Introduction
Ulta Beauty is a successful American cosmetics company that has balanced the externally attractive and attention-grabbing displays with ongoing revenue sources and employees’ best interests. The company successfully identified the priorities of American women purchasing cosmetics despite its lack of outlets in major shopping malls. Ulta has entered several collaborations with prominent cosmetic and salon brands to provide trendy, innovative items. Ulta Beauty’s product assortment was kept fresh and relevant to customers by a dedicated merchandising team that kept track of current fashion trends, historical sales trends, and new product launches.
Background Information
Richard E. George, the former President of Osco Drug, Inc., and Terry Hanson launched Ulta Salon, Cosmetics, and Fragrance. In 1989, George quit his job at Osco and began developing a business plan for what would eventually become Ulta Cosmetics. The supposed unique selling point was based on the hybrid approach to pricing, suggesting both high-priced and low-priced options for the catalog. Other Osco executives joined George and Hanson’s endeavors, and they raised $11.5 million through venture funding prior to the official launch of the Ulta company in 1990. Since then, the company has been rapidly expanding, with the hybrid approach securing its appeal to a wide market. As of 2016, the firm included 874 stores located throughout the U.S.
As stated above, Ulta Beauty’s range of products is diverse within its pricing approach, yet the company’s goods may still be categorized successfully. The firm primarily sells colored cosmetics and, therefore, heavily relies on fashion trends. Since cosmetic products are luxury goods, the industry generally showcases instances of high elasticity of demand. This notion concerns both the purchasing capacity customers are willing to extend toward beauty shopping and the lack of consistency in their tastes. The industry itself factors brand power and social media marketing into its operational management. Therefore, it is not surprising that Ulta Beauty has invested heavily in online promotion, establishing social media accounts on Instagram and Twitter.
Ulta’s premium brand price was comparable to that of other retailers. It was likely that beauty stores chose to follow the makers’ suggested retail prices for luxury products. Offering distinctive complimentary gifts was a way for Ulta to stand out and entice customers to buy premium items. Customers who purchased Clinique, Calvin Klein, or Bvlgari items, for example, received complimentary presents. The price information for mass-market brands is accessible and instrumental in developing a rounded understanding of a company’s financial program. According to the statistics, Ulta’s average unit pricing was around 9% lower than that of drugstore shops but approximately 26% higher than that of big-box retailers. Ulta used discounts, promotions, and coupons to entice buyers to buy from them, believing their customers were price sensitive. To promote sales and counteract pricing discrepancies at Target, for example, “buy one, get one 50 percent off” was provided on cosmetics from Covergirl and Maybelline.
Decorative cosmetic products are naturally notable, and Ulta Beauty’s assortment demonstrates a great talent for diversification. Ulta Beauty’s products include multiple colors and shades as one of their selling points, and the marketing campaigns reflect this emphasis on variety. The firm also sells skincare products, bath products, and hair products, further establishing it as an industry leader. Despite new entrants, market volatility, and trade regulations consistently threatening Ulta Beauty, the firm upholds its commercial and personal promises.
The beauty industry is a competitive and fragmented commercial field, particularly today when the COVID-19 pandemic has reduced the sums people would have as their income or savings. Department stores, specialty-focused retailers, duty-free airport shops, high-class cosmetic boutiques, and even pharmacies might be considered influential, at least to a certain degree. To secure a competitive advantage and follow the aims of its mission, Ulta Beauty fosters engagement with two diverse consumer demographics (David et al., 2021). Hence, the firm’s target audience includes either beauty enthusiasts without caveats or financially constrained beauty enthusiasts (Watanabe et al., 2018). A single-brand entity without corporate ties to multinational organizations should expect complications when competing against the well-established giants of the industry
The inevitable clashes between human resources specialists and the budgeting department are not worth additional analysis. Ulta’s associate engagement score of 80% was in the top 25% of the world, and it was higher than the retail industry standard of 72% (Amberg & Fogarassy, 2019). Ulta was committed to investing in their employees’ development and providing possibilities for progress. They used a mix of existing managers, promoted staff, and outside hires to support additional stores. The overall trend, later apparent from the visualization of the current statistics, demonstrates the author’s rapid increase in productivity as of 2021.
From the standpoint of vision and mission, it becomes apparent that Ulta Beauty intends to fully satisfy the complex personalities of modern customers. As the trend of responsible consumption grows stronger, experts identify the beauty industry as one of the most affected. Ulta Beauty’s mission lies in delivering high-quality beauty products to its customers, with every interested person being allowed a small sample of a product and a free trial if a person shows up earlier. The firm is clearly successful in establishing and upholding a well-diversified approach within its field. Said strategy is influential in its successful competition against other well-established brands within the cosmetics sector, namely Sephora and a range of branded outlets, such as MAC and L’Oreal shops.
