In an effort to bolster its digital operations, including improving the personalization it offers consumers on its website, Ulta Beauty has bought two technology companies.
The retailer, No. 91 in the Internet Retailer Top 1000, said at its analyst and investor conference last week that it has acquired QM Scientific and GlamST—two technology startups in artificial intelligence and augmented reality. QM Scientific operates an artificial intelligence-powered shopping assistant. The vendor’s technology learns each individual customer’s preferences and habits over time, enabling devices, apps or bots to respond to shoppers with relevant and timely answers and suggestions. GlamST offers mobile, web and in-store virtual makeover tools that use augmented reality. Augmented reality superimposes images over real-world objects through device cameras. Ulta didn’t disclose the purchase prices for the two companies.
The retailer also told investors and analysts that e-commerce sales grew 42.2% for the third quarter of 2018. Ulta will release its full Q3 earnings results on Dec. 6.
Other notable details from the conference include:
- Purchases from its Ultamate Rewards loyalty program members now account for more than 95% of its total company sales. In 2017, Ulta grew its active loyalty members by 18.8% to reach 27.8 million active members. It now has around 30 million active loyalty members.
- Mobile now accounts for 54% of total e-commerce sales, up from 46% a year earlier.
- Ulta plans to deliver all online orders within two days by 2021. To achieve this, it plans to open an e-commerce-specific fulfillment center next year that can fulfill 30,000 orders per day, hold approximately 25,000 SKUs and is smaller than other fulfillment centers at 175,000 to 200,000 square feet. It also plans to launch ship-from-store in select stores next year to help it speed order delivery.
- Ulta plans to open 80 stores in 2019, 75 stores in 2020 and 70 stores in 2021. As of November, Ulta operates 1,163 retail stores across all 50 states
Earlier this year, Dave Kimbell, chief merchandising and marketing officer for Ulta, told Internet Retailer that omnichannel customers—meaning customers who engage with a retailer in more than one channel—spend 2.7-times more than its store-only shoppers. Kimbell also says Ulta’s new “store-to-door” capability makes all products accessible all the time to shoppers by enabling store associates to order and ship items that are sold out in stores or only available online. “This solution is ramping up faster than expected and satisfying a strong demand for online-only brands that aren’t yet available in all stores,” Kimbell said.
Ulta’s app allows shoppers to access digital coupons, product reviews, use voice search or virtually try on makeup through a feature called GLAMlab. Ulta didn’t say in its investor’s day presentation how it plans to use the newly acquired augmented reality technology from GlamST.
Ulta isn’t alone among beauty retailers in using augmented reality to try to drive more sales. Hair color retailer Madison Reed last month launched a new try-on tool that uses augmented reality and a consumer’s device camera to help a shopper determine if a potential new hair hue will look good on her. Visitors to Madison-Reed.com can use their phone—or any device with a camera—to see a lifelike simulation of themselves with a new hair color. For the camera shy, a selfie will work too, Madison Reed says.
Madison Reed is using technology from Perfect Corp.’s YouCam Makeup, which is known for its downloadable augmented reality apps. But for Madison Reed, the tool is embedded in the hair color retailer’s website. Consumers can use the tool with their smartphone, tablet or desktop computer, Madison Reed says.