COMPETITIVE ANALYSIS Yu Tiﬀany Morimoto, MHCID EXECUTIVE SUMMARY

While Ulta Beauty is the largest beauty retailer in the United States, there is quite a competition of customers purchasing beauty and cosmetic products online. It will be helpful for Ulta Beauty to conduct a competitive analysis with companies with similar value propositions, similar target audiences, and diﬀerent eCommerce sites in order for Ulta Beauty to understand where they stand in the online world.

Sephora and MAC Cosmetics were two direct competitors evaluated. Soko Glam, Kylie Cosmetics, Nordstrom, and CVS Pharmacy were four indirect competitors evaluated. Harry’s was an influencer evaluated.

Takeaways:

1 All companies evaluated had a horizontal navigation with a vertical filter selections

2 Large and high resolution product images on the products list page is favorable

3 Having filters for customers to filter out specific ingredients or concerns give a more in-store personalized

experience online

4 Simple navigation and category images can allow customers to convey products and decide purchases

2 4 Introduction 7 Methodology TABLE 10 Direct Competitors OF 20 Indirect Competitors CONTENTS 40 Influencers 46 Recommendation 48 Conclusion

3 INTRODUCTION

4 Ulta Beauty is a chain beauty store carrying diﬀerent varieties of beauty products. Every store also has a salon where customers can reserve to receive salon services. Ulta Beauty has a website which customers could search for products, shop, and book appointments. Customers could also check their rewards and any promotional information. Ulta Beauty also have a mobile app for both iOS and Android that covers the same features as the website and connects online with oﬀline.

5 ULTA BEAUTY OVERVIEW

STATISTICS NUMBER OF BRANDS MOBILE APP SUPPORT REWARDS PROGRAM RETAIL STORES

iOS 30.5M 500 & TOTAL VISITS ON ULTAMATE YES BRANDS JANUARY 2020 ANDROID

6 METHODOLOGY

7 COMPETITIVE ANALYSIS

Overview

In order for Ulta Beauty to give customers an unique and seamless online and oﬀline experience, Ulta Beauty should understand who their RESEARCH competitors are and what customers favor from these businesses. Competitive analysis is the best evaluation method for this project.

What is Competitive Analysis?

Competitive analysis compiles qualitative and quantitative data of IMPROVE ANALYZE competitors and influencers and analyzes their strength and weaknesses.

Benefits

By conducting a competitive analysis, Ulta Beauty will gain market-base intelligence and find any opportunities to improve and be more unique in the market.

8 ULTA BEAUTY’S COMPETITORS

DIRECT INDIRECT INFLUENCER

Companies that have similar value Companies that has diﬀerent value Companies that oﬀer innovative proposition to the similar target proposition to the similar target eCommerce website audience audience

Sephora Soko Glam Harry’s

MAC Cosmetics Kylie Cosmetics

Companies that has part of similar value proposition to the part of similar target audience

Nordstrom

CVS Pharmacy 9 DIRECT COMPETITORS

10 Sephora is a chain beauty store carrying diﬀerent varieties of beauty products. While it is similar to Ulta Beauty, Sephora also carries numerous of high-end beauty products. Sephora also provide services and classes in-store for customers. Sephora has a website which customers could search for products, shop, and book appointments. Customers could also check their rewards and any promotional information. Sephora also has a mobile app oﬀering an omnichannel experience.

11 SEPHORA OVERVIEW

STATISTICS NUMBER OF BRANDS MOBILE APP SUPPORT REWARDS PROGRAM RETAIL STORES

iOS BEAUTY 33.4M 300 & TOTAL VISITS ON YES BRANDS JANUARY 2020 ANDROID INSIDER

12 HOMEPAGE Positive Negative

Auto-playing promotions 1 1 2 Displays an auto-playing promotion oﬀers which 1 3 2 users can pause them anytime. By doing so, Sephora can display many promotions without taking space

Eﬀicient shopping experience 2 Reorder feature is available for registered users. Users can easily reorder from past purchases made

Personalization 3 Greets non-signed in users as “Beautiful”. Greets registered users with their name

