Ulta Beauty Shifting its Focus to Digital Advertising
The beauty brand reported e-commerce sales of $55.9 million in the fiscal second quarter of 2016, up 54.8% from $36.1 million in the same period last year. E-commerce accounted for 5.2% of sales during the quarter, compared to 4.1% last year. Through the first half of fiscal 2016, ended July 30, Ulta’s online sales were $116.9 million, up 45.9% from $80.1 million last year. E-commerce now accounts for 5.5% of overall sales, compared to 4.6% last year.
“Site traffic accounted for almost all of the growth, as we continue to invest in digital marketing,” CEO Mary Dillon told analysts on Ulta’s Q2 2016 earnings call, according to a transcript from Seeking Alpha. “We believe our evolving marketing strategy with a growing focus on multimedia advertising and digital marketing is working to raise our profile in consumer awareness and to better define our brand.” Dillon didn’t specify just how much traffic was up to Ulta’s site year-over-year.
Dillon told analysts the company has over 20.6 million members across its loyalty programs, something she views as key to Ulta’s continued growth. Online, the retailer will focus on generating more site content to engage shoppers.
“We continue to improve the guest experience at Ulta.com with more content for the beauty enthusiasts, and recently we launched a new feature called Ulta Beauty Mix with tips, articles and how-tos,” she said. “The content is shoppable and we view this as our first significant step toward merging content and commerce.”
The company also is making other improvements to its growing e-commerce business. Last month, Ulta opened a new distribution center in Dallas, which now fulfills about 30% of its online orders. Dallas is home to Ulta’s second fulfillment center designated for online orders. Ulta’s other new e-commerce fulfillment center is in Greenwood, Ind., and opened last year.
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