Why Is The Beauty Chain Ulta Growing While The Rest Of Retail Shrinks?

Image courtesy of Mike Mozart

In the last few years, Ulta stores have sprouted in strip malls across the country. The chain plans to open 100 new stores this year. How are they expanding when brick-and-mortar retail in general seems doomed? The company credits its variety of price points, ability to quietly upsell customers to prestige brands, and its salon.

How do all of these things fit together? Ulta stores have a few sections, but the merchandise can broadly be divided into cosmetics that you’d find at a discount or drug store, cosmetics that you’d find at a department store, and a salon, all of which play their roles. There are also beauty tools, which are the priciest single items in the store, along with skin care and a men’s section.

The Wall Street Journal explains that Ulta has been growing impressively, and that makes sense: they let customers try out products before purchasing, and being able to smell a product or see how it looks on your own skin is important when making makeup purchasing decisions.

Better still, a shopper who ran in to pick up a tube of Cover Girl mascara might see a pricey bronzer while walking around the store, and just by having different types of products in the same store, Ulta has upsold her.

When the chain first began this strategy, the pricey brands didn’t want to be in the same store as the drugstore stuff. Once they came along, though, they started to see customers flitting from one side of the store to the other. Having something for everyone at various price points brings more shoppers to try and maybe purchase something they hadn’t expected.

A Beauty Retailer That Knows What You Want [Wall Street Journal]