We are the largest beauty retailer that provides one-stop shopping for prestige, mass and salon products and salon services in the United States. We focus on providing affordable indulgence to our guests by combining unmatched product breadth, value and convenience with the distinctive environment and experience of a specialty retailer. Key aspects of our business include:All Things Beauty, All in One Place ™. Our guests can satisfy all of their beauty needs at Ulta Beauty. Our stores and website offer more than 20,000 products from over 500 well-established and emerging beauty brands across all categories and price points, including Ulta Beauty’s own private label, the Ulta Beauty Collection. The beauty products are arranged in self-service displays and full-service boutiques in a bright open store environment that encourages our guests to enjoy discovering new products and services. We believe we offer the widest selection of categories across prestige and mass cosmetics, fragrance, haircare, skincare, bath and body products and salon styling tools. We also offer a full-service salon in every store featuring hair, skin and brow services.
Our Value Proposition. We believe our focus on delivering a compelling value proposition to our guests across all of our product categories drives customer loyalty. We offer a comprehensive loyalty program, Ultamate Rewards, and targeted promotions through our Customer Relationship Management (CRM) platform. We also offer frequent promotions and coupons, in store events and gifts with purchase.
Convenience. Our stores are predominantly located in convenient, high-traffic locations such as power centers. Our typical store is approximately 10,000 square feet, including approximately 950 square feet dedicated to our full-service salon. Our store design, fixtures and open layout provide the flexibility to respond to consumer trends and changes in our merchandising strategy. As of October 1, 2016 Ulta Beauty operates 928 retail stores across 48 states and the District of Columbia and also distributes its products through its website, which includes a collection of tips, tutorials and social content.
We were founded in 1990 as a beauty retailer at a time when prestige, mass and salon products were sold through distinct channels - department stores for prestige products, drug stores and mass merchandisers for mass products, and salons and authorized retail outlets for professional haircare products. We developed a unique specialty retail concept that offers All Things Beauty, All in One Place ™, a compelling value proposition, and a convenient and a welcoming shopping environment.
Our Competitive Strengths
We believe the following competitive strengths differentiate us and are critical to our success:
- Differentiated merchandising strategy with broad appeal – We believe our broad selection of merchandise across categories, price points and brands offers a unique shopping experience for our guests. While the products we sell can be found in department stores, specialty stores, salons, drug stores and mass merchandisers, we offer all of these products in one retail format so that our guests can find everything they need in one shopping trip. We offer more than 500 brands. We also offer Ulta Beauty Collection products in key categories such as cosmetics, skincare and bath. Because we offer a broad array of products in prestige, mass and salon, we appeal to a wide range of customers including women of all ages, demographics and lifestyles.
- Our unique customer experience – We combine unmatched product breadth, value and convenience with the distinctive environment and experience of a specialty retailer. Our well-trained, non-commissioned beauty advisors provide unbiased and customized advice tailored to our guests’ needs. Our customer service strategy, convenient locations, attractive store design and compelling e-commerce offerings combine to create a unique shopping experience.
- Loyal and active customer base – Over 18 million Ulta Beauty guests are active members of our Ultimate Rewards loyalty program. We use this valuable proprietary database to drive traffic, better understand our guests’ purchasing patterns and support new store site selection. We regularly employ a broad range of media, including digital, catalogs and newspaper inserts and targeted promotions driven by our CRM platform, to drive traffic to our stores and website..
- Strong vendor partnerships across product categories – We have strong, active relationships with over 350 vendor partners. We believe the scope of these long-term relationships, which span the three beauty categories of prestige, mass and salon creates an impediment for other retailers to replicate our model. We work closely with our vendor partners to market both new and existing brands in a collaborative manner.
- Experienced management team – We have an experienced senior management team that brings a creative merchandising approach and a disciplined operating philosophy to our business. We continue to expand the depth of our management team at all levels and in all functional areas to support our growth.
Six strategic imperatives
We are committed to the following six strategic imperatives to drive sustainable long-term growth:
1. Acquire new guests and deepen loyalty with existing guests
2. Differentiate by delivering a distinctive and personalized guest experience across all channels
3. Offer relevant, innovative, and often exclusive products that excite our guests
4. Deliver exceptional services in three core areas: hair, skin health, and brows
5. Grow stores and e-commerce to reach and serve more guests
6. Invest in infrastructure to support our guest experience and growth, and capture scale efficiencies