Ulta Beauty marketplace case study: book a demo to start yours
Ulta Beauty is a well-known beauty store chain in the United States that provides a wide range of cosmetics, skincare, haircare, and fragrance items, along with salon services. If you’d like to start your own marketplace like Ulta Beauty, you’re facing a buy vs build decision. So before you decide to build it in-house on top of Spree open-source, consider using Vendo, which is the feature-rich Enterprise Edition cutting your time-to-market to a few weeks.
Build vs Buy a marketplace?
The benefits of using open-source are numerous, including complete control and the ability to customize freely. However, these perks come with significant expenses. Crafting a fully functional marketplace solution is a lengthy and costly process, often spanning months or even years. This is a lesson we’ve drawn from various marketplace projects.
Unless you’ve secured a hefty amount of funding, opting for a pre-built, comprehensive marketplace solution like Vendo is a wiser choice, as advised by someone who has extensive experience in billing clients for marketplace development.
Back to the Ulta Beauty marketplace case study
Over the past few years, Ulta Beauty has exceeded expectations, thriving even amidst economic challenges such as the pandemic and inflation. This success is a testament to the enduring appeal of beauty and self-care products. The brand’s ability to attract customers with affordable luxuries like cosmetics and fragrances has been a key factor in its sustained foot traffic and sales growth.
Ulta’s expansion strategy has been aggressive yet effective. As of October 2023, Ulta operated 1,374 stores across the United States, reflecting a significant increase from previous years. This expansion includes opening around 50 stores annually, which has contributed to its widespread presence. Notably, Ulta’s increase in visits isn’t solely due to more stores; the existing stores have also seen higher foot traffic, indicating a consistent demand across its locations.
Ulta has strategically positioned itself as a top beauty destination for millennials and Gen Z, partly through collaborations with celebrities and social media influencers. The average Ulta shopper is younger than the general population, which aligns well with these demographic targets. Additionally, Ulta’s product range, covering various price points, allows the brand to cater to a broad spectrum of customers. This diversity in offerings helps Ulta to appeal to customers across different income levels, further broadening its customer base.
In the third quarter of fiscal 2023, Ulta Beauty reported net sales of $2.5 billion, up from $2.3 billion in the same quarter the previous year. The comparable sales increased by 4.5%, primarily driven by an increase in transactions. This performance exceeded internal expectations, and the brand witnessed a significant expansion of its loyalty program, now boasting over 42.2 million members. This growth indicates strong brand loyalty and customer engagement.
How to emulate Ulta Beauty marketplace success?
To follow in the footsteps of Ulta Beauty’s success, think about quickly launching your marketplace, opting for weeks over months. Make sure your product catalog aligns with your audience’s preferences and continually adjust your methods for attracting customers, drawing on actual outcomes.
Test the market before making a full commitment to build it.
Here’s what you’d be getting with a Vendo free trial:
- Book a marketplace demo call: We’ll set up your demo marketplace and populate it with products, so you could give it a try and start selling in 14 days
- Customize your Storefront: Use the drag & drop page builder or custom CSS
- Onboard Brands: Invite your brands or choose brands from our catalog
- Select Products: Curate products and collections manually or automate it
- Embed products: Make your content, newsletters, social media shoppable
- Get Paid: Get paid as soon as products are shipped by the brands
- End-to-end automation: Brands sync, fulfillment, payouts, invoicing, taxes
When you’ve tried all that and it works, start thinking about building your own, custom-made marketplace project based on Spree Commerce. First, by decoupling the storefront and going headless with Vendo marketplace API, and later with your own backend, if you decide you really need it. Just lift and shift the storefront.
Nobody has to know what’s under the hood, right?
