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Ulta Beauty Doesn’t Care About Overtaking Sephora

The company is focused on building more stores that sell mass and prestige products, as well as provide services.

Ulta Beauty is not on a mission to overtake Sephora, chief executive officer Mary Dillon has made clear.

“The beauty category is big and growing in the U.S., and honestly, there is room for a lot of players who are playing it smart,” Dillon said at the WWD Beauty Summit, responding to a survey about when the beauty chain would overtake Sephora.

“The overtaking thing isn’t really the way I think about it,” Dillon said. “We’re never going to be all just about prestige, we’re going to be prestige and mass and services and hair, and there’s an opportunity for all boats to rise….It’s not like we don’t look at them as a really hearty competitor, but that’s not really my goal.”

Dillon hit on some of the trends bolstering Ulta’s fizzy sales, including the proliferation of the beauty enthusiast — a type of customer that cannot have enough lipstick and makes up about 57 percent of all beauty shoppers.

“There’s truly a multiplication of trends that are all happening at once,” Dillon said. There’s a heightened demand for immediacy and personalization brought on by Amazon, she noted, even though just a few years ago customers would have questioned the level of data harvesting required for those services. Dillon suggested using consumer insight and foresight to drive business strategies.

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Experiences also matter more than ever before — especially in an age with so much technology, Dillon said. “Digital is certainly surrounding everything in the world…it’s the center of every experience that we have,” she said.

“The focus on experiences…I think is really the big a-ha, and possibly the real opportunity for all of us,” Dillon said. Ulta offers salon services in all of its locations, and its salon business has posted year-over-year increases. Ulta is adding more makeup services with its launch of MAC Cosmetics into doors. “We’re going to really raise our game in makeup artistry,” Dillon asserted.

“There is a need for human experiences that are physical in nature as well,” Dillon said. “For retailers who understand how to maximize [that]…it’s really a sweet spot that can help accelerate growth.”

That’s a reason brick-and-mortar remains important, Dillon noted, sharing an anecdote from her Starbucks board experience, that people still go into those stores because of the human element. Ulta has plans to open about 100 store locations per year until it reaches the 1,400 to 1,700 range, she reiterated.

“We’re confident in that because of the experiential nature,” Dillon said.