INTRO Retailer and Area of Business International Expansion 6 Month Plan: Topline and New Location Assortment Plan Purchase Order Integrated Marketing Plan
COMPETITORS Bath and Body Works
Sephora
Target
Expanded to over 25 countries Products are almost all private label 1,800 worldwide stores
Expanded to over 15 countries Sells high end and private label cosmetics Around 1,800 stores worldwide Has booths in departmentstores
Expanded to 2 other countries Offers mass market cosmetics Around 1,800 stores HQ location in India
COMPETITORS Cult Beauty
Boots
Selfridges
Likely will be ULTA's biggest competitor in the U.K. Sells mix of prestige and mass market (not as many as ULTA) Offer more exclusive/unique products than ULTA Popular U.K. drugstore Offers mass market cosmetics ULTA should sell products that Boots sells-that might not be available in the US-to remain competitive
4 stores in the U.K. Offers high end cosmetics More of a destination/luxurious shopping experience than ULTA
SWOT ANALYSIS STRENGTHS ULTA's business model, which is a combination of mass market and prestige products all in one place Their convenient locations Loyalty program and strong relationship with customer Sales on an upward swing
OPPORTUNITIES Their biggest opportunity is to expand outside of the United States Continued expansion within the U.S.
WEAKNESSES They have not expanded internationally Lack of international expansion pushes them behind competitors even if they are doing better in the United States
THREATS Any down swings in the economy Competitors Potential miscalculations in predicting beauty trends and new products
We're on a quest to bring the fun of beauty to all -- constantly delighting our guests with all things beauty all in one place, while offering rewarding careers for our passionate, beauty-loving associates. ULTA BEAUTY'S CORE MISSION
HISTORY 1990 first brick-and-mortar ULTA opens after Hanson&George raise 11.5M in venture capital
1989 Dick George writes ULTA's first business plan; Terry Hanson comes on board
1999 Ulta3 becomes ULTA
1994 all typical drug store products eliminated : vitamins, oral health, etc
2013 Mary Dillion is hired (CEO)
2007 Company goes public
2015 Sales increased by 21% from 2014
ULTA Beauty establishes itself as the onestop shop for all things beauty at all price points. They are the only store in the United States to offer prestige and mass market products in the same store. BRAND POSITIONING
SIZE OF BUSINESS ULTA Revenues*
Market Share ULTA Beauty 6%
6
4
2
0
2013
*in billions
2014
2015
2016
2017
US Cosmetics 94%
As a whole, the US Cosmetic industry made around 84B in 2016. ULTA made up 4.85B of that revenue.
PRESENCE NUMBER OF STORES
SOCIAL MEDIA 4.5M
ULTA Beauty has 1,074 brick-and-mortar stores in 48 states and D.C.
3.375M
Additionally, ULTA provides e-commerce through their website, ulta.com
2.25M
1.125M
0M Twitter
PRICING ULTA covers price points from drugstore to high end They price high end products identically or very comparably to Sephora and department stores Drugstore products are priced higher than they are at Target or Walmart, but identically to CVS ULTA ranges from about $0.50 to $2 more expensive than stores with Everyday Low Pricing Strategies
TARGET CUSTOMER GEOGRAPHIC Currently all of ULTA's customers are located in the United States, as ULTA is only located there More specifically, cities and large suburbs with the largest concentrated area of stores being in California
PSYCHOGRAPHIC Customer loves makeup and being introduced to new products Wants the convenience of high and low in one store Likes a mix of high and low products
DEMOGRAPHIC Age range: 18-34 Middle class to upper middle class Largest consumer bases: Caucasian and Hispanic Target customer has at least a college degree, or is pursuing one Likely does not have children
BEHAVIORISTIC Likely to always make a purchase in ULTA Gravitate toward ULTA for mix of high and low products
TARGET CUSTOMER Number of Potential Customers 83.1M Millennials in the United States 41.55M are girls 90% of those meet the other ULTA target customer specifications Total number of potential customers: 38M
COMPETITIVE ADVANTAGE Product offering: high and low end Full service salons that add to the customer experience Cuts need for multiple stops on shopping trips Strong loyalty program: 23M users ULTA collects data through their loyalty program that they share with their brand partners for their benefit, incentivizing brands to place high value on their relationships with ULTA
AREA OF BUSINESS Estee Lauder, Clinique, and Lancome make up the selected area of business These brands attract a similar target customer Clinique and Estee Lauder are owned by the same brand, but Lancome's parent company is L'Oreal They offer similar products that tackle a lot of skin concerns such as acne and antiaging They are well developed brands with an established group of popular products, making them a low risk, clear cut brand to buy from
INTERNATIONAL EXPANSION
The United Kingdom is the chosen area for expansion ULTA will open a store in London Competitors have been successful there, which means there are potential ULTA customers there ULTA's target market exists heavily there Though ULTA has competitors there, there is not a store with the exact same high low set up and salon experience as ULTA
