What the Beauty Industry Can Teach the Home Goods Industry

Beauty retailers like Ulta have prospered, despite facing competition from digitally-native brands and the changing way consumers buy goods. Here's what the home goods industry can take away from the beauty industry's successes.

Alison Martin
03/15/2019
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Lip sticks and nail polish brushes on white background

If there's one company thriving in this retail environment, it's beauty and personal care retailer Ulta. The company reported a strong fourth quarter yesterday, and it's one of the few companies that plans on opening more store in 2019, according to Retail Dive.

Fundamentally, the home goods and beauty industries serve very different products to consumers. Furniture and lighting are usually purchased once every few years while beauty buys likely happen at least once a month — maybe more.

However, the beauty and home goods industries do have something in common: Both service consumers that want to see at least some of the products first in-store before buying. Be it a lipstick color or a sofa, consumers want to make sure the product will fit before committing.

There's a lot to learn from Ulta's success, and furniture and lighting retailers should be taking notes. Here are a few highlights from Ulta's success and how retailers can adopt those strategies.

Meet consumers wherever they are

Ulta buyers don't have to make the trek to a store to get products. They can order on the website or the app or order online and pick up in store. Pretty much whatever the consumer wants, Ulta is ready to meet them.

But this means more than just having a website and a phone number to your store. It means that all of your platforms — your website, store, email, social media profiles — talk to each other. If someone messages you on Facebook or emails your store with a question, then you need someone responding within 24 hours. It should feel seamless, going from online to in-store, and all employees should be familiar with what's on the website and how it all functions. 

And know this: You don't have to sell online. You should, however, have detailed product pages, which need to have detailed product descriptions as well as plenty of photographs. If you don't sell online, then the website's main function is to drive traffic to your store. A customer who saw a sofa on your website should have enough details to go into your store and confidently pick the same sofa on the floor.

Look for exclusive partnerships

Like the home good industry, the beauty industry has seen a number of digitally-native brands crop up, each one serving a very specific niche. Rather than trying to compete directly with them, Ulta decided to embrace its competition and offer them something they probably wouldn't get without paying a huge price: retail space. Knowing that customers like to try makeup first before buying, Ulta partnered with brands like Morphe and Kylie cosmetics, and now the only place consumers can try these brands in person before buying is Ulta. 

It's a win-win for both brands. The digitally-native brands can reach a wider consumer base and capture those that would rather try before buying, but they still have their online stores. On the flip side, Ulta gets an increase in traffic and a chance to upsell consumers on other products.

The takeaway here is to create partnerships with other businesses or people that will drive traffic into your store. The business doesn't have to be digitally native. It just needs to give that segment of consumers a good reason to go to your store. 

Here are a few ideas:

- Connect with a non-competing home-related company and consider sharing showroom space. In 2013, Crest Lighting in New Lennox, IL, partnered with a cabinet company, which now shares 35 percent of Crest's showroom space. The cabinet company contributes to both rent and utility costs, though sales conversions between the two companies aren't high.

- Open or rent out workspaces for interior designers in your area. You may be able to find solo practitioners that want space not in their homes, but can't afford to pay for an office space. 

- Host a pop-up shop in your showroom for a local artist. You can even hold a wine-and-cheese reception to launch the pop-up and draw people into your store. This is a great way to introduce the artist's fans to your store and maybe encourage them to shop a little while they're there.

Invest in loyalty

Over the last few years, Ulta revamped its loyalty program, which grew by 14.4 percent year over year in terms of active members. The program is free to sign-up and offers consumers to achievable tiers, one for spending $450 within a calendar year and another at the $1,200 level. Both come with additional perks and ways to earn points, which can be redeemed towards a purchase. Just 100 points gets members $3.00. 

Home furnishings and lighting retailers may not be able to create a robust loyalty program — most people only purchase these products once every few years — but you can find other ways to reward your customers. For example, start a sale a week earlier for your email subscribers. If you're hosting an event, invite them to the event first and let them have first dibs at the RSVP list.

 

Retailers, what other strategies could you borrow from Ulta? Share your thoughts with us in the comments!

Photo: Free Creative Stuff from Pexels

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