Ulta Beauty has delivered exceptional results with its Ulta Beauty Rewards program. This innovative loyalty program has played a significant role in the company’s success, demonstrating the power of best-practice loyalty strategies in the beauty industry.
Ulta Beauty Rewards offers a range of benefits that keep members coming back to Ulta Beauty. From points-based purchases to exclusive offers and personalized recommendations, the program has been cleverly evolved to meet changing member needs and maintain talkability.
Most interestingly, Ulta Beauty has used the loyalty program as a catalyst to deliver a company-wide digital transformation culminating in data-driven omnichannel personalization, enabling them to significantly boost member engagement while outplaying competitors.
Ulta Beauty’s loyalty strategy approach provides a valuable case study for marketing professionals, loyalty consultants and loyalty program operators.
Key features of Ulta Beauty Rewards
Ulta Beauty Rewards offers a tiered structure with three levels: Member, Platinum, and Diamond.
Members earn points on every purchase, with higher tiers provided with points multipliers to earn more points per dollar spent [1].
Exclusive benefits include birthday gifts, bonus points, and early access to deals [2]. Diamond members enjoy free shipping on orders over $25, plus a $25 service reward [2].
GlamXplorer, a recent gamified experience, invites members to complete quests and earn Stars which unlock perks and benefits such as gift cards, discounts, free products and more [3].
The Ulta Beauty app enhances the shopping experience with features like GLAMlab for virtual try-ons and instant gift card sending [4].
Ulta Beauty has invested in a modern technology stack to deliver omnichannel personalization, enabling them to automate customer journeys and deliver tailored offers, a core strategy to boost member engagement [5].
The power of Ulta Beauty’s loyalty program
Ulta Beauty Rewards has proven to be a powerful driver of the company’s success. With over 42 million active members [6], the program has experienced significant membership growth since its launch in 2014. The program’s impact on sales is substantial, with loyalty members accounting for an astonishing 95% of Ulta’s sales [7]. This high sales penetration demonstrates the program’s effectiveness in driving customer engagement and repeat purchase behaviour.
Ulta Beauty Rewards has also contributed to average order value growth. Diamond and Platinum members, who make up 45% of total loyalty sales, spend an average of $1,700 per person annually [8]. This increased spending has been driven by greater shopper frequency and higher average order values [9].
Customer engagement is further enhanced through the program’s tiered structure, offering exclusive benefits and personalized experiences. The Ulta Beauty credit card serves as an accelerator for the loyalty program, allowing members to earn additional points on purchases [10].
The program’s success in customer retention is evident from its healthy retention rates, especially among Diamond and Platinum members [11]. This loyalty translates into significant revenue benefits for Ulta Beauty, as loyal customers tend to have a higher customer lifetime value. In fact, customers with an emotional connection to a brand have a 306% higher CLV [12], highlighting the program’s impact on long-term customer relationships.
The evolution of Ulta Beauty Rewards
2024 relaunch
Ulta Beauty rebranded and relaunched the program at the beginning of 2024. The revamped program introduced enhanced benefits, including a new birthday gift experience allowing members to select from a portfolio of brands [9] . Ulta Beauty also increased program awareness through in-store, online, and social media initiatives [13].
Ulta Beauty is committed to continually innovating and evolving the program to ensure member needs are met, but also to keep it fresh, stimulating and worth talking about.
Future plans
Ulta Beauty aims to foster deeper connections with current members and attract new loyalists through its updated program [14]. The company continues to innovate, focusing on reflecting the evolving needs of beauty enthusiasts [13] .
With its strong foundation and ongoing enhancements, Ulta Beauty Rewards is poised to maintain its position as a key driver of the company’s success in the competitive beauty retail landscape.
Leveraging data for program optimization
Ulta Beauty’s Ulta Beauty Rewards program leverages data-driven analytics to enhance customer experiences and drive sales.
Customer insights
Ulta Beauty employs SKU data to understand consumer purchasing patterns, frequencies, and basket sizes [7]. This transactional data helps drive membership growth and key performance indicators. The company also analyzes program engagement data to continually innovate and evolve its offerings [7].
Predictive analytics
Ulta Beauty has automated customer journeys and improved personalization via the right choice in technology [16].
Their tech stack enables the creation of unique segments and the application of AI and machine learning techniques for journey optimization, a core expectation for modern consumers engaging with their favourite brands [17].
Targeted marketing
Ulta Beauty utilizes five API data sources to synchronize information and target customers based on their shopping behaviors [15]. This approach has resulted in a 316% increase in email click-through rates and a 34% lift in conversion rates [15].
Conclusion
Ulta Beauty Rewards program is a remarkable case study for a successful loyalty strategy in the beauty retail sector. Using the loyalty program as a catalyst for a full digital transformation of the business culminating in the execution of omnichannel personalization should act as an inspiration for loyalty program operators everywhere. Most importantly, the program has delivered a significant impact on the company’s bottom line. Its tiered structure, personalized experiences, and data-driven approach have created a loyal customer base that spends more and shops more frequently.
Looking ahead, Ulta Beauty appears committed to continuing the evolution of the loyalty program to maintain member engagement. The rebranding to Ulta Beauty Rewards and the introduction of enhanced benefits show the company’s commitment to innovation. As the beauty retail landscape becomes more competitive, Ulta’s loyalty program will likely remain a key differentiator, driving customer engagement and fostering long-term relationships that contribute to the company’s ongoing success.
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References
[1] – https://appstle.com/blog/ulta-beauty-rewards-program/
[2] – https://www.ebbo.com/insights/blog/best-tiered-loyalty-program-examples/
[3] – https://www.ulta.com/innovation/glamXplorer/
[4] – https://www.ulta.com/discover/beauty-reads/advice/ulta-beauty-app-tips-tricks
[5] – https://chainstoreage.com/ulta-beauty-automates-omnichannel-personalization
[6] – https://www.emiliaandrews.com/blog/loyalty-program-ulta-beauty-to-revitalize
[7] – https://www.pymnts.com/news/loyalty-and-rewards-news/2023/pymnts-summer-loyalty-series-95-of-ulta-beauty-sales-driven-by-loyalty-members/
[8] – https://www.gameball.co/blog/inspiring-ideas-from-ulta-rewards-program
[9] – https://www.retaildive.com/news/ulta-beauty-expand-refresh-loyalty-program-rewards/703221/
[10] – https://www.ulta.com/rewards/credit-card
[11] – https://www.digitalcommerce360.com/2022/08/29/bopis-accounts-for-a-quarter-of-ulta-ecommerce-sales/
[12] – https://www.moengage.com/blog/increasing-customer-lifetime-value-with-loyalty-programs/
[13] – https://cew.org/beauty_news/ulta-beauty-revamps-loyalty-program/
[14] – https://www.linkedin.com/pulse/ulta-beauty-coming-up-new-loyalty-maharshi-pancholi-cvhef
[15] – https://beautymatter.com/articles/ulta-beauty-pushes-sales-potential-through-personalization
[16] – https://retail-today.com/ulta-beauty-creates-personalized-customer-journeys-thanks-to-cloud-analytics-deeper-customer-insights/
[17] – https://www.sas.com/da_dk/customers/ulta-beauty.html
[18] – https://loyaltylion.com/blog/the-5-best-beauty-loyalty-programs-and-why-theyre-so-effective
[19] – https://letstalkloyalty.com/Ulta Beauty-rewards-from-ulta-beauty-a-key-differentiator-in-a-competitive-sector
[20] – https://www.yotpo.com/blog/loyalty-program-benchmarks-report/
[21] – https://antavo.com/blog/beauty-loyalty-programs/