Auto-playing promotions In order to understand that the promotion oﬀers are 1 pausable, users would have to hover over the area. It is a bit unnoticeable

Unnoticeable promotions Promotional message does not catch users attention. 2 The background and text color blends with the rest of the website

13 QUICK SHOP Positive Negative

Flexible use of links 1 1 2 Users can transition to product details page by 1 clicking either on product image, product name, or “See product details”

Flexible exits 2 Users can exit from the “quick shop” module by clicking either on the “X” or grayed-out area

Easy call-to-actions 3 Users can easily add items to cart or save them for later from the two call-to-action buttons

White space The use white space could be improved. The white 1 space makes the user feel there’s not much product information

14 Positive Negative NAVIGATION 1 1

Personalization There are diﬀerent kinds of quizzes users can take. It 1 tells users recommended products depending on their answers

Omnichannel experience 2 “Happening in store” section informs users about news in the stores - any services, classes, events, etc.

Bad banner resolution Banner image resolution is not good. (Not just in this 1 section but all banners throughout the website has bad quality) 2

15 MAC Cosmetics is a cosmetics manufacturer that sells its own products at own retail stores, other retail stores, department stores, and own eCommerce website. It is one of the top cosmetic brand in the world and loved from wide range of generations. Customers could also receive make-up services in-stores and make reservations online.

16 MAC COSMETICS OVERVIEW

STATISTICS NUMBER OF BRANDS MOBILE APP SUPPORT REWARDS PROGRAM RETAIL STORES

iOS MAC 1.75M 1 & TOTAL VISITS ON YES BRAND JANUARY 2020 ANDROID LOVER

17 Positive Negative

HOMEPAGE 2

Customer support Has chat support that is easy accessible. The 1 1 navigation is sticky on the bottom so users will always know where to find support

Time display 1 The promotional oﬀers timezone is displayed ET, which might be confusing to non-ET users

Search bar Users have to stay hovered on search icon to search 2 for a product. Users cannot click on the icon and expect the search bar to stay there

18 PRODUCTS LIST PAGE 1 2 1 Positive Negative

Flexible product images 1 Users can view the products by image or on model’s face

Filter Users select the filter category and the options are 2 displayed right below. Users can choose more than one options 3

Color choices 3 Users can shop for diﬀerent colors with the color scale from the products list page

4 Filter 4 Users can also choose the skin tone of the on model’s product image

Visibility issues 1 The bold text was diﬀicult to notice. Users wouldn’t be able to tell which options they’ve chose

19 INDIRECT COMPETITORS

20 Soko Glam is a eCommerce website that sells Korean beauty products. Popularity of K-beauty is increasing over the years and Soko Glam is said to be the biggest providers of K-beauty. Soko Glam also oﬀers a service to consult with a K-beauty expert about makeup and cosmetics online.

21 SOKO GLAM OVERVIEW

STATISTICS NUMBER OF BRANDS MOBILE APP SUPPORT REWARDS PROGRAM RETAIL STORES

1.3M 65 SOKO TOTAL VISITS ON NONE NONE BRANDS JANUARY 2020 REWARDS

22 HOMEPAGE Positive Negative

Unbothering Promotions Subtle but noticeable promotion oﬀer. It scrolls with 1 the user but doesn’t bother any of their experience. Also it has the option to hide it

Product browsings The upside down caret button lead users to a 2 suggestion of products. This is a good feature to have, especially for new users who are not familiar with the K-Beauty products 1 2

23 HOMEPAGE CONT’D Positive Negative

Diﬀerent experiences Although Soko Glam doesn’t have any retail stores, 1 1 they have a feature where users could chat with Soko Glam’s skin care concierge

24 Positive Negative

PRODUCTS LIST PAGE 1 2 3

Icons Icons next to products which identifies clean beauty, 1 vegan, Soko Glam recommended, and Soko Glam People’s Choice Award

Product image The product image is aesthetic and big. Also, when 2 users hover over the images, there’s a short description of the product and “Quick Shop” button

