Turns out nice guys do finish first.
Dave Kimbell, universally acknowledged to be one of the most affable executives in beauty, is now also one of the most powerful.
He succeeds Mary Dillon, whom he worked closely with for the last seven years, most recently as president, as she led the 31-year-old business through a period of explosive growth.
As he looks to maintain that momentum during one of the most disruptive periods in business history, Kimbell is harnessing his famed power of positivity to create a vision for the future that consumers and company employees alike can rally behind.
“One of Dave’s greatest qualities is he is an optimist,” said Dillon, who is now the executive chair of the Bolingbrook, Ill.-based retailer. “His belief in the beauty category is infectious. He is an empathetic leader who understands how to think through the lenses of guests and associates.
“Dave is enthusiastic and creative, so it’s easy for him to project the needs and aspirations of the guest,” Dillon continued. “You wouldn’t think of him as a beauty enthusiast, but he thinks and acts that way.”
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It’s true that Kimbell’s face lights up when he talks about the business, and that the words “joy,” “happiness,” “delight” and “engage” are constant refrains in his conversation. For Kimbell, they’re not just feelings — they’re business goals, the key to attracting a consumer base rocked by the pandemic and inspired by the new social justice movement.
“Human experience has always been part of the beauty category,” said Kimbell, “but because of the forced separation we went through, there’s a renewed understanding of the importance of human connection, and specifically, within beauty, the desire to express yourself in ways that are reflective of who you are and how you want to show up in the world.
“As I think about driving engagement more broadly, it’s just this simple idea of joy,” he continued. “The world is still disrupted in so many ways. And there are challenges that we face as a society. Beauty is a great place to have simple moments of joy and pleasure and the opportunity to step away from some of those challenges. We saw through the pandemic, that even if there weren’t makeup-wearing occasions, beauty was a great place for enthusiasts to just play and have fun.”
Industry analysts say that that purposeful vision of beauty makes Kimbell well-suited to lead Ulta in the next phase of its development. Under Dillon, who joined Ulta Beauty in 2013, the company exploded. Sales tripled, from $2.67 billion in 2013 to $7.39 billion for 2019, with the store count doubling to more than 1,200.
During that time, Ulta solidified the depth of its assortment across prestige, professional and mass beauty, amassing a lineup that features more than 600 brands and 25,000 products, and built a robust loyalty program that now numbers more than 32 million people.
But the landscape today is vastly different. The overall beauty category in the U.S. has slowed, particularly the color cosmetics category, which had started to soften even before the pandemic. Ulta put its plans to expand into Canada on hold, and also significantly decelerated the pace of new store openings, with 41 openings planned for this year.
At the same time, though, the competition is intensifying. This month, Ulta unveiled its much-anticipated shop-in-shop in Target, while archrival Sephora moved into Ulta’s backyard — literally — as it gets set to open 800-plus shops-in-shop in Kohl’s. Then there are retailers like Bath and Body Works, which is increasingly building out its retail footprint in strip malls, as well.
“This is the real test,” said Jefferies analyst Stephanie Wissink, noting that there will be overlaps between Kohl’s and Ulta in about 75 percent of Ulta’s locations. “In a period when you don’t have the same level of energy in the beauty industry from a newness factor, can Ulta self-create the rationale for consumers to engage in the category and drive the business?”
Wissink thinks the answer is yes, noting Kimbell’s marketing background (he got his start at Procter & Gamble and has also held leadership positions at PepsiCo, Seventh Generation and U.S. Cellular) should enable him to tap into the consumer understanding necessary to differentiate Ulta from its competitors.
“He is the right person at the right time,” said Wissink. “When there is instability in the backdrop, organizations look for voices of comfort and calm and collectiveness, and he has always been that.
“His skill set is getting into the DNA of a brand, understanding the consumer and the typography of the categories Ulta competes in and where they can be successful,” Wissink continued. “In a much more managed and controlled growth period, this is where you harvest the long-standing equity you have built with customers and vendors and partners.”
Indeed, Kimbell is laser focused on building on that equity by doubling down on Ulta’s purpose driven mission of “using the power of beauty to bring to life the possibilities that lie within each of us.”
For him, success will be contingent on staying “hyper-connected to our guests and associates to ensure that we are understanding what’s motivating and driving their behavior, both within beauty but more importantly in the world around them.”
