Expert answer:Please see the attached “Questions” and “Case” files and try to complete the assignment.Requirements: Three pages; Single Spaced; APA format.If you have any questions, please ask me immediately.Thank you!
case.docx
case.docx
questions.docx
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A Beauty Retailer That Knows What You Want; Ulta mixes mass brands, such as
CoverGirl, with prestige ones, such as Clinique, prompting women to stay in the store with
services and products to try
Holmes, Elizabeth. Wall Street Journal (Online); New York, N.Y. [New York, N.Y]21 June
2016: n/a.
One of the rare growth stories in retail can’t be found on Fifth Avenue or Rodeo Drive. It’s in a
suburban strip mall.
This summer, Ulta Beauty, a chain that sells makeup, skin care, fragrances and hair products,
will add 40 stores, part of plans to increase by 100 this year to more than 970 stores. At a time
when many are shuttering doors because of lagging traffic and growing internet sales, Ulta is
drawing in shoppers and getting them to spend more.
In many subtle ways, Ulta offers a shopping experience that gets how women wear and, as
importantly, play with beauty products. It stocks both mass brands like CoverGirl and
Maybelline, which women typically buy at drugstores, as well as prestige brands like Lancôme
and Clinique, which typically require a trip to a specialty or department store.
The brand mix and range of prices, from $2 lip liners to $200 hair dryers, also appeals to all ages.
Mothers and daughters often shop together. Three quarters of Ulta shoppers spend 15 minutes or
more in the store, the company says, and 20% spend 30 minutes or more. Stores have hair salons
and many also have facial stations and “brow bars” for eyebrow waxing.
“You hear and see and smell and feel beauty
happening around you. It elevates the whole store,
even if you are not using it,” says Dave Kimbell,
Ulta’s chief marketing and merchandising officer.
Women linger to test shades of lipstick and sniff
different fragrances, or get a blowout. “You can’t
Amazon that,” says Oliver Chen, head of retail
and luxury goods at Cowen & Co. Mr. Chen, an
analyst, called Ulta one of a handful of “UnAmazon-able” retailers in reports issued this year.
Most Ulta stores are in strip malls, where shoppers can park easily and walk up to the door
instead of navigating a traditional enclosed mall. The company often selects corners with
inexpensive real estate and little to no competition.
“Highland, Ind., Macon, Ga., Lubbock, Texas, we make a big impact in those markets,” says
Elaine MacNeil, senior vice president of sales for North America at Urban Decay, the prestige
cosmetics line owned by L’Oréal that is sold in Ulta.
“I’m like a kid at Disneyland,” says 23-year-old Yanely Amadiz, who lives in New Orleans, of
her weekly trips to Ulta. The stay-at-home mom chronicles her love of beauty products in videos
on her YouTube channel.
Ulta’s sales for its most recent quarter rose nearly 24% to $1.07 billion. Sales at stores open at
least 14 months and e-commerce climbed more than 15%. Ulta credited an 11% increase in store
traffic and a 4.2% increase in shopper spending on each trip.
Founded in 1990 by a former drugstore executive, Ulta has expanded steadily and largely quietly
from its headquarters in Chicago suburb of Bolingbrook, Ill. Mary Dillon, the former global
chief marketing officer of McDonald’s and former CEO of wireless provider U.S. Cellular,
became Ulta’s chief executive in 2013 in the midst of its aggressive expansion.
Sales of beauty products, particularly prestige brands, have been strong, in part, boosted by the
rise of prominent bloggers who are influential in recommending products and teaching women
how to use them.
Retail competition is lively with drugstores expanding their beauty displays and brands opening
their own stores. Online retailers are in the fray, though women tend to turn to the web for
makeup when they are replenishing products.
Ulta’s competitors include the more upscale Sephora, owned by LVMH, and smaller rivals
SpaceNK and Bluemercury, owned by Macy’s. Ulta’s main point of differentiation from the
others is its mix of both prestige and mass brands. Sephora also has a stronger foothold in big
cities.
Ulta has had to convince prestige brands to be sold alongside mass products, says Tara Simon,
senior vice president of merchandising for prestige beauty at Ulta. Ms. Simon prepared
presentations about what Ulta calls “mass migration”: a shopper coming into the store to buy a
cheaper lipstick and wandering over to check out more expensive items.
Some companies, like Estée Lauder Cos., says it sells select higher-end brands at Ulta but not
others in order to maintain the brands “exclusivity.” “This is the only place where we have our
brands next to a mass environment,” says Thia Breen, group president for North America at
Estée Lauder Cos.
Ulta’s 10,000-square-foot stores are divided into two distinct halves, with prestige makeup and
skin care on one side and mass brands on the other. The two top-tier brands, Clinique and
L’Oréal-owned Lancôme, have large, dedicated areas with special seating, signs and fixtures.
