THE CLARUS Blog

Moving Forward: How Ulta Beauty Always Loves Its Customers Back – featuring Kelly Mahoney [Interview]

This interview is part of our Moving Forward Blog Series, where we ask major brands how they’re adapting to changing consumer expectations from a loyalty perspective post-pandemic.    

In March 2020 Ulta Beauty closed all its stores at the outset of the pandemic. The health and safety of its customers and associates embodied the brand’s top priority.  

As a brand that helps shape the global view of beauty, company officials knew it was critical to ensure Ulta Beauty remained relevant, especially with its deeply committed Ultamate Rewards members.  

One of the things Ulta Beauty did was to reinforce the importance of togetherness and self-care by highlighting empathy and joy found in everyday life.   

 As the pandemic continued, company officials remained rooted in human connections and authenticity to guide them.  

We caught up with Kelly Mahoney, Vice President, Customer Marketing, at Ulta Beauty, and here’s what she had to say about:  

  • Remaining approachable and relevant during uncertain times. 
  • The evolution of customers’ needs and Ulta Beauty’s ability to execute against them.
  • Shaping how the world sees and experiences beauty. 
  • Understanding how to strengthen loyalty and provide meaningful offers and content. 

 

Jim Tierney: Since the pandemic started in the U.S. 17 months ago, how has Ulta Beauty viewed customer loyalty and how has that approach been impacted by consumer behavioral change across the board?   

Kelly Mahoney: In March 2020, Ulta Beauty closed its entire fleet of stores in response to the rise of the pandemic.   

Keeping the health and safety of our guests and associates as our top priority, teams needed to accelerate work and further reimagine how beauty enthusiasts discover and find joy in their shopping experiences. 

Open quotesIt was critical to consider how to ensure the Ulta Beauty brand remained approachable and relevant during uncertain times, with a special concentration on authentic connections with our Ultamate Rewards members who drive at least 95% of our sales. – Kelly Mahoney, Ulta BeautyClose quotes

Data is at the heart of everything we do to cultivate loyalty – and in 2020, it truly served as our guide. While so much has changed, passion for the category never waned. Our job is to bring beauty to guests in innovative ways that inspire, excite, and engage – and we believe all these efforts promote long-term loyalty.

As we began to reopen stores with our Shop Safe Standards in place, we dedicated a full month to a first-ever WE LOVE OUR MEMBERS event. Our members who returned to shopping in stores were very purposeful in their visits and purchasing more each visit. We wanted to give them more and that’s why this time was dedicated to rewarding guests with member-only offers, exciting new ways to earn points, and surprise and delights moments to truly reinforce Ulta Beauty is where beauty loves you back.

 

Jim: What customer insights have you gleaned since the pandemic started?  

Kelly: The pandemic was a massive disruption to everyone across the country in different ways. For our business, we leaned into our foundational values in parallel with propelling innovation and hyper-relevance.   

Ulta Beauty is guest-centric first and foremost and to remain authentic, we had to take into consideration the clip at which things were rapidly changing for them. Among the many insights gleaned, the evolution of our guests’ values and needs and our ability to anticipate and deliver against them, is how we remain a preferred destination.   

We know:  

  • Health and safety are more important than ever before as our physical, mental, and even financial health was called into question. 
  • Omnichannel experiences and solutions are critical to keeping beauty top of mind. 
  • Connection is essential and, when forced to find new ways to connect, guests worked to maintain a sense of the community they crave. 
  • We must be practical, yet meaningful, in providing content that inspires, educates, or simplifies as balanced with rewards and value. 
  • Purpose matters. We must continue to act in ways that reflect our values of transparency, social responsibility, diversity, and inclusion. 

 

Jim: What strategies do you execute on to increase engagement and customer lifetime value throughout the year?  

Kelly: We believe we have the power to shape how the world sees and experiences beauty.   

Understanding the meaningful role beauty plays in our lives allows Ulta Beauty to influence people and culture as seen in our bold purpose: we exist to bring the possibilities to life through the power of beauty. This purpose is our north star – it unlocks the innate powers of beauty and sets parameters for our strategies to come to life, especially regarding member engagement.  