INTERNATIONAL EXPANSION LAWS/PROS
CONSUMERS
Joint lowest corporation tax in the G20:
2% growth in skincare purchases in
20%
2017, while other toiletries categories
Strong work force
are dropping
Dept for International Trade offers
More money spent online shopping
certain free services to overseas
per UK household than in any other
countries wanting to expand to the UK
country
2nd largest port un EU, largest airport,
Weather has been keeping people
excellent railways
from shopping at brick-and-mortar - in
Must register company with Companies
March, the number of shoppers
House - cost is 20 pounds
dropped by 6%
Extensive IP protection
High street decreased around 8%, but
Enterprise zones could be worthwhile
centers/retail parks only dropped
to look into for store locations
around 4.8% and 1.8%, which means a store like ULTA would attract more people than stores on the high street
TRENDS MACRO
COSMETICS
Rise of the middle class leads to
Glowy skin
increased consumer spending
Natural makeup--fewer powders
Urban transitioning means
Makeup products that also have
increased foot traffic in stores
skincare benefits
People moving and studying
Environmentally friendly products
abroad
Brand transparency
Continued worldwide connection
Cruelty free testing
via social media and technology
OVERALL 6 MONTH PLAN
NEW LOCATION 6 MONTH PLAN
INTERNATIONAL LOCATION
London makes sense as the first place for ULTA to expand internationally because it high enough population of ULTA's target market for them to be successful there. Additionally, ULTA already receives publicity from some of England's largest beauty bloggers and influencers. This means ULTA already has its foot in the door there, as well a great marketing opportunities. Beauty influencer/YouTuber, Zoe Snugg (Zoella, 12.1M subscribers), has a brand called Zoella Beauty that is sold in ULTA stores. Though is already available in the U.K., ULTA can potentially use their relationship with Snugg to bring in business to the new ULTA location.
TARGET CUSTOMER: LONDON PSYCHOGRAPHIC DEMOGRAPHIC Our target age range is 18-34 year olds. Middle class to upper middle class customers. They have at least a university degree, or they are in the process of getting one. In the US, ULTA's largest consumer base is Caucasians and Hispanic people. There is a much smaller number of Hispanic people living in the U.K., so ULTA's biggest consumers in the U.K. would be most likely be Caucasians.
Our customer loves makeup and being introduced to new products They want the convenience of high and low in one store
BEHAVIORAL They like being able to try lots of products all in one place. They will likely always spend money when they go in ULTA, and ULTA's high and low pricing allows them to.
GEOGRAPHIC Our target customer lives in London and surrounding areas
TARGET CUSTOMER: LONDON
Number of target customers in London: ~1.7M Millennials in London ~880,000 are females Around 50% of those people fit the rest of our target customer profile On top of that we have a large number of shoppers outside of the typical target consumer Our estimated number of consumers is around 440K-500K people
PRICING STRATEGIES
As closely as possible, it will be important to match prices of competitors in England Prices might be higher because importing them into the country might mean higher taxes. ULTA's mix of high end and low end products will appeal to the London consumer who wants the option to shop both in one place Because two of their biggest competitors are a drug store and a department store that sells high end cosmetics, ULTA could compete strongly as the store that offers both
ASSORTMENT PLAN
ASSORTMENT PLAN
Inventory to carry: $379,117 Average inventory value based on per unit tickets: $60,924 Projected Sales: $163,836.00 Projected Average Unit Retails: $55
PURCHASE ORDER
INTEGRATED MARKETING PLAN OUTLINE
In-store posters advertising for Clinique, Lancome, and Estee Lauder Social Media posts on Ulta's Instagram "Available at Ulta" on Clinique, Estee Lauder and Lancome ads in London Promo posts done by influencers who have already worked with Clinique, Lancome and Estee Lauder Bring said influencers in for launch event
OBJECTIVES
Increase foot traffic by 20% by working with influencers and promoting with influencers. Use influencers to encourage consumers to purchase these three brands from Ulta as opposed to competitors Make up 5%-10% of opening sales.
BUDGET Opening Party: Part of Ulta's overall marketing budget Relatively large budget in comparison to our projected sales (~27%) justified because it should increase overall sales and bring in a lot of foot traffic for the entire store Objective and task (just for launch) Percentage of sales moving forward
SELECTED MERCHANDISE FOR PROMOTION
SCHEDULE
PROMO MESSAGE ULTA Beauty is coming to the U.K., and you can be a part of our launch party. Sign up o ulta.com to attend the opening, receive a 20% discount to spend on Clinique, Estee Lauder and Lancome products and meet some of your favorite faces of the brands.
