Ulta Beauty’s success can be attributed to, in large part, its Ultamate Rewards loyalty program.
Ulta Beauty CEO Mary Dillon noted the powerful competitive edge that the company’s loyalty program provides during the May 26 first-quarter earnings call.
“2016 is off to a phenomenal start with excellent top and bottom line growth in our first quarter,” Dillon said, according to Seeking Alpha. “Growth in our loyalty program continues to fuel our business results. Ultamate Rewards membership grew to 19.4 million active members, up 25% year-over-year. This continued acceleration and signups reflect our store associates’ efforts to convert new members and strong traffic, driven in part by our advertising campaign. The number of members shopping increased as well as their average sales per ticket, per visit.”
What’s more, Dillon said that loyalty member retention has increased steadily each quarter.
“Using our loyalty program points as currency, our CRM team is working closely with our merchants and our brand partners to continue developing targeted and relevant campaigns that are increasingly resonating with our guests,” she explained. “Our marketing mix continues to evolve with great balance across television, radio, digital and social media as well as our traditional print vehicle. There are several factors coming together to drive the momentum of our business. Healthy consumer demand in the beauty category, also Beauty's unique and relevant format and positioning and effective collaboration across the enterprise which is driving strong execution of our growth strategy. We grew the top line 23.7% and delivered 15.2% comps on top of an 11.4% comp in the first quarter of 2015. This is our best comp growth since 2006.”
Ecommerce continues to see rapid sales growth, Dillon said.
“In March, we ran television and radio ads for our signature 21 days of beauty event,” she said. “We complemented this with an aggressive online video campaign as well as extensions into online radio with Spotify and Pandora. We elevated our social media and improved efforts anchored on our spring trends, we surrounded our consumer with current and relevant content online and in store as well as activation at high profile events including the Coachella Music Festival.”
Ulta Beauty’s comprehensive campaign for Mother’s Day, which was called Pamper Her with Pretty, was designed to build brand awareness, deepen connections with customers, and provide a platform to make Ulta Beauty a top of mind destination for gift giving, especially in Fragrance.
Mother’s Day activities also included a social media campaign with the launch of the special video titled, “Mom The Original Beauty Icon,” which invited guests to celebrate mom by sharing what makes their own mom beauty iconic through post on Facebook, Twitter, or Instagram. This campaign was viewed 4.5 million times.
“We’ve produced compelling training videos and enhanced our sampling program,” Dillon said. “While we’ve made great progress, we’re just getting started with our efforts to evolve Ulta Beauty collections to continue to represent our brand’s personality.”