Ulta 2015 Annual Report Download - page 9

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advisors provide unbiased and customized advice tailored to our guests’ needs. Our customer service strategy,
convenient locations, attractive store design and compelling e-commerce offerings combine to create a unique
shopping experience.
Loyal and active customer base. Over 18 million Ulta Beauty guests are active members of our Ultamate
Rewards loyalty program. We use this valuable proprietary database to drive traffic, better understand our guests’
purchasing patterns and support new store site selection. We regularly employ a broad range of media, including
digital, catalogs and newspaper inserts and targeted promotions driven by our CRM platform, to drive traffic to
our stores and website.
Strong vendor partnerships across product categories. We have strong, active relationships with over 350
vendor partners, including Bare Minerals, Coty, Estée Lauder Companies, L’Oréal and Procter & Gamble. We
believe that the scope of these long-term relationships, which span the three beauty categories of prestige, mass
and salon creates an impediment for other retailers to replicate our model. We work closely with our vendor
partners to market both new and existing brands in a collaborative manner.
Experienced management team.We have an experienced senior management team that brings a creative
merchandising approach and a disciplined operating philosophy to our business. We continue to expand the depth
of our management team at all levels and in all functional areas to support our growth.
Six strategic imperatives
We are committed to the following six strategic imperatives to drive sustainable long-term growth:
Acquire new guests and deepen loyalty with existing guests. We believe there is an opportunity to use
consumer insights and effective marketing tactics to acquire new guests and increase our “share of wallet” of
existing guests. We have sharpened our brand positioning, and are increasing awareness of the Ulta Beauty brand
by communicating our brand differentiation through broad scale advertising. We continue to leverage our direct
mail advertising, catalogs and newspaper inserts to communicate with our guests. We are also deploying
additional marketing tactics, such as digital, in-store events and public relations to drive brand engagement,
deepen the guest connection to Ulta Beauty and strengthen our authority in the beauty category. In addition, we
plan to grow and further leverage our loyalty program and CRM platform. We have over 18 million active Ulta
Beauty guests enrolled in our Ultamate Rewards loyalty program. Loyalty member transactions represent more
than 80% of our annual total net sales, and the transaction data demonstrates that loyalty members shop with
higher frequency and spend more per visit as compared to non-members. The customer data captured by our
loyalty program, together with our CRM platform, enable customer segmentation and targeted marketing
communications tailored to our guests’ unique beauty needs. We believe our loyalty program, combined with our
growing CRM capabilities, provide a significant long-term competitive advantage for Ulta Beauty.
Differentiate by delivering a distinctive and personalized guest experience across all channels. The Ulta
Beauty guest experience today is differentiated by our broad array of categories, brands and price points, high
quality services and friendly and helpful associates. Our opportunity is to sharpen that experience, by making it
more relevant, differentiated and personalized in-store and online. Our store associates are the key to delivering a
distinctive guest experience that is personal, informative and fun. We continue to invest in labor and technology
to enable this experience. For example, we are testing in-store technology solutions like clienteling and have
rolled out task management tools. At the same time, we are improving our e-commerce guest experience to
ensure it is easy and informative with content that inspires, educates and enables sharing and social engagement.
Through our loyalty and CRM capabilities, we are gaining efficiencies in our marketing by targeting
communications and promotions to be more personalized and relevant to our guests.
Offer relevant, innovative and often exclusive products that excite our guests. Our strategy is to continue to
partner with existing and new key vendor partners to bring new and exclusive products to delight our guests and
to introduce new brands both in-store and online. We regularly add new brands across product categories,
especially in prestige cosmetics, currently the beauty industry’s highest growth category. We continue to increase
the presence of prestige brands and boutiques in our stores. We are also refining and growing the Ulta Beauty
Collection, our private label products. Our private label strategy could include partnerships or acquisitions to
create more exclusive brands for Ulta Beauty in the future.
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