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Ulta Beauty Seeks In-Store Sampling Success

Published October 29, 2023
Published October 29, 2023
Ulta Beauty

The beauty industry is worth $625.7 billion in 2023. This figure is expected to increase by a CAGR rate of 3.32%, leading to a predicted market value of $736 billion by 2028. This number continues to rise rapidly due to the effort brands, retailers, and businesses are putting in to reach their full potential. For retailers specializing in beauty, the opportunity to reap the benefits and profits of this market is substantial, which has led to an ongoing push to be the best of the best among big names.

This year, several retailers have upped their game to be the most appealing to beauty consumers. To name a few examples, Walmart has begun offering an AI beauty try-on service, Sephora has launched concept stores in Asia(as well as opening again in the UK), and Boots debuted a beauty-only destination. Businesses that once were not looked to for beauty sales are also getting involved, including TikTok, with its TikTok Shop, where its beauty sales take the top spot, contributing to its $15 billion gross merchandise value. The latest retailer to offer a new service to amplify the beauty consumer experience is Ulta Beauty, which has partnered with wellness technology company SOS to trial smart vending machines in 10 stores across the US.

The SOS-powered machines will provide an innovative sampling experience for Ultamate Rewards members and incentivize new member sign-ups. Members can claim a free sample every week from a range of travel-sized products from varying brands that offer cosmetics, skincare, and haircare products. For the 41 million Ultamate Rewards members, receiving the weekly sample is as simple as entering their phone number or email into the machine, while non-members can sign up and create an account at the machine to receive their first sample.

Alongside the sampling experience, the vending machines will be positioned as an interactive advertising platform, announcing product launches and brand messaging. The machines will also be used to help consumers with accessibility to necessities, offering complimentary Rael period care products for all Ulta Beauty guests—yet another collaborative industry initiative to ease the cost-of-living impact of menstruation, which comes shortly after competitor period care brands joined forces to tackle the tampon tax.

"At Ulta Beauty, we are committed to delivering new, engaging ways for guests to experience, try, and fall in love with new products," says Maria Salcedo, Senior Vice President of Merchandising at Ulta Beauty. "Through our pilot program with SOS, we have the ability to learn how guests are engaging with vending machines and digital brand touchpoints in store, opening up new opportunities to transform the beauty shopping experience. This collaboration further exemplifies our dedication to pushing the boundaries of innovation in beauty retail with a guest-centric approach."

Ulta's decision to take on SOS for this program makes perfect sense, as not only has the tech company executed effective ways to engage with consumers through its machines, it has also mastered the incentive of giving back to customers in partnerships such as this. Both businesses' collective efforts will help build trust and further loyalty, which only aids retailers in their mission to reign in the beauty space.

"We have seen growing demand from both retailers and brands to introduce high-value, targeted engagement with their customers everywhere they go," Susanna Twarog and Robina Verbeek, co-founders and co-CEOs of the BeautyMatter Future 50 brand SOS, state. "By expanding media opportunities in stores, retailers are building more opportunities for brands to connect with their customers. SOS delivers the most sophisticated solution for in-store, interactive retail media while also introducing product discovery opportunities via automated retail."

The partnership with SOS is just one of Ulta Beauty's customer loyalty-based ventures implemented with the aim for business growth. The retailer worked with marketing company Movable Ink earlier this year to create a cohesive email campaign that they hoped would make each loyalty scheme member feel valued as a customer.

Movable Ink did so by utilizing five API data sources: inventory, product recommendation, store information, ratings and reviews, and Ulta's loyalty system. Doing this allowed the marketing firm to synchronize information and target customers based on the time of day they usually shop and their recent purchasing behaviors. The campaign presented customers' accumulated loyalty points and calculated how many loyalty points they could earn if recently browsed products were to be purchased. This customized communication provided insight into the potential rewards the loyalty points collected from the purchase could earn consumers, as well as presenting data, including reviews, product ratings, and stock availability.

Ulta Beauty's mission to be the preferred beauty retailer for consumers is predominantly loyalty program based, which works well as 95% of the retailer's sales come from Ultamate Rewards members. The partnership with SOS is sure to encourage sales with existing and new customers, helping the retailer to continue to grow its customer base and sales success.

The continued emphasis on loyalty member marketing from Ulta competes with other retailers. These include Sephora's Beauty Insider, which boasts 35 million members, from which 80% of its sales come, and Selfridges' newly introduced Selfridges Unlocked, which invites members to exclusive store events, product drops, and monthly prize draws. Ultimately, the way to break through the noise in beauty retail is to be wholly committed to the consumer experience, making each customer feel valued and part of a wider family.


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