Ulta differs from traditional big box retailers and is defined by many as a “supermarket of beauty supplies.”  Ulta was founded in 1990 to meet the needs of consumers as a one-stop shop for prestige beauty products as well as basic beauty products, in addition to hair care and styling needs.  Ulta favors strip center locations in high traffic areas.  Ulta customers appreciate the convenience of the locations and don’t want to trudge through an indoor mall to reach the retailer.  Once in an Ulta customers can browse the 10,000 square foot facility for all of her cosmetic, fragrance, and hair care needs.

Ulta stores have in-house salons that give them a competitive advantage and differentiate them from competitor Sephora.  Also, these salons generate repeat purchases and cultivate loyal customers.   In addition, this allows Ulta to have access to high-end hair care products that might otherwise only be distributed through salons.   Ulta engages customers using an “open sell” environment where customers can sample products rather than waiting on a salesperson to get the products out of a case.

Ulta is growing rapidly with more than 600 stores in the United States currently with plans to double that number in the next few years.

Discussion Questions:

1. What is Ulta’s retail format?

2. What are its bases for sustainable competitive advantage?

 

SOURCE: Morey Stettner, Investor’s Business Daily, October 4, 2013