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How Ulta Beauty keeps people shopping at its brick and mortar stores

Adriene Hill Jul 6, 2016
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At Ulta you can find anything and everything. From $2 lip liners to $200 blow dryers.
Mike Mozart/Flickr

It can be hard to remember the bygone days of shopping.  When we actually had to go to the store to pick something up, instead of just clicking around online.  But, some retailers are finding people actually want to come in to shop. Chains like Ulta Beauty are flourishing because of this. Ulta is a makeup and skin care chain with more than 970 stores planned by the end of the year, and sales were up nearly 24-percent last quarter.

Elizabeth Holmes is senior style reporter for the Wall Street Journal and she wrote about Ulta’s surprising growth. She talked with Marketplace Host Adriene Hill about what she found.

 On what makes Ulta special:

For beauty enthusiasts it’s a destination, and one not like anyother in the beauty landscape today. It combines a mix of mass brands with prestige brands. So the stuff you might buy at a drug store like a good mascara, or you might go to a department store for foundation, you can get them all under one roof [at Ulta]. There is frankly no other place in the beauty landscape that you can get that kind of thing. They sell a little bit of everything. They sell $2 lip liners, they sell $200 hair dryers, so it’s a one-stop shop for a lot of beauty lovers.

On how Ulta convinced prestige brands to sell in their stores:

It definitely took some convincing…they’re pretty cautious about it. They have worked very hard to build up a certain level of cache, and they like to be seen in a department store environment where people get dressed up to go shopping…[but] that sort of old-school way of beauty shopping is not necessarily how Millennials are used to shopping. So Ulta made the case, and Sephora is doing it too, saying ‘hey why don’t you come in and play around, and spend some time in our stores.’ These prestige brands found that there’s a thing called ‘mass migration.’ So if a shopper comes into Ulta and says ‘oh my goodness, I am looking at this mascara over here, but look at this other, slightly more expensive, nicer mascara on the other side of the store.’ So they’re converting shoppers that way, and that won [the prestige brands] over.

On what else is driving the Beauty sector right now:

Beauty is sort of immune to a lot of things that are plaguing apparel right now. There are no sizes obviously, you don’t have to look for a fitting room to try on your lipstick. It’s also not subject to weather, so you can wear lipstick in the winter or the summer, and it’s fun for a lot of women. They see it as entertainment. It’s fairly accessibly priced, even some of the higher stuff that can be expensive, you can save your pennies for that. Whereas in apparel you can get into the high [prices] and only a small part of the shopper base can participate in that.

Click the player above to hear the full interview.

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