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Beauty Brands Invest to Power ‘Digital Store of the Future’

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As sales of beauty products continue to recover from the lows seen at the height of the pandemic, Ulta Beauty’s investments in new tools and omnichannel capabilities suggest that the future of cosmetics is, if not completely online, very dependent on digital infrastructures.

Among the new initiatives, announced earlier this week at Ulta’s investor day is a partnership with Google that will see the beauty retailer’s GlamLab virtual try-on tool for lipstick and eyeshadow integrated within Google Search and YouTube.

The move with Ulta follows a partnership Google forged with beauty technology company Perfect Corp. earlier this year to roll out augmented reality (AR) try-ons via Google Search. The virtual try-ons through Perfect Corp. are incorporated directly into the search experience, allowing consumers to digitally try on beauty products from Black Opal, Charlotte Tilbury, MAC Cosmetics and Estee Lauder, among three dozen others.

Read more: Perfect Corp Teams With Google to Help Consumers Virtually Try on Makeup

Ulta is also investing in and partnering with artificial intelligence (AI)-powered retail technology company Adeptmind to power a new personalized search engine for Ulta’s “digital store of the future,” a rebrand of the company’s digital shopping experience.

Chief Digital Officer Prama Bhatt said during the company’s investor day that Ulta has been focused on growing its digital business, while “driving loyalty through personalization” and delivering omnichannel experiences.

“The new digital store is where we seamlessly merge content with commerce to help guests find what they are looking for, and introduce them to products and services they didn’t know they needed,” Bhatt said, noting the company’s “unmatched source” of personalized beauty information. “It will make shopping and exploring for beauty online even more fun and functional, and with our new design system, we can create culturally relevant and inspiring content and experiences.”

Health and personal care stores saw a 1.4% decline in sales last month, according to the U.S. Commerce Department, even as retail sales overall increased by 0.7%.

CEO Dave Kimbell said in a statement that Ulta has “a long record of disruption, creativity and success” that is helping it connect its physical and digital channels. “We are optimistic about the opportunities ahead and believe the power of the beauty category paired with our proven business model, experienced leadership team, and values-based culture positions Ulta Beauty to continue to deliver long-term value,” he added.

Ulta is projecting that over the next three years, net sales will grow by 5-7% and comparable sales will grow 3-5% annually. The retailer plans to open 50 stores per year through its 2024 fiscal year.

Speeding up Delivery 

Among the other efforts unveiled by the beauty retailer included a new commitment that buy online, pick up in-store (BOPIS) orders will be ready for pickup within two hours or less, and the launch of same-day delivery in several markets. Ulta did not disclose where same-day delivery would become available or the amount of any potential delivery fee.

PYMNTS research has found that 42% of digital shoppers say the ability to pick up orders curbside or at the store would encourage them to shop more often at brick-and-mortar stores. After the onset of the pandemic, 14% of consumers used BOPIS and 71% opted to have their purchases delivered.

See also: ‘Buy Now, Get Now’ and ‘Buy Now, Get Later’ Add New Dimensions to Bring-It-to-Me Economy

Also: Digital, Physical Commerce Merging Into New Shopper Experiences

Last week, LVMH-owned rival Sephora launched same-day delivery of makeup, hair, skincare and other beauty products online or through its mobile app for a $6.95 fee. Orders are filled by in-store associates and are then given to a courier for direct delivery to customers.

Sephora first offered same-day delivery in as quickly as one hour through a partnership with Instacart that started in September 2020.

Read more: Same-Day Delivery Now Available at Sephora 

Ulta’s Bhatt said at the investor conference that shoppers are increasingly expecting fast service and respond well to it, in line with PYMNTS’ research that shows consumers make decisions about where to buy based on how soon they need the item.

“That improved speed really gets the products in their hands at the speed of beauty,” Bhatt said. “We think that’s going to be an important differentiator as we go forward.”

Related news: Ulta ‘Focused on Playing Offense’ as Beauty Industry Recovers

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