PROMO ACTIVITIES In-store posters Sponsor influencer posts Bring influencers to opening party Posts on ULTA's social media Work with Estee Lauder, Lancome and Clinique to put out billboards or posters advertising that their products are available at ULTA
PROMO DETAILS Posters that advertise for these brands in ULTA will encourage shoppers to check out those sections Collaborate with the brands to put out billboards that inform customers that those brands are available in ULTA Work with influencers who have a history with these brands or work with them: Estee LaLonde, Danielle Peazer, Karlie Kloss Implement a lot of marketing digitally through social media accounts and the website. This is free and one of the most affective marketing strategies. Have each of these influencers as faces of the launch party--they will draw attention and bring in customers.
PROMO DETAILS Encourage people to attend the opening by having them use a promo code from an influencer If they use the promo code they will receive a 20% coupon to use on Clinique, Lancome or Estee Lauder products during the opening Pay influencers to post about themselves going to ULTA on their social media Continually advertise the opening and these three brands on Instagram
Danielle Peazer
Estee LaLonde
Karlie Kloss
Available at ULTA
CONCLUSION Expanding ULTA Beauty into the U.K. Do around 160K in sales in Q3 and Q4 Clinique will be the largest percent of this area of business's products, followed by Estee Lauder and then Lancome Implement an integrated marketing system that focuses on using digital platforms to advertise and involves influencers in the promotion and the opening party
SOURCES
Cosmetic Industry. (n.d.). Retrieved May 24, 2018, from https://www.statista.com/topics/1008/ cosmetics-industry/ CVS. (n.d.). Retrieved May 24, 2018, from https://www.cvs.com/ Bath and Body Works. (n.d.). Retrieved May 24, 2018, from http://www.bathandbodyworks.com/ global-locations/global-locations.html How Ulta Suceeds. (n.d.). Retrieved May 24, 2018, from https://www.mytotalretail.com/article/ how-ulta-suceeds-in-the-competitive-beauty-category/ Kukec, A. M. (n.d.). How Ulta grew from the suburbs into a top national retailer. Retrieved May 24, 2018, from http://www.dhbusinessledger.com/article/20170205/business/170209989/ Lancome. (n.d.). Retrieved May 24, 2018, from https://www.sephora.com/search/ search.jsp?keyword=lancome&mode=all Lancome. (n.d.). Retrieved May 24, 2018, from https://www.sephora.com/search/ search.jsp?keyword=lancome&mode=all Makeup Trends 2018. (n.d.). Retrieved May 24, 2018, from https://www.refinery29.com/ makeup-trends-2018?bucketed=true&bucketing_referrer=https%3A%2F%2Fwww.google.com%2F Maybelline. (n.d.). Retrieved May 24, 2018, from https://www.target.com/ s?searchTerm=maybelline&category=0|All|matchallpartial|all%20categories&lnk=snav_ta_maybelline_s News Release Details. (n.d.). Retrieved May 24, 2018, from http://ir.ultabeauty.com/news-releases/ news-release-details/2018/Ulta-Beauty-Announces-Fourth-Quarter-Fiscal-2017-Results/default.aspx Our Story. (n.d.). Retrieved May 24, 2018, from http://careers.ulta.com/our-story/ Sephora. (n.d.). Retrieved May 24, 2018, from https://www.forbes.com/sites/walterloeb/2013/04/18/ sephora-department-stores-cannot-stop-its-global-growth/#538d20862e81 UK Consumers Spending More on Skincare. (n.d.). Retrieved May 24, 2018, from https://uk.kantar.com/ consumer/leisure/2018/uk-consumers-spending-more-on-skincare/ UK Retailers See Drop In Shopper Numbers. (n.d.). Retrieved May 24, 2018, from https://www.theguardian.com/business/2018/apr/16/uk-retailers-see-6-drop-in-shopper-numbers-in-march Ulta Beauty, INC. (n.d.). Retrieved May 24, 2018, from One Source website: https://app.avention.com/ company/f8792619-81e3-3297-8a17-fa05f2308da8#report/company_summary 10 Global Macro Trends for the Next 5 Years. (n.d.). Retrieved May 24, 2018, from https://blog.euromonitor.com/2012/11/10-global-macro-trends-for-the-next-five-years.html
TOPLINE 6 MONTH
NEW LOCATION 6 MONTH
Inventory Levels
ULTA's Q3 total revenue = 41% of season's revenue ULTA Q4 total revenue = 59% of season's revenue Q3+Q4 total revenue = 3.28B My area of business= about 5% of the season's revenue or 164M ULTA has about 1K stores The new location would do around 1/1000 of ULTA's total business for Lancome, Estee Lauder and Clinique or ~164K Our biggest sales months would be September, November and December because of the semi annual sale, the Black Friday Sale and Cyber Monday sale, and the holidays Our markdowns would be highest in September and November (our big sale months), as well as January (also a big sale month); less people buy in January due to overspending during the holidays Our employee discounts would be the highest during the biggest sales months Shortages would be highest around Christmas time All of these factor into the stock levels for each month