Eﬀicient shopping 3 Users can save the product easily without opening any page/modules

Conscious shopping Has a filter for “Free of” and “Ingredient Type”. For 4 conscious shoppers, this filter will ease their shopping experiences

4 25 Positive Negative

PRODUCTS LIST PAGE CONT’D 2

Legibility of icons 1 1 The text in the icons are too small to read and there is no legend that explains these icons

Product image 2 The product itself is taken from afar that it is hard to read the product from the images

Usability issue The filter is sticky and cannot scroll down within the 3 filter sections. If users want to see more “Ingredient Type” options, they would have to close “Free of”

26 Kylie Cosmetics is a cosmetics brand founded by Kylie Jenner, an American media personality from the family Kardashian-Jenners. Creating and selling products that Kylie Jenner loves, the brand was instantly a success with all the fans of Kylie Jenner. While Kylie Cosmetics were only purchasable at direct eCommerce website, from 2018 the products are also available at Ulta and Ulta’s eCommerce website.

27 KYLIE COSMETICS OVERVIEW

STATISTICS NUMBER OF BRANDS MOBILE APP SUPPORT REWARDS PROGRAM RETAIL STORES

iOS ONLY AT 1.1M 1 & TOTAL VISITS ON NONE BRAND JANUARY 2020 ANDROID ULTA

28 HOMEPAGE Positive Negative

Eﬀicient shopping 1 2 1 Having “Bundles & Sets” allow users to have quick access to potential gifts

Eﬀicient shopping 2 “Back in Stock” is a good category to have. Users can check for previously sold out items here

29 PRODUCTS LIST PAGE Positive Negative

Product images 1 1 2 1 Big product images

On-product images 2 When users hover over the product images, it show them a product on-model’s image

Inflexible filters 1 The filters are radio buttons. Users cannot select more than one options

30 Nordstrom is a long-established department store which sells fashion wear for women, men, and children, home accessories, and beauty products. Nordstrom keeps up with the generation and market trends, by having eCommerce websites and mobile apps to connect between in-store experiences and online experiences.

31 NORDSTROM OVERVIEW

STATISTICS NUMBER OF BRANDS MOBILE APP SUPPORT REWARDS PROGRAM RETAIL STORES

iOS NORDY 37.2M 500 & TOTAL VISITS ON YES BRANDS JANUARY 2020 ANDROID CLUB

32 Positive Negative

HOMEPAGES Homepage Nordstrom's

Simple aesthetics Nordstrom has a simple aesthetics, with nice 1 typography and spacings. The simple yet informative categories is eﬀective Nordstrom’s Beauty Homepage Nordstrom’s 1

33 HOMEPAGES CONT’D Positive Negative

1 Omnichannel experiences 1 There is a section inside the beauty homepage where it informs users about connectivity with stores

Curated sets 2 The curation sets images shows the products of what’s inside, not the box or bag itself

1 White space 1 The use of white space could be improved

34 Positive Negative PRODUCTS LIST PAGE 1 2

Filters 1 Filters are diﬀerent throughout the categories and products are filterable like options in real life

Aesthetics 2 The aesthetics of category display was pleasant. 3 Texture is shown through product images

Omnichannel experiences 3 Easy toggle of pick-up in store filter

Product images 4 Big product images 5

Product images When users hover over on the product images, most 5 products shows users a image of the product’s texture

35 CVS Pharmacy is a retail pharmacy chain that also sells health and beauty products along with pharmaceutical services. Their eCommerce website and mobile apps allows customers to shop, refill prescriptions, book appointments, print photos, etc. As the term “drugstore makeup” is becoming more common, CVS Pharmacy was chosen the most favorite drugstore amongst millennials in 2017.

