Ulta Beauty (Ulta) – Get a free reportIt strengthened its digital capabilities for beauty and skin care in 2022 by creating glamlab, which is a virtual way to try products before you buy. Customers can upload a photo of themselves and use the different products to see how it will look on their face and skin.
Ulta Beauty and Target (TGT) – Get a free reportIt has also committed to expanding Target’s store-within-a-store presence, with the goal of creating at least 800 Ulta Beauty convenience stores within Target Sites. The Ulta Beauty in-store shopping experience is supposed to give the target shopper a little taste of what it’s like to shop in stand-alone Ulta Beauty stores. The partnership rivals that of Kohls and Sephora.
Ulta Beauty plans to open 25 to 30 new stores in 2023, similar to what it did in 2022. The beauty chain also plans to offer “facelifts” or move another 25 or so stores, according to Ulta Beauty CEO Dave Kimbell. . As Ulta Beauty looks to the future, it plans to expand from 1,500 to 1,700 stand-alone stores along with the ones inside Target stores. Target is also expanding same-day delivery in 2023, finding more ways to compete with Amazon’s express delivery services.
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Ulta Beauty faces the challenges
However, Ulta still faces some challenges. Kimble referred to the robbery as an “increasingly troubling challenge”. Other retailers are also seeing an increase in deflation, aka theft, such as Walmart, CVS and Walgreens according to Business interested. Many stores deal with rising thefts and labor shortages in similar ways.
Ulta Beauty is working to help reduce shrinkage by strengthening employees as much as possible. In the short and long term, companies are looking to combat the theft of quality products such as perfume in other ways. Stores are installing locked cabinets to reduce shrinkage, creating a situation where customers who want to purchase high-end perfume must seek help to make their purchase. However, this works two ways, it causes customers not to want to buy due to having to wait for a staff member to help them make a purchase, but it protects inventory from being stolen.
Locked cabinets and many retailers not operating at full capacity mean companies have resorted to hiring security and moving higher-priced products until they are only available online rather than in retail locations. When products at Ulta Beauty can sell for up to $355 for a fragrance like Chanel or Dior, losing a product is more than just a few dollars. Kecia Steelman, Ulta Beauty’s chief operating officer, said high-end inventory will be kept in lockers in 70% of stores by the end of 2023.
Ulta Beauty isn’t alone
Other retailers have the same problem even with low priced inventory, eg dollar tree He also thinks of the “defensive marketing” technique, by reserving merchandise. “This is no different than what you see in many other retailers across the industry,” said Dollar Tree Chief Financial Officer Jeffrey Davis. “Some of this is social, some of it is economic, and some of it is, of course, our own. And we’re taking all appropriate steps that we can to control it and mitigate it where we can.”
The problem of growing deflation is present throughout the retail industry, with Target even reporting that theft has affected the retailer’s deflation rates. In a contravention report, thieves are targeting cheaper items such as household products over high-end products such as jewelry, according to the National Retail Federation and risk consulting firm K2.