Ulta Suspending Most In-Store Services in Response to the Coronavirus
Ulta Beauty's steps to enhance safety measures in light of COVID-19 include temporarily suspending all in-store makeup, skin and brow services.
The beauty retailer is also increasing sanitation measures, store-cleaning frequency and availability of hand sanitizer in high traffic areas, as well as implementing a no-touch approach for its shade-matching display.
"We’ve posted signage in stores directing guests who want to try a product to find an associate who will sanitize testers on demand," CEO Mary Dillon added during the company's earnings call.
Stores will still provide hair services, a decision Dillon said is “based on feedback from experts.”
The company employs about 44,000 associates, and in addition to canceling international travel, limiting U.S. travel, and encouraging employees to stay home when ill, Ulta is adjusting policies to ensure quarantined associates will be compensated during that time, she said.
While the company hasn’t experienced a material impact to its supply chain stemming from the coronavirus, it has begun to see some impact on store traffic in some markets.
“On the flip side, our e-commerce business has continued to perform strongly,” said Dillon, “and I’d say that's true broadly really even including affected area.”
Omnichannel Wins
Ulta reported an 8.5% increase in net sales to $2.31 billion, in its fourth quarter of 2019, ended Feb. 1. Comp-store sales rose 4% for the period, compared with last year’s 9.4% increase.
The increases were seen in spite of softness in the makeup category, with Ultra compensating for the category declines with omnichannel services and marketing events.
It also grew its Ultamate Rewards loyalty program by 8% to include 34.3 million active members, with an average spend of $206.
In other advancements, Ulta rolled out buy-online-pickup-in-store (BOPIS) to all of its stores. It also refreshed its mobile app for a more streamlined buying experience, while augmented reality offered the ability to virtually try on products in multiple categories.
As the demand for “clean products” grows, the company will introduce a framework that aids consumers in evaluating products based on personal values.
Its Romeoville, IL, distribution center, meanwhile, was transition into a fast fulfillment center to improve e-commerce order processing and delivery.
For 2020, the company has the following planned — all of which was caveated with the note that plans were determined without taking the potential effects of the coronavirus into consideration:
- A new online booking and scheduling tool, accessible through the Ulta Beauty app, will let consumers schedule and manage their salon services at all stores.
- For 2020, it expects to open about 75 net new stores, remodel or relocate 15 stores and execute 42 store refreshes. It opened up 86 new stores, remodeled 12, relocated eight and refreshed 240 in 2019.
- The Beauty app will continue to receive upgrades, including the ability to track and activate points, respond to app-only personalized offers, schedule services, check store availability, schedule BOPIS and virtually try on products.