“What has always impressed me is his forward-looking nature — not where beauty is now, but where it’s going and where it should be,” said Tarang Amin, the CEO of E.l.f. Beauty. “He has great listening skills and comprehension, and is always turning back to what they’re seeing and where it’s going next. That inquisitiveness and natural curiosity have served him well.”
No surprise, then, that the very first time he saw chief operating officer Kecia Steelman after lockdown wasn’t in an office, but in a distribution center. “He wanted to make sure everyone knew — the front-line associates and the distribution teams who never stopped working — that we can’t thank them enough,” said Steelman. “One of the things we pride ourselves on is the human connection and the knowledgeable associates we have in store. The guest loves that human interaction.”
By all accounts, so does Kimbell. Those who have been with him on such trips note that he relishes being in the store environment, and since becoming CEO, he’s visited everywhere from Arlington, Va., to Jacksonville, Fla., to Sheboygan Falls, Wisc. (often posting pictures of himself with store associates on the @ultabeauty_ceo Instagram account.)
He often spends “hours” on such visits, said Shelley Haus, chief marketing officer and a frequent companion, “asking questions to associates to really understand the ins and outs of what they go through and the consumer mindset.
“Dave is inquisitive and curious,” continued Haus, who has worked with the executive in various roles for 15 years. “His ability to be consumer-centric, insight-driven and empathetic — putting himself in the shoes of whatever consumer he is focused on at the time — makes him able to adapt and understand the consumer mindset, even if he isn’t the target.”
He also loves interacting with the associates. “On the best day, operating a store is complex, then throw in a pandemic on top of that,” Kimbell said, “so I like to go and thank the associates for everything they’re doing.”
These information-gathering missions spark Kimbell’s creativity. “I get our best ideas about all aspects of our business from being in stores,” he said, “from what brands we should carry, experiences we should implement, operational effectiveness and efficiencies we should tackle next.”
Brands say the method works. “Dave has great insights into the retail and beauty industry, and he knows how to turn those into consumer opportunities,” said Chris Good, group president, North America, of the Estée Lauder Cos. Inc. “He brings a really good balance of passion, pragmatism and values in terms of how he approaches decisions and partnerships.”
Kimbell joined Ulta almost eight years ago as chief marketing officer. He added merchandising responsibilities a year later, and was named president in 2019. Those who work closely with him believe that broad base of exposure will be integral to his success as CEO. “He has been overseeing strategy across the enterprise and has a good purview across marketing, digital and merchandising, really working closely with us in terms of where we want to take our areas strategically,” said Monica Arnaudo, chief merchandising officer. “He’s able to connect the dots and bring that through the rest of the organization to make sure that we can handle it operationally and that we are always looking at the guest at the center of everything.”
As the business moves forward, there are three key priorities. One is an increased focus on what the wellness category looks like for Ulta, or what Kimbell calls “self-care through a lens of expression.”
In May, Ulta launched the Wellness Shop, consisting of about 8 feet on the wall in roughly 400 stores, with the tag line, “self-care for the mind, body and spirit.”
Ulta has divided the assortment into five key segments: Down-There Care, Supplements and Ingestibles, Everyday Care, Relax and Renew and Spa at Home. “We’re building it out from an assortment perspective and showcasing it more from in-store to digital to social,” said Arnaudo, who noted that 65 percent of Ulta’s customers connect beauty and wellness. “We’ll lean in and see where we are getting traction and evolve from there.”
Bringing in more brands founded by people of color is another key focus. In February, the retailer named Tracee Ellis Ross diversity and inclusion adviser and in June, it joined the 15 Percent Pledge.
“There has to be a clear intention to be anti-racist, to break down and dismantle areas that systemic racism and economic opportunity has locked out and not celebrated Black and brown people,” Ross said. “Ulta has the opportunity to set the tone of what can come next for organizations across the country, beyond beauty and retail.”
Ross outlined the three key areas in which impactful change is called for. “Create a real pipeline for untapped talent to enter and grow in Ulta; establish best practices for incubating and supporting new brands that reflect the diversity of our society,” she said, “and be active in their pursuit of diversity, equity and inclusion everywhere they spend money, including legal counsel, PR, marketing, creatives and consultants.”
Ross has worked with Kimbell since the early days of incepting her brand, Pattern Beauty, describing him as someone who is “available, authentic and open to feedback.”