In 2020, we reacted with our purpose as a guide as we swiftly mobilized hyper-relevant communications. Strategically, we wanted to serve as a light during dark times and reinforce the importance of togetherness and self-care by highlighting empathy and the many ways to find joy in the “new normal” of everyday life. These efforts sparked significant engagement with the brand online.  

Open quotesThe WE LOVE OUR MEMBERS monthlong event welcomed members back to beauty with exclusives, surprise and delights, and point offers to re-engage with Ultamate Rewards.Close quotes

We revamped new member experiences by amplifying personalization and driving to the Ulta Beauty app – with a light on personalized recommendations and GLAMLab, an augmented reality experience to discover and virtually try-on products.

With the increased traffic to our web and mobile sites, we deployed new experiences to feature and promote new member signup online, focused on lapsed customers with personalized offers with recommendations to promote frequency.

 

Jim: Listening to your customers is a top priority. What are your biggest challenges now, and in the future, regarding customer loyalty and retention?

Kelly: The beauty and retail categories are highly competitive and to differentiate and remain competitive, we have always taken great pride in prioritizing listening to and understanding our guests’ wants, values, and needs.  

Open quotesOffering distinctive and competitively differentiating programs and experiences is critical and will remain that way well into the future. We will continue to place emphasis on innovating to offer greater convenience, simplicity, and opportunities to discover for beauty enthusiasts.Close quotes

This includes, but is certainly not limited to, newness and innovation from brands, free shipping, subscriptions, increased digital experiences, mobile payment, unique offers, and more.

 

Jim: Ulta Beauty has that all-important experiential element of loyalty. How has that, and will that, be used moving forward as part of your loyalty strategy?  

Kelly: As leaders who listen, we have always understood the value of loyalty – beyond brand love, our industry-leading program provides us insights to our members across categories, trends, and direct feedback relevant to culture at large.  

As routines, purchasing habits, and lifestyles shift, it’s crucial to understand how we can strengthen loyalty and provide meaningful offers and content. We work to adapt and remain as authentic and engaging as possible.   

Ulta Beauty has set the standard of best-in-class loyalty programs and our goal is to continue sharing joy and more beauty. The transactional value Ultamate Rewards offers every guest is incredible with flexibility to redeem on any product or service without limitations, layers of distinctive, meaningful experiences and exclusive access to products, gifts, and helpful content.    

This is a critical component of our loyalty strategy that we will continue to evolve.  

 

Jim: Do you think this behavioral change among consumers is permanent?  

Kelly: We believe our guests are always shifting and we work to remain in lockstep, if not ahead of their wants, values and needs. We know guests will continue to crave convenient and seamless ways to engage. And as leaders, we will continue to innovate to meet them where they are.   

As guests’ expectations continue to evolve across physical and digital, our approach to winning will remain rooted in human connection, hyper-relevance, and strong digital capabilities. This trifecta makes each experience unique to Ulta Beauty AND unique to our guests. 

 

Jim: As Ulta slowly emerges from the pandemic, what are your customer loyalty goals?  

Kelly: As the nation’s leading beauty retailer, our strategies, culture, and continuous innovation reinforced our strength throughout a challenging year – and they continue to sustain our momentum.  

We emerged from 2020 as a leader and believe that is a testament to the choices we made throughout the year and to our history as a vibrant company and successful category disruptor. Ulta Beauty will remain nimble and actively listen to our loyalty members with the goals to:  

  • Attract new members to keep growing and leading the industry. 
  • Re-engage current members to deepen our relationships and meet their beauty needs. 
  • Deepen share with our current members. 

 We strive to always be the preferred destination where beauty loves you back.  

 

We Love Our Members 

Ulta Beauty’s first-ever “We Love Our Members” event says a lot about the brand and speaks to how companies found success during the pandemic. By remaining authentic, empathetic, and appreciative of their customers. 

Ulta Beauty never wavered in its commitment to its members and created deeper loyalty among existing customers and new ones. 

Innovation has always been a priority at Ulta Beauty and that continued during the pandemic. Company officials, among other things, plan to pursue things like subscriptions, free shipping, increased digital experiences, and more surprise and delights for members. 

Being the beauty destination that loves customers back is vitally important to Ulta Beauty, and that’s what it has done incredibly well during uncertain times. 

 

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