Ulta Beauty is finding that, by improving the consumer experience on its digital platforms, it is able to boost its eCommerce performance.
On a call with analysts Thursday (March 14) discussing the beauty retailer’s fourth quarter fiscal 2023 financial results, Ulta Beauty CEO Dave Kimbell spoke to these efforts and the positive results they have yielded.
“We successfully transitioned key guest-facing and commerce elements to a new, modern architecture, delivering a fresh guest experience across both Ulta.com and our,” Kimbell said. “…These enhancements, combined with our efforts to drive omnichannel member penetration, resulted in high single-digit growth in eCommerce sales and a 30% increase in member utilization of our app.”
The retailer has expanded its same-day delivery and invested in in-store pickup, driving up the share of digital orders fulfilled by stores from 31% last year to 37%, Kimbell explained, noting that digital has been a high point for the business overall. eCommerce helped to drive the retailer’s overall comparable sales growth of 2.5% year over year, with transactions up but the average ticket down.
Indeed, changes of this kind can be key to securing shopper loyalty. The PYMNTS Intelligence report “The Online Features Driving Consumers to Shop With Brands, Retailers or Marketplaces,” created in collaboration with Adobe and drawing from a survey of more than 3,500 U.S. consumers, noted that 40% of shoppers said that they consider how easy to navigate a given seller’s online store when choosing a digital merchant.
“We also plan to drive growth across digital platforms as we leverage new capabilities to amplify brand launches and events, drive greater digital discovery and conversion and expand personalization across our digital platforms,” Kimbell added.
To that end, eCommerce in the category is already on the rise. PYMNTS Intelligence’s study last year “Tracking the Digital Payments Takeover: Catching the Coming eCommerce Wave,” created in collaboration with Amazon Web Services, found that 39% of consumers are highly likely to increase their online purchases of health and beauty products in the next year — a greater share than said the same of any other kind of purchase.
Plus, the 2023 PYMNTS Intelligence study “Changes in Grocery Shopping Habits and Perception” found that roughly half of all shoppers are buying personal and healthcare products in stores less often.
Discretionary categories such as beauty have felt the impact of ongoing consumer budgetary pressures impacting spending. PYMNTS Intelligence’s study last year, “Consumer Inflation Sentiment Report: Consumers Cut Back by Trading Down,” found that 45% of shoppers cut back on spending on nonessential beauty products, and 38% switched to brands with lower prices.
“We know there’s external pressures on the consumer,” Kimbell said. “…We think consumers are highly engaged in the category, … but will continue to be thoughtful in all of their spending. But fortunately, we know that beauty is an important one [to consumers].”
Amid consumers’ budgetary challenges, Ulta Beauty’s focus on enhancing the digital consumer experience has helped to drive continued engagement, drawing in eCommerce customers. In an era where ease of navigation and digital convenience are paramount considerations for consumers, Ulta’s approach aligns with evolving shopper preferences. Plus, with consumer trends favoring increased online engagement in the health and beauty category, Ulta Beauty’s focus on digital positions it well to meet evolving consumer needs and preferences.
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