While many retailers were hammered by the disruptions wrought by the pandemic, Ulta Beauty—powered by a totally new data and e-commerce strategy—saw its revenue soar by 40% to $8.6 billion in a perfect example of the power of the cloud.
I was introduced to Ulta by some friends at Redis, the real-time data company, which played a major role in the strategic reimagination plus tech overhaul that helped Ulta post those outstanding results.
I recently had a great conversation with Ulta’s IT director for E-commerce and digital, Omar Koncobo, who explained the pandemic-related challenges Ulta began to face in early 2020 and the actions Ulta took to overcome those. You can see the entire interview in this Cloud Wars Live podcast episode, and I’ve pulled out five compelling quotes from the lively discussion with Koncobo.
1. The Big Challenge
“It wasn’t simple to achieve, but we absolutely had to do it. that. The way we make this happen is to meet our customers, our guests, by providing all the technologies, the assortment of choices, the inventory, the newness, and then with their permission we can follow them and try to learn from them, and we try to see what clicks for them…. With that in place, then we saw that the next big thing was, how do we make that work on the back end? How do we coordinate all those pieces in the back to make that happen? That’s the heaviness.
2. Customers at the Center
“So I could be on the virtual store, buying things, looking through some products, and then walk in the physical store and get welcomed with, ‘Hey, these are some things that we believe you’ll like based on what you were looking at on the site,’ or ‘Hey, these are items that you had in your basket on the virtual store—we can see if they’re available here in the store if you want to purchase them.’ So those are the types of things that we’re doing to ensure our guests have the ability to go in and virtually try on things. They might want to try four or five different colors—in the past, they had to try it on then wipe it out, then try the next and then wipe it out—but now you don’t even have to do that because it’s virtual now. And hair color—you can see how the hair color’s going to look on you before you even change that color. So, all those improvements are from the new technology, and we’re bringing in even more.”
3. Curbside Creation in just 4 weeks!
“Our story is really unbelievable. When the pandemic hit, you won’t believe it but for us, curbside was not existing. We had some small projects but that was actually being piloted in only a handful of stores—it wasn’t anywhere near the whole chain. And you know, as the stores were closing and we started getting directions about hey, you know, you can have a curbside pickup and you can have an in-store pickup, then the strategy was focusing on what do we do—we only have a small pilot in only a handful of stores! How do we scale this to the whole chain? Well, luckily, we didn’t have to worry about the backend scaling or technology. This is powered by a technology that we really love a lot, Redis, and so for us that part was already taken care of. The more important thing was now how do you actually roll out all the different hardware and what do you call that? The logistics that the stores will need to actually make it operational for the piloting was going great. So basically, it took us about four weeks to strategize with all of our shipping partners and identify all the stuff that had to be shipped and all the devices to ship and the packing materials, the communication, the banners, and all that. Yeah, it took us just about four weeks to actually just come up with a strategy and deploy that to the whole chain, where now our stores were able to open and provide curbside pickup in no time basically in the middle of the pandemic. It was really an amazing feat that we were able to pull off—unbelievable!”
4. The Power of Data
“So data was the key to help us make the right decision, and it is data that helps us to make the right investments. With data we can be sure that we actually delivering what our customers are looking for, and so now it is such an important piece of everything we do. And we make sure that all of our decisions and everything we do is backed by data.”
5. What’s Next?
“We have to continue the growth. If you look at Ulta, and as you said, even though we have this 40% growth, Ulta is about $8 billion in revenue. But if you look at the whole beauty industry, it’s like hundreds of billions. So you can see where, yeah, we still have plenty of room to grow and a lot of opportunities, right?”