“Our experience, as a brand, is more elevated than some of the other brands,” says Ramzy Burns,
senior vice president of sales for Lancôme.
The stores’ salon services are used by a fraction of customers, but they are important
strategically. Women need to book appointments to get their hair or eyebrows done and that
forces them into the store regularly. Hair salon customers spend 2.5 times more than non-salon
customers and shop twice as frequently.
Letting shoppers try a product before buying is a big part of the Ulta experience. Prestige
cosmetics and skin care customers are accustomed to it, but testing is less available elsewhere.
At Ulta, even the hair dryers on display are plugged in so women can try them. It saw the need to
expand its mass testing when “guests created their own testers,” Mr. Kimbell says. Women
simply opened up products to try them.
“People want to play,” says Scott Friedman, chief executive of NYX Cosmetics, a mass brand
from L’Oréal that has expanded its presence over the years at Ulta.
Ulta instructs sales associates to help when needed but not hover or serve as gatekeepers like
they often do at a department store. The stores are meant to feel relaxed and welcoming to
someone coming from the grocery store or a yoga class, Mr. Kimbell says.
“You can go as you are, in a harried moment,” says Terry Darland, president of North America
for Parfums Christian Dior, which includes the fragrances sold at Ulta.
Promotions can be a point of contention for retailers because brands often don’t want to be sold
at a discount. Ulta created a loyalty program, Ultamate Rewards. Shoppers earn about one point
for every dollar spent; 100 points earn customers $3 off, for example.
Eight in 10 purchases are made by the 19.4 million active shoppers in Ulta’s loyalty program. At
checkout, the register alerts employees to which brands a shopper regularly buys so they can
sometimes offer a free sample of a product they may like.
Kaitlin Rounds, a college student who lives in Columbia, Mo., says she prefers it to the Sephora
program, which emphasizes free samples in exchange for points. “It’s just straight money, which
is nice,” says the 22-year-old, who shops at Ulta two to four times a month.
Ulta also uses bundling promotions, designed to get shoppers to try new products and buy more.
“It’s not about a discount, which is important to us,” says Jason Yates, vice president of sales and
marketing for John Paul Mitchell Systems, the maker of several lines of haircare products sold at
Ulta.
A Beauty Retailer That Knows What You Want; Ulta mixes mass brands, such as
CoverGirl, with prestige ones, such as Clinique, prompting women to stay in the store with
services and products to try
Holmes, Elizabeth. Wall Street Journal (Online); New York, N.Y. [New York, N.Y]21 June
2016: n/a.
One of the rare growth stories in retail can’t be found on Fifth Avenue or Rodeo Drive. It’s in a
suburban strip mall.
This summer, Ulta Beauty, a chain that sells makeup, skin care, fragrances and hair products,
will add 40 stores, part of plans to increase by 100 this year to more than 970 stores. At a time
when many are shuttering doors because of lagging traffic and growing internet sales, Ulta is
drawing in shoppers and getting them to spend more.
In many subtle ways, Ulta offers a shopping experience that gets how women wear and, as
importantly, play with beauty products. It stocks both mass brands like CoverGirl and
Maybelline, which women typically buy at drugstores, as well as prestige brands like Lancôme
and Clinique, which typically require a trip to a specialty or department store.
The brand mix and range of prices, from $2 lip liners to $200 hair dryers, also appeals to all ages.
Mothers and daughters often shop together. Three quarters of Ulta shoppers spend 15 minutes or
more in the store, the company says, and 20% spend 30 minutes or more. Stores have hair salons
and many also have facial stations and “brow bars” for eyebrow waxing.
“You hear and see and smell and feel beauty
happening around you. It elevates the whole store,
even if you are not using it,” says Dave Kimbell,
Ulta’s chief marketing and merchandising officer.
Women linger to test shades of lipstick and sniff
different fragrances, or get a blowout. “You can’t
Amazon that,” says Oliver Chen, head of retail
and luxury goods at Cowen & Co. Mr. Chen, an
analyst, called Ulta one of a handful of “UnAmazon-able” retailers in reports issued this year.
Most Ulta stores are in strip malls, where shoppers can park easily and walk up to the door
instead of navigating a traditional enclosed mall. The company often selects corners with
inexpensive real estate and little to no competition.
“Highland, Ind., Macon, Ga., Lubbock, Texas, we make a big impact in those markets,” says
Elaine MacNeil, senior vice president of sales for North America at Urban Decay, the prestige
cosmetics line owned by L’Oréal that is sold in Ulta.
“I’m like a kid at Disneyland,” says 23-year-old Yanely Amadiz, who lives in New Orleans, of
her weekly trips to Ulta. The stay-at-home mom chronicles her love of beauty products in videos
on her YouTube channel.
Ulta’s sales for its most recent quarter rose nearly 24% to $1.07 billion. Sales at stores open at
least 14 months and e-commerce climbed more than 15%. Ulta credited an 11% increase in store
traffic and a 4.2% increase in shopper spending on each trip.
