Ulta Beauty Sees a 62.9% Increase in Ecommerce Sales in Q3

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Ulta Beauty saw its ecommerce sales increase by 62.9% in the third quarter, representing nearly 9% of the company’s total revenue.

Mary Dillon, CEO of Ulta Beauty, attributed the growth to the enhancement of the company’s assortment, site experience and delivery capabilities.

“Ecommerce sales were driven by transaction growth, total traffic growth was up 57% and mobile traffic grew 92% driven by investments in digital marketing,” Dillon told investors on an earnings call. “We relaunched our mobile site during the quarter, improving the guest experience with the redesign of the shopping card in checkout experiences.”

Dillon said Ulta also improved the credit card application experience, giving customers the ability to apply and buy in one transaction, which has more than doubled the number of credit card account sign-ups online.

“We also gave the Ulta Beauty app a mini-makeover, adding features like the ability to buy email gift cards from your phone, easier use of features like checking your ultimate rewards account and point balance and improving our try-on app, GLAMlab,” Dillon said.

She said another feature of the app enables push notifications about the latest promotions and exclusive product launches, and voice searches for products. Ulta’s mobile app traffic more than tripled during the quarter.

Dillon said Ulta continues to build its online assortment with more online-only brands like Lime Crime, one of the first digitally native beauty brands, Little Barn Apothecary bath products, the exclusive Persona Identity Palette created by YouTube influencer Simply Son and Milani makeup and primers.  Online-only brands accounted for a significant portion of the ecommerce growth in the quarter.

“Ulta.com also delivered excellent results with our signature promotions like 21 Days of Beauty, The Gorgeous Hair Event, as well as online-only promotions, including platinum Perks, Beauty Sample Bag of purchase and limited-time Beauty Breaks,” Dillon said.

In August, the company went shoppable on Instagram and has seen growing interest and engagement in the platform.

During the second quarter, Ulta piloted store-to-door tests out of 40 physical locations, enabling customers to place ulta.com orders in store and have them delivered to their homes. The program was a success and is now rolled out chain-wide.

“While this initiative is still fairly small in terms of demand, it’s proving quite useful and is satisfying guests looking for hot brands that are not available in every store, such as MAC or Morphe,” Dillon said.

Omnichannel in general has proven a winner for Ulta, with the number of cross-channel shoppers continuing to increase. Customers purchasing both in store and online represent 9.1% of its loyalty members, up from 7.5% a year ago, spending an eye-popping 21.7 times more than retail-only customers, including twice as much in store.

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