaller brands that are making the decision between staying direct-to-consumer or going to different retailers. So I'd love to dive into your relationships with the brands and how you think about that from a marketing perspective, because I know that having a reputation as a brand builder is pretty critical. So how do you think about your relationship with the brands from a marketing perspective, and then how do you interact with them to kind of co-market yourself?
Shelley: Well, first of all, we don't think of [brands] as vendors. We think about them as brand partners. They really are partners. We think about ourselves, and brands think about us, as a place for growth. We've had an unbelievable growth story for sure, no doubt about that. When brands look around and survey the landscape, it's pretty clear that Ulta Beauty is a place for brands to grow.
I'm very proud that we are the number one preferred brand partner. McKinsey actually did a study last year to understand our brands’ perceptions, and when asked who they most want to partner with, we were number one on that list versus any other retailer. That means a lot to us because, back to how we operate as a team, partnership, collaboration, focus, vision, understanding, empathy—all of those things come to life in our partnerships with our brands. That's a big piece of why they want to work with us.
And then, the second thing I would say is, back to the growth idea, we've done so much over the past five, six years to establish how we take brands to market. So think about big brand launches, like KVD Vegan Beauty, Beekman 1802, we're in the middle of our Alicia Keys Keys Soulcare launch—the way we've been able to take these brands to market and make a big splash and make them successful, has grown and grown as a key muscle of ours. [We’re also] really ramping up ways for brands to invest with us, and use our data to make their marketing dollars, and ours, more successful. Back to performance marketing and return on ad spend, this is an area where, because we have 30 million-plus guests and we have their beauty spend across categories, across price points, across products and services, the ability for us to be able to target in the digital and social space, and partner with our brands to be able to do that, is really unparalleled. So that's been a really exciting piece and we're really gonna ramp that opportunity up for the brands this year.
The last thing I would say is our big tentpole events like 21 Days of Beauty, which just started, [are] a great opportunity for us to showcase a lot of the hero brands and so many more. We have 21 Days of Beauty, we have Gorgeous Hair Event, Love Your Skin Event, all these tentpole events that our guests love. And they're looking for new products, hero products, and that's their time of exploration. I'll mention one more because it's particularly important when we think about smaller brands and how we nurture smaller brands. We've crafted multiple platforms to be able to do that. One is Sparked at Ulta Beauty, which we launched about two and a half years ago, and that really is to take these digitally native, up-and-coming brands and give them space in the store and on the site and really bring their stories to life so that we can be the nurturers of these baby brands.
We've really doubled down in the last year on our focus on Black-owned brands and bringing those amazing brands and founders to life. At the end of January, [we launched] our MUSE platform, which stands for Magnify, Uplift, Support, and Empower, and it's 100% focused on celebrating Black voices in beauty. So I'm excited about the way that we bring brands in and bring them to the world. So [Ulta Beauty is a] 100% growth partner, and I'm really proud of how we've built our reputation as the place for brands to come and grow.
Conor: What's going to drive growth for Ulta for the next 10 years? I would assume eventually you run out of new places to put stores, within the U.S. at least. So what are the big growth stories for you guys over the next decade?
Shelley: Well, I'll think three to five years out because now when anybody says 10 years it feels like, who knows what that’s going to look like. But there are multiple pieces. Definitely a lot of what's happened is here to stay. Being able to shop anywhere, shop anytime. So we see a lot of runway with things like curbside [pickup], direct-to-home delivery, buy online, pickup in store. I'll shift to the idea of what we're doing right now, which is connecting virtually. So, there’s a lot of room in thinking about how we develop out shoppable content platforms, how we continue to use our virtual try-on GLAMlab, which we launched before 2020, and it became critically important in 2020, especially when the stores were closed. But even when stores opened, testers looked—and still look—very different. The way our team has ramped that up has been incredible. We've gotten 12 times the engagement that we did before the pandemic. We had 11 million shades tried on in 2020. So that just shows you the engagement. We've got more than 7,000 products on there, and we're adding 500 every week.
Conor: I listened to your other podcast from October, and I think you were either six or eight times the engagement then, so it continues to go up.
Shelley: We’re double that now. So those types of innovations, and I'll mention Skin Advisor too, the ability to explore, play, and get guidance virtually is something that's going to be critically important over the next few years. You mentioned stores, we still think the stores are the heart of where beauty happens. The fact that people are back in the stores just showcases that people are ready to experience beauty and see things in person again. And we do think there's still runway for growth in the number of stores.
Also, our Target partnership is part of our omni-channel strategy. It's another point of distribution. They've obviously got unbelievable traffic and have really come out strong out of the pandemic year as an essential retailer that people absolutely love. So I'm excited about that growth and we'll open a hundred or so of those in the back half of this year with many, many more to come, and I’m excited about the experience that we're bringing together there. I think it's going to be a very innovative upscale approach, and the power of our loyalty programs with our over 30 million guests, their over 70 million, so a hundred million guests between the two of us. To be able to reach those beauty lovers in a new way is pretty incredible.
I think there will be many more innovative partnerships to come and then innovation in our e-com business, as we think about the shift there. So, the stores and e-com business play a big role together, they always have, and that continues to evolve. So I think being able to support that and really innovate in that space, we're really proud of the app that we have and the teams have done so much amazing work on that over the last couple of years. So we've got amazing content, easy shoppability, GLAMlab, Skin Advisor, there's a huge amount of runway in all of those spaces for us to be able to continue to cement our leadership and our growth story. And people still love beauty, which is fantastic.
Conor: Whether they're at home or they're at work, they still love it. And I actually did some investigation into the app. It was 800,000 reviews, 5.0 out of 5.0, pretty good. When you started your career in marketing, digital was starting to be a thing, but it's not like it is today. It's kind of wild for me to think about how much technology there is in a company like Ulta, right? You guys have gone out and acquired companies that are technology-based, you've got an app that's got integrated AR technology, which is super cool. It's just such a different skill set than I think you had to have when P&G first came around. It’s really cool to see.
Shelley: I agree. I was just thinking about that a couple of weeks ago, because even in my early days at Quaker, when we were launching a new product, you had only a certain number of levers you could pull. You could do a coupon in the grocery store, you could do floor talker in the grocery store, you could do an ad, you could maybe do radio, you could do an insert in the newspaper. Now I love it so much more because it's so much more dynamic and there are always new tools. What's the role of TikTok and other emerging platforms, and we're doing live streaming, and the idea that all of this would be where we were going probably would've been surreal to us 15 years ago, but the content centricity and the idea that as much as we are data and technology, creativity and ideas are more meaningful than ever before. So, we try to remind ourselves that internally too, in this era of AI and data centricity, ideas and creativity are still king.
You can watch the entire interview here, or listen to the full episode on on Spotify, Apple Podcasts, or Google Podcasts. To catch up on our other 22 episodes, featuring leaders from brands like ColourPop, INH Hair, Ilia Beauty, Gymshark, and Huda Beauty, visit our Earned Podcast page.
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