MILLENNIAL MEN Opportunity in Personal Care
Outline • Opportunity & Compelling Event • Customer Journey o Phase 1: Awareness Campaign o Phase 2: Building the Ideal Shopping Experience o Phase 3: Bring Ulta to the Man o Phase 4: Sustaining the Transition • Measurement
Men’s Personal Care Industry Industry trends indicate the men’s grooming market is rising, and companies are not taking full advantage of the increase in demand, which is predicted to rise 16% in the U.S. by 2017.
What is Men’s Personal Care? Men’s personal care can include any toiletry products applied to the body • Facial Hair Care • Hair Care • Skin Care • Teeth and Nails • Fragrance
OPPORTUNITY & COMPELLING EVENT
Target Markets • Women who already shop at Ulta (teens to mature women) • Men who shop at Ulta • Millennial men (18-34) who do not currently shop at Ulta
Why Millennial Men? “With a number of Millennials reaching 25 years of age, or older, during 2012–2017, their desire to experiment with new and innovative products, driven by their growing aspiration to look well groomed and styled, will drive demand for Male Toiletries in the country.” (Canadean) • Desire to experiment with new and innovative products • Growing aspiration to look well groomed and styled
Millennial Men: Barriers To Purchase • Low awareness of specialty stores • Lack knowledge of products • Men’s products are difficult to find quickly and efficiently • Lack of in-store samples and testing • Low inventory levels / out of stock
Why Ulta? • Growing retailer with over 700 stores today) • Could become the leader in this sector • Offer both mass and prestige products – Solution is versatile
• Less preconceptions about Ulta compared to its competition – Allows for flexibility
Problem Statement
Millennial men don’t embrace Ulta as their ideal shopping destination for men’s grooming products and services How do we inspire millennial men to shop at Ulta?
Compelling Event Ulta is specifically aiming to attract new customers according to their growth strategy; therefore, Ulta could become THE place to purchase men’s products by capturing the majority of this untapped market predicted to be worth $6.1 billion by 2017.
Ulta’s Growth Strategy • Roll out 1,200 store plan in the U.S. • Expand offering with new products, services and brands • Enhance successful loyalty program • Broaden marketing reach to drive awareness and acquire new guests • Grow E-Commerce business and digital presence
CUSTOMER JOURNEY
Path to Purchase
Project Goals • Improve sales of Ulta’s men’s products to be 1.3% of all sales • Create a greater awareness of The Men’s Shop at Ulta by attracting new and current millennial male customers through social media, emails, and an app • Drive and sustain a long term relationship with millennial male customers through loyalty membership and app engagement
Phase 1 Building Awareness
Project Themes • Problem. Solved. – Problem & solution based – Millennial men are not preventative
• Life Stages – Ulta has you covered
Social Media
• Gain attraction of the current female followers • Introduce changes and incentives
Email: Target Men and Women Differently • Inform current female and male subscribers of upcoming changes and events – 13.4 million subscribers • Build millennial men’s loyalty – Incentives – Referral programs
GROOM
by Ulta
• Blog style app • Shop, quiz, and game element • Loyalty customer login • Product Scanner
“52% of 18-34 year old male personal care product buyers are interested in apps that would help them choose the right products.” -Mintel
App Notifications Create Awareness
Storefront Awareness
Phase 2
Building the Ideal Shopping Experience
The Men’s Shop at Ulta Organized & multifunctional aisle that is: • Comfortable • Informative • Separated • One stop shop
Current State
New Floor Plan
The Men’s Shop at Ulta
The Men’s Shop at Ulta: 30’
The Men’s Shop at Ulta: 10’
The Men’s Shop at Ulta: 3’
Interactive Solution “Millennials are 216% more likely to be influenced by in-store touch screen displays.”-IRI Worldwide • Attracts male customers • Supplies information • Encourages interaction and engagement • Builds confidence and permission
Interactive Solution
Home Screen
Featured products to find reviews, prices, information and ingredients
Product Scanner Quiz to find recommendations and check rewards
Shop by brands
Shop By Brand
Product brand displayed with logo and engaging image
Click to find specific information and description about products
Other product recommendations from that brand and comparable brands are listed
Shop By Category Product categories are displayed with an engaging image and option to see other categories
.Click to find specific information and description about products
Other product recommendations from that category and comparable brands are listed
Loyalty Members Loyalty program specific to men Offer specific deals and better track male purchases and engagement Load card with money for easier checkouts
Customers can log into their loyalty account to find out their point balance, how much money is on their card, and see their purchase history.