36 CVS PHARMACY OVERVIEW

STATISTICS NUMBER OF BRANDS MOBILE APP SUPPORT REWARDS PROGRAM RETAIL STORES EXTRA MORE THAN iOS 49.5M & CARE TOTAL VISITS ON 1,000 YES & JANUARY 2020 BRANDS ANDROID CAREPASS

37 1 Positive Negative

HOMEPAGES Homepage Pharmacy's CVS

Eye-catching promotions 2 1 Eye-catching promotion oﬀer for paid rewards program “CarePass”

2 Category with images 2 Displays category with related product images

Irrelevant icon 1 The icon for “My Orders” seems irrelevant

Confusing navigation 3 Pharmacy’ Beauty Homepage CVS Don’t understand what this is for. “Refill 2 Prescriptions” could be moved to global navigation for easier access

Consistency issues 3 No consistency with the header with diﬀerent pages of the website

4 Use of space 4 Although showing product images with category is good, the use of space could be optimized 38 PRODUCTS LIST PAGE Positive Negative

1 1 Filter recognition 1 Displays selected filters for user recognition

Too many options 1 Too many filter categories and options, it’s intimidating

Use of white space 2 Could optimize the use of white space for a cleaner design

39 INFLUENCERS

40 Harry’s is a men’s personal care products manufacturer that was founded in 2012. While Harry’s sell their products at retail stores and direct eCommerce website, they also have a subscription service where customers receive products by mail.

41 HARRY’S OVERVIEW

STATISTICS NUMBER OF BRANDS MOBILE APP SUPPORT REWARDS PROGRAM RETAIL STORES

1.5M 1 DRUG TOTAL VISITS ON NONE CORE BRAND JANUARY 2020 STORES

42 Positive Negative HOMEPAGE 1 1

2 2 Aesthetic 1 Simple, minimalistic header/navigation

3 Video introduction 2 Hero banner is a video of Harry’s product. It gives a quick video information of Harry’s products

Call-to-action 3 Inviting “Get Started” call-to-action button

Brand explanation 4 4 Since Harry’s is a newer product, it has a explanation of the brand on the homepage

Inflexible browsing options 1 No search bar. Not flexible to use if users are a search-first type of user

No user freedom 2 Users cannot stop the video 43 HOMEPAGE CONT’D Positive Negative

Aesthetic 1 1 Minimalistic but aesthetic category display

44 PRODUCTS LIST PAGE 1 2 1 Positive Negative

Product images 1 Simple product listings and product images

Product details 2 When users click on the search icon, it tells them the information about the product

3 Product placement 3 The placement of the product on the 2nd row is interesting

Unexpected icon 1 The search icon usually implies a search bar. For Harry’s, it shows information about the product

45 RECOMMENDATIONS

46 RECOMMENDATION

While Ulta Beauty has significant features with rewards program, online services, personalized experiences, and omnichannel experiences, the shopping experiences needs an upgrade to set them apart from the competitors. Ulta Beauty will need to upgrade their eCommerce website to oﬀer a remarkable online shopping experience like those shopping experiences in-stores. The eCommerce website seems to be a bit behind from most of the competitors. Here are some recommended actions Ulta Beauty should take to be more competitive:

1 Website Template 2 Product Images 3 Search Experiences 4 Navigation

All companies evaluated Big and high resolution Having filters for Simple navigation and had a horizontal navigation product images on the customers to filter out category images can allow with a vertical filter products list page is specific ingredients or customers to convey selections. This means that favorable. Big product concerns gives a more products. Currently, there customers are more used to images can show in-store personalized are many categories and that template. In order to information on the packages experience online. subcategories inside Ulta create a consistent which customers could Conscious shoppers are Beauty’s eCommerce eCommerce experience, it is convey more product becoming more popular website. This could be key to match with the real information with additional amongst the target simplified with merging world. text on the details page. audiences. categories and adding visuals for more a simple but aesthetic navigation look and experience. 47 CONCLUSION

48 Customers can browse and purchase beauty products from variety of stores and eCommerce websites. With Ulta Beauty carrying numerous brands, customers are able to compare products that are similar in one place. Having a easy to browse website, customers are more likely to complete their shopping at one place. Ulta Beauty has CONCLUSION strong omnichannel experiences that should have more light. From the competitive analysis, we were able to see some weaknesses Ulta Beauty had with their eCommerce website. Updating their eCommerce website will separate them from the competitors.