Everything you’re made of makes you beautiful
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Now that the masks have been removed and life is returning to normal, women have a new relationship with the face they see in the mirror. Your old skincare and makeup routines have fallen by the wayside, replaced with a new focus on health and a desire to express your own most beautiful, natural self.
At the same time, inflation is limiting their spending, so some consumers are trading in their old favorite prestige brands for more affordable alternatives.
Women are taking a fresh look at the beauty category and these three macro trends: the clean, fresh face of beauty; growing individualism in beauty; and the downward trade: they threaten to disrupt the retail sale of beauty products.
Ulta, the nation’s largest specialty beauty retailer, is ahead of the curve and ready to meet women’s changing beauty needs as you ditch your mask and prepare to show your new face to the world.
So far, higher-income consumers (family income over $100,000) have not felt the effects of inflation, with NPD reporting that their spending increased 14% during the first half of the year.
However, the Estée Lauder Companies, the global leader in prestige beauty, just reported that revenue in its most recent quarter ending June 30 was down 10% and expects a similar drop next quarter.
If the past is the best predictor of the future, we can expect prestige beauty to take a hit if the economy falters as it did in the 2008-2009 recession, when global sales of luxury goods fell 8%.
clean beauty
Since 2020, Ulta has made clean beauty a priority and continues to gain traction. Almost half, 290 brands of the more than 600 brands it sells, are certified under one of its Conscious Beauty pillars: clean ingredients, animal cruelty-free, vegan and sustainable packaging. It’s what more women want, as a company survey found that 65% of consumers believe the beauty category is significantly related to wellness.
Ulta’s clean ingredient brands are certified by ClearForMe, an independent authority on beauty product ingredients, and maintains a “Made Without” list to assure customers that it’s delivering clean products. To help customers find the clean beauty products that are right for them, Ulta just updated its Conscious Beauty home page on the website and added digital badges to all product pages.
It’s also partnered with specialty retailer Credo to bring a curated collection of what Credo calls its “best in cleaning” products to Ulta customers. Credo offers more than 130 brands and more than 2,000 products, in addition to providing beauty services in its ten stores.
While the use of the terms “clean” and “natural” in beauty products is not regulated, the size of the “natural and organic beauty” market, a useful indicator, is expected to grow globally from around $30K million in 2021 to $50.5 billion by 2027, a CAGR of 9.1% over the six-year period, according to Statista Research.
Ulta is also expanding its selection of “beauty from within” supplements, women’s personal care and everyday products. It now offers more than 140 brands and 700 SKUs in its wellness assortment, but some products are only available online.
your most beautiful self
The poet John Keats wrote, “Beauty is truth, truth is beauty,” but there is a lot of deception in the beauty business. Industry advertising relentlessly confronts women with images of perfect models and balanced features, the perfection of which is further enhanced through Photoshop.
Beauty may be in the eye of the beholder, but throughout its history, the industry has groomed women to see their imperfections rather than their beauty when they look in the mirror.
Recognizing the conflict between the insecurities that beauty advertising has imposed on women and the confidence that beauty brands should instill in women, Ulta is launching a new program called Beauty& to “expand the lens of beauty and inspire everyone to reclaim beauty on your own terms. ”
Beauty& will launch this week on Ulta’s first podcast, “The Beauty of.” Planned as a bi-weekly podcast, it promises to “go beyond traditional beauty topics and expand the beauty lens into unexpected spaces and places.”
It will also offer three limited-edition t-shirts ($25) decorated with messages of beauty positivity from author Meena Harris, niece of the Vice President: “Beauty Is Timeless, Boundless, Ageless, Limitless. Here, There, You & Me”, and artists Timothy Goodman and Emmy Star Brown.
The Beauty& program aims to celebrate beauty as a force for good. Karla Davis, Ulta’s vice president of marketing, explained in a statement:
“As an industry leader, we believe we have a responsibility to drive progress rooted in positivity, inclusion and celebration. Our comprehensive campaign reflects many ways to celebrate individuality, resilience, strength, and most of all, the beautiful possibilities that live within each of us.”
On the inclusion front, the company is expanding its range of BIPOC (Black, Indigenous and People of Color) offerings and launching the MUSE accelerator program to mentor eight early-stage BIPOC beauty entrepreneurs.
Positive beauty messages aside, Ulta is also donating $200,000 to the Jed Foundation, a nonprofit that supports teen and adult mental health.
These are all steps in the right direction, but it will take more to offset the nearly $8 billion the industry will spend on advertising globally this year, most of which subtly reinforces the message that she’s not up to the task. , unless you buy the advertised product.
Uniting mass and ‘class’
In what could be Ulta’s most far-reaching change is a plan to combine in-store displays of massive makeup and skincare brands with prestige. Since the company’s founding in 1990, mass and “class” beauty has been segregated. Mass brands were on one side of the store, prestige on the other, fragrance in the middle, and hair care in the back.
Coming soon to select Ulta stores will be a new design that fuses mass and prestige offerings to “better reflect how a guest actually shops with consolidated categories and intuitive adjacencies,” chief operating officer Kecia Steelman said on the earnings call. However, she emphasized that clear brand differentiation would be maintained.
While CEO Dave Kimball confirmed that the company has yet to see customers switch to less expensive brands, his positive experience putting Ulta stores in Target TGT stores gives him confidence that Target shoppers who like the discount they like to have massive beauty and prestige. options in close proximity.
Now in 186 Target locations after opening 59 new stores in the second quarter, Ulta has expanded its premium offerings to include Benefit (an LVMH brand), Tula and Morphe, a sign that Target shoppers are shopping, too.
That’s the key advantage of bundling massive, prestige deals. Give customers as many opportunities to switch up as you do to switch down. In these crazy times, Ulta is prepared for all contingencies.
going full speed
After CEO Mary Dillon left the company in March 2021 and then-president Dave Kimbell, who had been with the company since 2004, stepped into her shoes, questions remained as to whether Ulta would maintain its momentum. Those questions have been answered, especially after the most recent earnings call covering the second quarter through July 30.
For the first six months of the year, Ulta’s net sales increased 18.9% to $4.6 billion and net income increased 30.3% to $627.1 million. Its presence increased by 17 new stores, bringing the total number to 1,325 stores in operation.
And Placer.ai reports that Ulta’s foot traffic has topped 20% every month this year, except for March, when it was up nearly 16% compared to pre-pandemic 2019. And during April and July, visits exceeded 30%. increase.
Kimbell also reported that growth across all major product categories, as well as in-store and digital channels, “exceeded our expectations,” adding that NPD data found its share of the prestige beauty market is increasing.
“Consumer engagement with beauty remains strong, reflecting a deep emotional connection to the category, as well as the continued importance of personal care and wellness. This healthy engagement coupled with strong operational execution from our teams drove our results,” she said.
With that news, the company raised its outlook for revenue growth from 6% to 9% growth to 9.5% to 10.5%. It expects sales to hit between $9.65-$9.75 billion in fiscal 2022.
Given how well it has performed to date and its continued pivots toward cleaner, more inclusive and personalized beauty in a new shopping environment that makes it easier for customers to shift up or down as economic winds blow, Ulta is ready for a strong second half of 2022 and ready for an even better 2023.
Source: www.forbes.com