Quiz Quiz element helps men find products that are specific to their needs
Photos of every day men and not celebrities make millennial men feel less intimidated and more realistic about their situation
Barber Shop
Phase 3
Bring Ulta to the Man
Ulta in a Retail Setting • Recommendation: Men’s Wearhouse • Shop in shop in a place where millennial men frequent throughout their life • Convenient and comfortable
• Placed near accessories • Storage
• Sells cologne, hair gel, and shaving products
• Temporary version • Cost effective
• Versatile for pop-up shop use
Pop-Up Shop
Groom and Brew • Exclusive for men • Haircut and shave • Local music and beers
Marketing the Solution
• Online • Print • Social Media
Customer Journey: Current Male Shopper
Customer Journey: Millennial Male Non-Shopper
Phase 4
Sustaining the Transition
Future Suggestions • App Updates • Mass products for men • Replenishment program
Potential IP Design • Potential IP design for DCI-Artform in gyms or hotels – Holds Ulta exclusive products – Builds awareness and attraction for Ulta
MEASUREMENT
Key Performance Indicators Awareness and Attraction • 140,000 app downloads in first year Improve Sales • Men’s shop at Ulta sales will grow from 1% to be 1.35% of all sales in four years Long Term Relationship • 536,000 male loyalty members in over 4 years
Metrics • Increase in awareness of Ulta’s men’s products and services • Increase in millennial male customers’ attraction • Increase in sales of Ulta’s men’s products across multiple channels • Increase and sustained use of separate loyalty program and app updates
ROI for DCI-Artform What are we selling? • Fixtures for 140 Ulta Stores • Fixtures for 100 Retail Settings (Men’s Wearhouse) • Fixtures for 1 Pop Up Shop • App development • Maintenance of app and social media
Opportunity for DCI-Artform = $1,860,640 (in 1st year)
= $548,390 (in 2nd year) = $572,750 (in 3rd year)
ROI for Ulta For a three year investment, DCI-Artform expects a payback within the first 7 months of the program based on the following numbers: Four year growth: $79,234,053 / 4 = $19,808,573 $19,808,573 / $2,981,780 = 6.6 months
Conclusion • Social Media • Email • App
– Groom by Ulta
• Revamp men’s aisle, add interactive solution, and include barber shop inside Ulta – The Men’s Shop at Ulta
• Install shop-in-shop kiosk in a retail setting – Groom and Go by Ulta
• Create pop-up-shop
– Groom and Go by Ulta
QUESTIONS?
APPENDIX
Project Background Background: The InVisisonship Cosmetics Team is interested in finding solutions regarding low awareness of specialty or “masstige” stores that carry men’s personal care and grooming products, like Ulta. Primary research was conducted to better understand the millennial male shopping experience in this product and retail area. The objectives of the research were: • To better understand the millennial male’s current knowledge on products and desire to learn more • To better understand shopping habits, experiences, and influences • To gain insight into what products and brands millennial men are using • To further separate the gap between “common product purchasers” and “specialty products purchasers” • To find out where they are getting their information from • To discover personal barriers to usage of grooming products Method: Four ninety-minute groups with millennial males 18-34 years old were held. Each group had six respondents with 24 respondents in total. • Two of the groups were "Specialty" groups: All 6 respondents needed to purchase at least four of the following type of products: Body lotions, Hair removals, Blemish/Spot control products, Oil absorbing sheets, Acne pads, Teeth whitening, Actual cosmetic/make up products, Toner, or Salon brand/High end versions of: Cologne, Facial wash, Facial moisturizer, deodorant, Body Wash, Shampoo/Conditioner, Hair products. • Two groups were "Commonly Used" groups: All 6 respondents need to purchase at least two of the following type of products: Cologne, Facial wash, Facial moisturizer, Deodorant, Body wash, Shampoo/Conditioner, Shaving essentials, Hair products. External Recruiting agency Agency fees (Recruiting, incentives and check preparation)
$7040
Food
$200
Insights Hours (18)
$3,150
