Makeover Ahead for Ulta Beauty With New Agencies

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Credit: Frazer Harrison/ Getty Images

The beauty landscape may be more competitive than ever—earlier this week, Spotify raised a few carefully plucked eyebrows when it began selling lipstick—but there's also massive opportunity for beauty retailers to personalize their products and offer virtual help with cosmetics. That's what Bolingbrook, Illinois-based cosmetics seller Ulta Beauty is going after by revamping its marketing with new agency relationships in a bid to attract more loyalists.

After issuing requests for propoals for both its creative and media accounts in July, Ulta has chosen McCann New York to handle creative and MullenLowe's Mediahub for media duties. The brand formerly worked with MullenLowe on creative and Mediahub on media, but the latter's new relationship will include a revised strategy and team.

"They're creative powerhouses—they understand brand-building from a true emotional level and they both have digital and social at their hearts," says Shelley Haus, who joined Ulta as senior VP of brand marketing three years ago. "We want to complete this transformation to make sure we are reaching our beauty enthusiasts in ways that connect with them like no one else."

While 27-year-old Ulta has occupied a unique positioning in the beauty space—its more than 1,000 stores offer a blend of experiences with products, further distinguishing it from its department store competitors—it's facing new rivals beyond Sephora. Amazon is making inroads in the cosmetics space, and has been in talks with high-end beauty retailer Violet Grey, according to reports.

For the second quarter, Ulta reported a 21 percent rise in revenue over the year-earlier period to $1.3 billion, along with a profit jump of 27 percent to $114 million. Comparable sales increased 12 percent for the period. The retailer will report third-quarter earnings on Nov. 30.

"Ulta's large loyalty program, significant and prestigious vendor relationships, mass + prestige + salon store format, impressive online growth, beauty enthusiast engagement, and awareness growth runway are key competitive advantages for the near and long-term," wrote Oliver Chen, retail analyst at Cowen, in a recent research report.

The new work, debuting next year, will build on Ulta's recent brand changes under CEO Mary Dillon, who joined the company more than four years ago. The company has spent recent years solidifying what it stands for as a brand and honing its marketing personality, as evidenced in 2015's campaign "All Things Beauty, All in One Place."

"It's our view that Ulta Beauty is a brand that has a huge role to play in culture today," said Devika Bulchandani, president of McCann New York in a statement. "The beauty category is in need of a true disruptor that can not only challenge the status quo, but can also be a voice of optimism and possibility for young women and men across America."

Shelley Haus at Ulta Beauty
Shelley Haus at Ulta Beauty Credit: Ulta Beauty

Haus says that the marketing changes will include a new creative campaign focused on digital and social, as well as more personalized efforts to harness data from customers. While Ulta is not changing its budget—the chain spent $50.5 million on measured media in the U.S. last year, according to Kantar Media—Ulta is evolving its media mix to be less reliant on traditional channels like print and it will put more dollars into TV, radio, digital and social. The work will roll out internally in the first half of 2018 and externally in the second half.

"All of the fundamentals are in place," said John Moore, global president of Mediahub, in a statement.

"Ulta Beauty has a proven retail concept, dynamic leadership, a strong sense of purpose and a palpable desire to innovate in the way they engage with their guests," he said.

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