Ulta Tests Small-Format Stores, Moves into Wellness as it Seeks Growth


Retail Dive | October 21, 2021


As Ulta aims for $10 billion in net sales by 2024, store growth will continue, with plans to expand its store footprint by 50 stores per year for the next three years. The recent partnership with Target gives the chance to reach a customer Ulta doesn't already have, as well as build loyalty with current guests. The curated assortment at Target is one move for the retailer's success. Ulta continues to invest in its core stores as well, in particular through building a "services hub" in new stores to test certain offerings and technologies. According to executives, service guests spend three times more than others.


While makeup accounted for 53% of Ulta's net sales in 2018, it now accounts for 44% as categories like skincare and haircare have grown. Makeup is still a critical category for Ulta, and according to executives it's finally showing signs of rebounding. After a long downcycle, the category in the first half of 2021 surged 51% at Ulta.


To expand offerings across categories, Ulta launched "The Wellness Shop" in May in select stores and online. Ulta's view of wellness includes five key categories: everyday care, supplements and ingestibles, relax and renew, down there care and spa at home. Ulta is also launching a media network, dubbed UB Media, to allow Ulta brands to advertise with its customers. The idea is that brands can receive Ulta's customer data, advertise across its channels, and all purchases will be driven back to Ulta.


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