Ulta SWOT Strength • Broad portfolio of products and services • Strong Store Network • Extensive Brand Portfolio Weakness • Excessive dependence on few vendors • Lack of scale Opportunity • Growing preference for online shopping • New opportunities in the fast growing cosmetics market, in particular, the male grooming market • Ulta believes that the United States can handle approximately 1,200 Ulta retail stores long term. This happens to be double the current 696 stores the company operates as of May 3, 2014. (motley fool) • Ulta is also testing smaller stores half the regular size in less densely populated areas. This lets us know they are willing to try different concepts and are willing to fit the store to the customers in that area. • Ulta is increasing training and marketing to attract new shoppers and is building a new distribution center. This increased training is always updates to fit with store changes. (market watch) Threat • Shorooming and webrooming • Ulta’s competitors • Increases in the demand for, or the price of, raw materials used to build and remodel our stores could hurt Ulta’s profitability (Ulta 10K)
Ulta Net Sales ULTA Salons, Cosmetics, & Fragrance Trailing Three Months
Financial Results
May 4, 2013
May 3, 2014
Net Sales
$582.7 million
$713.8 million
Comparable store sales
6.7%
8.7%
Men’s Toiletries Value Sales Value sales of men’s toiletries*, UK and US: 2007 – 2013 (for.) $million
£million
3,089
2,882
3,012
3,184
2,983
577
585
2,520
2,593
2,675
512
529
523
534
551
574
2007
2008
2009
2010
2011
2012
3,303
595
3,412
3,501
603
611
2013 (for.) 2014 (for.) 2015 (for.) 2016 (for.) 2017 (for.)
The US and UK men’s grooming markets showed positive growth in each of the last five years, with the US increasing almost 20% and the UK by 12% during 2007 – 2012; sales are forecast to rise 16% and 6% in the US and UK, respectively, up to 2017
Sub Categories Top male-centric BPC sub-categories as % of each broader BPC sub-category, US: 2009 – YTD 2014 90 80 70 60
2010
50
2011
40 30 20 10 -
The BPC categories traditionally known for their inundation with male-centric offerings (deodorants, shave preps and razors) continue to dominate with their representing of the “male” claim in new product launches today
2012 2013 YTD 2014
Focus Group Summary Overall, the “general purchasers” and the “specialty purchasers” are not very different in their preferences and shopping habits. Millennial men include their grooming purchases in a larger trip; therefore they are going to mass retailers or grocery stores in order to purchase their personal care and grooming necessities. Because of this, millennial men have a very low awareness of specialty stores, like Ulta. For those who do know these stores exist; they have a preconceived notion that they are too expensive and are for women. Mass retailers and grocery stores do not have as many knowledgeable people, signs, or digital devices to provide specific details about products. Therefore, millennial men lack knowledge and are simply used to purchasing products in a trial and error process to see what works. The location of men’s products within the store aisles make it difficult to find everything quickly and efficiently, especially when convenience is the most important driver. When products are not stocked in the store, men become less loyal to the brand and may not even shop that specific store anymore. Millennial men want their products to be available, especially because they like to stock up on their products. Millennial men are more comfortable and prone to making a purchase if they can sample or try products. They are not given samples and are not given the opportunity to try products in most retail settings to consider scent or consistency in their purchases. They also want to know the products they are going to buy will work for their specific problem. Millennial men strive for a shopping trip that is convenient, organized, not overwhelming, has a good variety or products, and has opportunities for them to learn more about products in a fast and easy way.
Fixture Dimensions
Storefront Awareness Option 2
Key Performance Indicators Awareness and Attraction
Improve Sales
Long Term Relationship
Facebook • Average of 30 share • Average of 50 comments
Men’s Shop at Ulta • Men’s shop at Ulta sales will grow from 1% to be 1.35% of all sales
Twitter • Average of 50 favorites • Average of 30 retweets
App • $2,016,000 sales in first year
Separate loyalty program for men • 536,000 members over four years App updates • App content updated on a weekly basis
App • 140,000 downloads in first year
•
•
Increase in awareness of Ulta’s men’s products and services Increase in millennial male customers’ attraction
Men’s Wearhouse • $6,999,920 sales Pop up shop • $89,775 sales in first year
•
Increase in sales of Ulta’s men’s products across multiple channels
•
Increase and sustain use of separate loyalty program and app updates