Stay relevant, stay beautiful

Until twenty years ago, for prestige cosmetics, customers in the US would always head to Macy’s or Nordstrom. To buy products of P&G and L’Oreal, customers would go to a Walgreens or some such drugstore. And for professional hair care products, they would go to a salon. When Ulta, a specialty beauty retailer was launched in 1990, it brought them all under one roof—prestige, mass-driven and salon products. The chain today has 675 stores all over the US and plans to increase that number to 1,200 stores over the next few years, with each store stocking about 20,000 products.

Eric Messerschmidt, Vice-President, marketing strategy, loyalty and CRM at Ulta says, the store, over the years, has cultivated over 13 million loyalty customers. Every time the customers came in and shopped, the outlet captured data on how much they bought and kept track of the coupons they redeemed. Events such as its ‘21 Days of Beauty’, that is on at present, have added to more data points.

To make its marketing efforts a success, the company had to obtain data, learn from it, develop relevant content and send it via the right channels. “Once you know customer behaviour, and know what they need, we need to stimulate them with the right message so that they come to the store and buy. The concept seems easy, but implementation is not that easy,” says Messerschmidt. Ulta’s data gave them this edge.

It had pockets of information about customers in separate databases – e-commerce, merchandise, loyalty, you name it they had it. The problem was that all the data was sitting in separate databases across seven systems and 38 data feeds. “It was not so easy. Three years ago we did not have an in-house analytics team,” says Messerschmidt.

Ulta’s approach was one size fits all. The problems resulting from that were manifold. If you did not analyse data properly, you could not deliver the relevant content. Investing in tools such as the Adobe Campaign helped address those problems as it aggregated data from diverse databases in one central source. By customising content, Ulta could send loyalty members monthly statements through e-mail that were personalised to indicate their membership status and what they could do to accumulate bonus points. In case the e-mail bounced, members would automatically get a direct mailer. For birthdays, members could automatically double their bonus points by shopping within thebirthday’s month.

“We also started targeting our customers more sharply,” says Messerschmidt.

For instance, if a brand such as Bare Minerals wanted to run an aggressive promotion by offering 40 per cent off, it would not want to target the entire membership base as it would result in a lot of wastage. “So we fine-tuned and targeted particular audiences.”

The company could also test the response by segregating the customers into controlled groups. Because of relevant targeting, Messerschmidt claims that there has been a drastic improvement in the number of e-mailers sent out.

The e-mail deliveries went down by 17 per cent and sales per delivery went up by 141 per cent. “We had doubled the revenue from our e-mail campaign with fewer e-mails,” he says.

The writer was at the Digital Marketing Summit at the invitation of Adobe.