“He is very intentional about creating pathways for change,” she said.
Ulta is on track to double its assortment of Black-founded brands by the end of the year, said Arnaudo, which will equal about 5 percent of the total assortment. Kimbell acknowledges there is work to be done. “We’re not where we need to be from an inclusivity and overall acceptance standpoint, and while we’re making progress, there’s hard work ahead of us,” he said. “We’re going to do everything in our power within Ulta to create an environment where everyone thrives and is as representative, inclusive and diverse as possible, but also use our voice and our scale and our cultural influence to help drive change in the world around us.”
Between its fleet of 1,290 stores and counting and its loyalty program of 32 million-plus, Ulta already has significant scale. In September, it looks to expand its reach even further, when Ulta Beauty at Target launches in more than 100 locations with an assortment of more than 50 prestige brands. The concept is expected to hit 800 Target stores in the coming years, and purchases will be eligible for both retailers’ loyalty programs.
If all goes as planned, Target will serve as a gateway to introduce a new consumer to Ulta Beauty and to many of the prestige brands that are sold there. Rather than launch with a full lineup of each brand, the mix will be highly curated, versus Sephora, which is introducing about 125 brands at Kohl’s, most in their entirety.
“What we’re doing at Target is breakthrough and disruptive and very unique. It’s not a replica of what’s happening anywhere else in the industry,” said Kimbell. “It’s not just lifting an experience and putting it in Target. We purposely built an experience that is designed to allow our brand partners to bring their stories to life in a distinctive and elevated experience.”
The stakes are high. Ulta execs say that nearly 30 million people visit Target every week, and that there is very little crossover between the core Ulta shopper and that consumer. “To introduce a whole new set of consumers to these brands will serve the brands very well,” said Kimbell. “It is a highly curated, best-of-the-best experience purposely built to drive consumer acquisition for our brands, new guests into Ulta and new experiences and guests into Target.”
For Ulta, Wissink said, success will depend on driving shoppers to its own doors — online or off — rather than brand websites. While it remains to be seen if that will be the outcome, one thing is certain: Ulta has been aggressively working to upgrade its omnichannel experience over the last several years to better compete against Sephora, which had online sales of $3 billion in North America last year.
Ulta doesn’t break out sales figures, but Kimbell said online sales doubled last year. Sources report that e-commerce was 15 percent of Ulta’s sales in 2019, a figure that increased to one-third of overall sales, or roughly $2 billion, in 2020. Like other retailers, Ulta moved quickly to compensate for store closures last year, accelerating programs like buy online, pick up in store, and also heavily investing in its app.
“A key priority is to get ahead of and create the future,” said Prama Bhatt, chief digital officer. “We invested in digital innovation and key capabilities where we can differentiate. We believe strongly in leveraging data for deep insights and building out capabilities where we can be much more personalized.
The company has enormous amounts of data — 95 percent of the transactions of those 23 million loyalty club members are tracked — and increasingly the means to use it. In 2018, it acquired QM Scientific and GlamSt, technology start-ups related to artificial intelligence and augmented reality, meant to support personalization initiatives.
“We spent three years building out our personalization foundation, and even in 2020, using the year to build the infrastructure and the modeling,” said Haus. “Now we’re in the mode of being able to personalize content at scale.”
“Personalization is not about everything being personalized — it is about being appropriate,” added Bhatt. “When is the right time for us to offer something relevant for you and when is the right time to discover something on your own?”
Kimbell’s goal is to humanize digital and create an immersive experience that is seamless across channels. “When a guest starts to shop our e-commerce business in addition to our stores, their total engagement increases very significantly — the spend is almost two-and-a-half times and their trips to stores actually increase once they start shopping online,” he said. “We see a very bright future for our stores and our omnichannel experience, the way our guests are seamlessly flowing between them.”
Kimbell is well aware that the eyes of the industry are on him as he guides Ulta into the future, but as for him — he remains completely focused on the consumer.
“We’ve done a ton of research to understand where consumers are heading and we’re confident in our ability to continue to strengthen what’s been working with our business,” he said. “But we also have some cool ideas to think differently about what the industry will look like and how retail is going to evolve.
“There was a lot of disruption in the last decade and we went from being a business that was doing some cool things to being the definitive leader in beauty,” Kimbell said. “And now it’s about defining the decade ahead.”