5 Ways to Sustain Long-Term Loyalty Like Ulta
A trend toward omnichannel, personalized shopping has accelerated dramatically amid the pandemic, with consumer expectations steadily rising and CG companies and retailers having to elevate their offerings and the way they market them.
Kelly Mahoney, vice president of customer marketing at Ulta Beauty, recently spoke at SAS’ “Ride the Wave of Retail” virtual event — a presentation of NRF 2022 content — sharing the company’s strategy for building digital experiences that drive exploration and discovery, and fostering resilient, long-term relationships.
Here are the top five strategies Ulta leverages.
1. Provide an Engaging and Innovative Digital Experience
According to Mahoney, digital experiences intersect almost every aspect of the Ulta Beauty shopping experience. For example, the company offers its “Glam lab,” which allows consumers to virtually try on products like foundation before committing to a purchase so they can find the perfect fit.
“It's our mobile-first omnichannel personalized approach that lets us adapt quickly and contextualize the consumer experiences in highly relevant ways to engage and delight our customers with every Ulta Beauty engagement,” said Mahoney.
Especially as guests are naturally shifting from one channel to the next, she said, businesses must provide a hub where consumers can discover new products and reap the benefits of remaining loyal.
“Our app-lovers enjoy personalized recommendations,” said Mahoney. “They get beauty tips. They find fun ways to discover new products and services that they never even knew they needed.”
2. Encourage Inclusivity With Diverse Products and Messaging
Mahoney said the company is focused on inclusive attitudes, behaviors, and motivations that create experiences that capture the hearts of consumers and ignite passion and loyalty for the Ulta Beauty brand — for all beauty enthusiasts.
“One such example is how we work to celebrate the undeniable influence that Black women have had on the beauty industry,” she said, referencing the Muse campaign, which launched in February 2021 and stands for magnify, uplift, support, and empower — a platform for creating “tangible impact with and for the Black community. “
“A staggering insight that we uncovered is that one third of Black beauty enthusiasts feel discriminated against by the beauty industry. This is a real problem,” said Mahoney. “And it's for all of us in the beauty industry to work together and solve.”
3. Reach Consumers With Consolidated Experiences
The industry is heading toward consolidated shopping, allowing consumers to find everything they need from one central location. Ulta has achieved this through its partnership with Target, which has brought just over 100 Ulta centers to the retail powerhouse thus far.
“Our stores serve as the hub of guest experiences, where we allow our guests to come in and play, to discover, and to explore the joy of beauty,” said Mahoney, adding that their ever-evolving omnichannel strategy enables the company to deepen relationships with current guests while introducing Ulta Beauty to new guests.
4. Reward Customer Loyalty to Boost Retention Rates
Rewards programs have proven to be a lucrative way to not only retain loyal customers, but to also measure and analyze their movements and inform future strategies to continue building an immersive digital experience .
Ulta saw a 14% CAGR increase in its loyalty program from 2016 through 2019, and even more recovery since 2020, ending Q2 of 2021 with a record-breaking 34.6 million active members — the highest in the history of the program.
Ulta consumers also have access to the Target Red Circle program as part of the partnership.
“Our roadmap is focused on enhancing the value of our best in class points offer,” said Mahoney. “We will lean into that strength by adding even more ways to earn and even more ways to redeem our points.”
5. Leverage Data to Understand Consumer Interest
As consumers’ expectations grow higher, retailers must keep up with new demands and shifting trends. In order to do so, Ulta leans on comprehensive data to gain a deeper understanding in how personalized experiences should operate across every Ulta Beauty touchpoint.
“We are leveraging the power of our dataset to fuel the growth even of our brand partners,” said Mahoney, who added that Ulta is sharing first-party data with its partners to achieve mutual growth, calling the network UB Media.
“With this dataset, we understand what our members are buying, how frequently they are buying, where they're buying — whether that be in the site, in the app, or even in our stores,” said Mahoney.
