After testing the waters for several years, Ulta Beauty is the latest retailer to launch a retail media network capturing the increasing pool of ad dollars looking for closed-looped systems as marketers prepare for a cookie-less future. The top 10 retailers in the US already have retail media networks in place, and according to McKinsey & Company, retail media is expected to capture approximately $100 billion in ad spend by 2024.

The network "provides a win-win-win for everyone. It's a new revenue stream for us, a win for clients or brand partners and a win for our guests," said Brent Rosso, Vice President of UB Media. "The win for the consumer is a seamless experience and better personalization."

The largest beauty retailer in the US launched a retail media network to leverage Ulta Beauty's consumer insights in a new way, providing brands direct attribution between ad spend and actual purchases. The success of the network, called UB Media, will rely on its data capabilities to better reach its customers through addressable advertising, leveraging data its community of 37 million Ultimate Rewards members.

In 2021, Ulta reported that Ultimate Rewards members make up more than 95% of Ulta Beauty sales, both online and in-store. And 45% of that 95% is made up of its Diamond and Platinum members, which are the customers that shop most frequently and spend the most. Platinum members spend at least $500 with Ulta per year and Diamond members spend at least $1,200.

UB Media builds upon the company's existing Digital Marketing Partner Program to create more iterative opportunities within the ever-evolving omnichannel environment. "UB Media harnesses the power of our unmatched, first-party data from our 37 million loyal members to transform the way our brand partners can connect with beauty lovers," said Rosso. "No one knows the beauty industry and its audience like Ulta Beauty. Our new offering reinforces our ability to engage guests where, when, and how they want to connect, with hyper-focused advertising efforts in a dynamic ecosystem and further elevates our position as brand partner of choice."

Ulta Beauty recognizes that retail media networks are increasingly critical within the modern marketing mix and, for retailers, a valuable opportunity to strengthen brand partnerships. The retail media network offers an enriched portfolio of ad products and channels. At launch, the network offers advertising access via offsite display, videos, social and influencer as well as onsite sponsored products. This full suite of ad inventory, experiences, and value-added services will be supplemented with additional formats in the future.

Ulta Beauty's competitive advantage for retail media in the beauty category could be short-lived, according to a Sephora job post from earlier this year for a senior director to help spearhead its retail media network initiatives.