While brick-and-mortar retailing is failing, Ulta Beauty is succeeding. The retailer’s profits grew 16.6% year on year in the last quarter of 2016 while same store sales grew double-digit for eight consecutive years. Ulta shares are growing faster than Amazon, up 70% year-over-year.
Given that Ulta is expanding its product offerings to include prestige brands, both prestige and mass beauty brands should strategize for visibility on the e-tailer’s online site. Ominchannel is a large part of Ulta’s expansion plan, as its customers who shop online and in-store spend 2.5 times more than customers who just shop in stores. Skin care brands are noticing, and in turn creating stiff competition for search real estate for category keywords. Five brands hold top and equal share (4% each) of brand-related search terms, whereas only one color cosmetic brand (NYX) holds the top rank in search results for search terms in its category.
As Ulta has a robust editorial and social media pages, brands should work with it to showcase their products. Tarte and Honest Beauty are brands that have successfully used Ulta’s social presence to highlight their products. Ulta features a Tarte highlight palette and eyeshadow in a sponsored Instagram video advertisement. On Facebook, Ulta tutorials are placed in promoted posts. The brand also gets a shoutout on Ulta’s homepage.
Honest Beauty uses Ulta as a platform to announce product launches and post Facebook lie content. The brand also gains premium visibility on the Ulta bestsellers page.