Walgreens, Ulta executives talk beauty strategy

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NEW YORK — Expanding customer loyalty to build beauty transactions is a goal for both Walgreen Co. and Ulta, according to executives for the retailers who spoke recently at Cosmetic Executive Women Newsmaker Forum.

Ulta chief executive officer Mary Dillon joined Sona Chawla, Walgreens’ president of digital and chief marketing officer, for a discussion moderated by Allure magazine editor in chief Linda Wells. The interest in what the two had to say was evident by the sold-out crowd at New York’s Harmonie Club.

Walgreens, according to Chawla, continues to push its triple-threat strategy of engaging customers in the more than 8,000 brick-and-mortar stores, but also via its e-commerce site, Walgreens.com, as well as on drugstore.com.

“Those who cross channels spend more. The more channels, the better engaged,” said Chawla, who added that Walgreens is “going big” in beauty.

Specifically, Walgreens has 26,000 beauty advisors in stores and growing availability of Boots No7 (and other Boots properties) bundled with such high-end beauty products as philosophy on its skinstore.com website. Chawla said Walgreens is “gifted” in its locations as well as benefitting from its other shopping platforms. This portfolio, including the Boots merger, has built Walgreens into the third-largest beauty retailer in the country.

“We try to take the friction out of the process,” Chawla explained in support of the omnichannel strategy. “We don’t do digital just to be cool. Everything we do is about being customer-centric,” she said.

Giving consumers what they want is also behind Walgreens’ early acceptance of Apple Pay, which she noted has been growing in usage in just two short weeks.

Digital drives Walgreens’ efforts, but it is addressed in a somewhat different way at Ulta. The store experience trumps all at Ulta, according to Dillon. “Our associates just love to wow guests. You can come in and get a full beauty spa day or just come in and get what you want at multiple price points.”

She is looking at technology, however, to free up time so associates can be more available — for example, using iPads in-store. The store environment can’t be duplicated online, she added, “unless drones can start coming to your house do to your [eye]brows.”

Ulta is, however, adding shoppable videos online and live interactive chats with brands (such as one recently done with Tarte). She doesn’t see total Ulta sales exceeding 10% of the company’s business in the next five years. She is interested in vendor content to help educate Ulta shoppers, many of whom study products online before coming into the store.

Statistics from IRI confirmed that 35% of consumers research on the Internet before they buy.

Ulta continues to offer a unique proposition in the market — a beauty playground with mass, class, professional products and salon services. “No one else offers what we do in one place,” Dillon added.

Ahead for the 775-store Ulta, which will hit 25 years of age next year, is getting those who haven’t shopped its stores familiar with the company. Beyond social media, the company is studying such options as national traditional advertising. That’s all part of Ulta’s goal, as presented by Dillon, of doubling its share of the $113 billion beauty business within the next five years.

“We feel confident we can do that. We are adding 100 stores a year, across most of the United States, and we just opened two in Alaska — I bet you all want to go there right now,” she joked on a night when New York’s temperatures dipped into the teens.


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