Graphical Representations of Data
The author constructed the graph above through the Excel program tool for scatter plot design, with the highest stock prices for Ulta Beauty being taken into account and measured against time. The data set involved the information collected on a daily basis over a one-year time period. Within the outlined time period, it is evident that the absolute peak of the stock prices occurred on the 11th of September 2021. Hence one might speculate that the company is currently experiencing its best year yet in terms of revenue and other factors that influence the stock price positively (Kosasi, 2015). It is appropriate to speculate that this may be in part due to Ulta Beauty’s efficient use of online platforms and social media marketing that allowed them to move the sales fully online during COVID-19 restrictions.
The graph was constructed through the Excel program tool for scatter plot design, with the lowest stock prices for Ulta Beauty being taken into account and measured against time. The data set involved the information collected on a daily basis over a one-year time period. Within the outlined time period, it is evident that the absolute lowest point of the stock prices occurred on the 15th of November 2020. Multiple factors may have contributed to the significant decrease in the stock prices, including the financial uncertainty of the main market participants and their expectations regarding the possibility for future growth of assets.
The above histogram demonstrates the frequency and distribution of the adjusted closing stock. The variable refers to the amount of unsold stock for a business at the end of a specific day of trading. Raw materials, products in processing (WIP), and finished items are considered parts of the adjusted closed stock. This variable is essential in performing Ulta Beauty’s performance on the stock market, the degree of its attractiveness for investors, and the overall corporate profile of the firm’s financial year.
Stock trading volume refers to the number of company shares exchanged between sellers and buyers within the span of one trading day. The trading volume of securities that are a part of active operations is higher, and the trade volume of securities that are not is comparatively lower. As prices change more frequently with a higher volume of activity, investors can use a security’s tick volume, or the number of price changes in a contract, as a surrogate for transaction volume (Aalborg, 2018). The active market has the capacity to sabotage the investments into Ulta Beauty, while an overtly stable one is unlikely to deliver substantial profits. The chart, in particular, represents the distribution of numeric values of the stock trading volume variable within the set period of time. The data includes the inputs for the period between the 27th of August 2020 and the 27th of August 2021.
Descriptive Statistics
The author has calculated the statistics for these four variables through the Excel functions, such as AVERAGE and STDEV. It showcases that every variable in question maintained several modes, with the volume of trading maintaining the biggest one (Csorba & Boglea, 2016). This observation makes sense but is primarily related to the successful running of Ulta Beauty that, based on the ongoing changes, would need to navigate a firm’s corporate and financial accounts.
The greatest numbers detected unsurprisingly belong to the trade volume column, indicating the perpetuating interest customer base has for the product in question. Elements of mode, median, and mean are used in statistics to determine the most frequently repeated numeric values, the averages of the numeric values, and the values themselves.
Reflection and Conclusion
Ulta Beauty has been steadily improving its financial performance since 2016 as the partnerships with the company’s suppliers and the alliance with the local authorities grew stronger. The end of 2021 brought a spike in a company’s commercial success, with profits and stocks growing continuously. The journals Fortune and Forbes published highly favorable reviews of the company’s performance on the market. Ulta’s market capitalization has already surpassed that of Macy’s, Nordstrom, Whole Foods Market, The Gap, Tiffany, and Kohl’s, according to Fortune. Ulta Beauty does not intend to engage in drastic financial acquisitions or other financial transformations, with the company successfully turning in a profit and delivering value to a loyal customer base. In conclusion, the firm has occupied its own niche on the market by providing beauty enthusiasts and financially constrained beauty enthusiasts fashionable cosmetics products. Its willingness to offer items from different price categories improves the accessibility of the brand and allows it to cover a larger target market than some of its key competitors.
References
Aalborg, H. A., Molnár, P., & de Vries, J. E. (2019). What can explain the price, volatility and trading volume of Bitcoin? Finance Research Letters, 29, 255-265.
Amberg, N., & Fogarassy, C. (2019). Green consumer behavior in the cosmetics market. Resources, 8(3), p. 137. Web.
Csorba, L. M., & Boglea V.A (2011) “Sustainable Cosmetics: A Major Instrument in Protecting the consumer’s Interest”. Regional and Business Studies, 3(1), pp. 167-76, Web.
David, F. R., David, F. R., & David, M. E. (2017). Strategic management: concepts and cases: A competitive advantage approach. Pearson.
Kosasi, S. The maturity level of information technology governance of online cosmetics business. In 2015 3rd International Conference on New Media (CONMEDIA) (pp. 1-6). Liu, M., Lee, C.C. and Choo, W.C., 2021. An empirical study on the role of trading volume and data frequency in volatility forecasting. Journal of Forecasting, 40(5), pp.792-816, Web.
Watanabe, N. M., Kim, J., & Park, J. Social network analysis for Sephora and Ulta Beauty: a use of eco-centred and whole network analysis. In 2018 Global Marketing Conference at Tokyo (pp. 274-274), Web.