Founded in 1990 by a former drugstore executive, Ulta has expanded steadily and largely quietly
from its headquarters in Chicago suburb of Bolingbrook, Ill. Mary Dillon, the former global
chief marketing officer of McDonald’s and former CEO of wireless provider U.S. Cellular,
became Ulta’s chief executive in 2013 in the midst of its aggressive expansion.
Sales of beauty products, particularly prestige brands, have been strong, in part, boosted by the
rise of prominent bloggers who are influential in recommending products and teaching women
how to use them.
Retail competition is lively with drugstores expanding their beauty displays and brands opening
their own stores. Online retailers are in the fray, though women tend to turn to the web for
makeup when they are replenishing products.
Ulta’s competitors include the more upscale Sephora, owned by LVMH, and smaller rivals
SpaceNK and Bluemercury, owned by Macy’s. Ulta’s main point of differentiation from the
others is its mix of both prestige and mass brands. Sephora also has a stronger foothold in big
cities.
Ulta has had to convince prestige brands to be sold alongside mass products, says Tara Simon,
senior vice president of merchandising for prestige beauty at Ulta. Ms. Simon prepared
presentations about what Ulta calls “mass migration”: a shopper coming into the store to buy a
cheaper lipstick and wandering over to check out more expensive items.
Some companies, like Estée Lauder Cos., says it sells select higher-end brands at Ulta but not
others in order to maintain the brands “exclusivity.” “This is the only place where we have our
brands next to a mass environment,” says Thia Breen, group president for North America at
Estée Lauder Cos.
Ulta’s 10,000-square-foot stores are divided into two distinct halves, with prestige makeup and
skin care on one side and mass brands on the other. The two top-tier brands, Clinique and
L’Oréal-owned Lancôme, have large, dedicated areas with special seating, signs and fixtures.
“Our experience, as a brand, is more elevated than some of the other brands,” says Ramzy Burns,
senior vice president of sales for Lancôme.
The stores’ salon services are used by a fraction of customers, but they are important
strategically. Women need to book appointments to get their hair or eyebrows done and that
forces them into the store regularly. Hair salon customers spend 2.5 times more than non-salon
customers and shop twice as frequently.
Letting shoppers try a product before buying is a big part of the Ulta experience. Prestige
cosmetics and skin care customers are accustomed to it, but testing is less available elsewhere.
At Ulta, even the hair dryers on display are plugged in so women can try them. It saw the need to
expand its mass testing when “guests created their own testers,” Mr. Kimbell says. Women
simply opened up products to try them.
“People want to play,” says Scott Friedman, chief executive of NYX Cosmetics, a mass brand
from L’Oréal that has expanded its presence over the years at Ulta.
Ulta instructs sales associates to help when needed but not hover or serve as gatekeepers like
they often do at a department store. The stores are meant to feel relaxed and welcoming to
someone coming from the grocery store or a yoga class, Mr. Kimbell says.
“You can go as you are, in a harried moment,” says Terry Darland, president of North America
for Parfums Christian Dior, which includes the fragrances sold at Ulta.
Promotions can be a point of contention for retailers because brands often don’t want to be sold
at a discount. Ulta created a loyalty program, Ultamate Rewards. Shoppers earn about one point
for every dollar spent; 100 points earn customers $3 off, for example.
Eight in 10 purchases are made by the 19.4 million active shoppers in Ulta’s loyalty program. At
checkout, the register alerts employees to which brands a shopper regularly buys so they can
sometimes offer a free sample of a product they may like.
Kaitlin Rounds, a college student who lives in Columbia, Mo., says she prefers it to the Sephora
program, which emphasizes free samples in exchange for points. “It’s just straight money, which
is nice,” says the 22-year-old, who shops at Ulta two to four times a month.
Ulta also uses bundling promotions, designed to get shoppers to try new products and buy more.
“It’s not about a discount, which is important to us,” says Jason Yates, vice president of sales and
marketing for John Paul Mitchell Systems, the maker of several lines of haircare products sold at
Ulta.
Please see the case in the attached case file and try to answer the following questions ONE BY
ONE according to the order.
Company to focus on: Ulta Beauty
1. Specific Problems and Supporting Info: Please state the specific problems the company is
facing and the specific info that suggests it.
2. Generic Problems: Now please state the specific problems the company is facing in
Marketing Language.
3. Use of Process and Frameworks: Please use the “Consumer Decision Process” and
“Factors Affecting the Consumer Decision Process” frameworks provided below as the
bases of your thinking.
4. Generic Solutions: Please generate generic solutions in Marketing Language that can help
solve the problems.
5. Specific Solutions: Now please provide specific solutions that you believe can solve the
specific problems that the company is facing.
*Frameworks:
…
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