Market Analysis and Target Market of Ulta Beauty

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Ulta Beauty
Introduction and Company Overview
Ulta Beauty is a US-based beauty company that focuses on providing beauty products and services all in one place (Ulta Beauty, About ). It was established in 1990 and since then, its success has been driven by its mission, vision, and values. Its mission is to “use the power of beauty to bring to life the possibilities that lie within each of us- inspiring every guest and enabling each associate to build a fulfilling career (Ulta Beauty, About).” This mission is not only focused on its clients but also on its employees and associates. Its vision is “to be the most loved beauty destination of our guests and the most admired retailer by our Ulta Beauty associates, communities, partners and investors (Ulta Beauty, About).” Similarly, its vision is not only focused on its clients but also on its employees as well as partners, investors, and the community at large. The values that guide Ulta beauty include doing what is right, championing diversity, winning together, improving, and giving wow experiences (Ulta Beauty, About). As a result, it has been able to serve over 33 million customers and create over 22,000 new job opportunities. It also operates over 45,000 stores to serve its clients.
Current Market Analysis
Ulta Beauty’s current target market in the US comprises beauty enthusiasts. As the company reveals, its value proposition involves providing all things beauty, all in one place to serve a community that is representative of all genders, ages, and skin tones (Ulta Beauty, About). To arrive at this, the company had to decide the characteristics of its target customers. According to Dolnicar, Grun, and Leisch (p.20), deciding the characteristics of the target market helps an organization determine its ideal target market. For Ulta Beauty, the ideal target market is characterized by beauty enthusiasts, who are not afraid to redefine beauty for themselves and express it authentically regardless of their age, gender, and skin type. Beauty enthusiasts contribute to 57% of Ulta Beauty shoppers (Ulta Beauty, 2022 Annual Report p.3). Thus, its target market comprises men and women who perceive themselves as beauty enthusiasts and need access to beauty products and services at one stop. They are deeply emotionally connected with beauty (Ulta Beauty, 2022 Annual Report p.3) and they value convenience and self-care routines.
Ulta Beauty’s product offering allows it to target a wide range of customers of all ages and multiple demographics (Ulta Beauty, 2022 Annual Report p.3). Most of Ulta Beauty’s target customers are aged between 18 to 29 years and account for about 45% of US consumers, although there has been a shift towards teen shoppers who now account for 22% of Ulta Beauty shoppers, as shown in figure 1 (Statista). Also, Ulta Beauty’s consumers are primarily women who are offered a wider range of beauty products including skincare, haircare, nail care, and makeup products.
This specific target market is more in sync with beauty and beauty products and is willing to spend a significant amount of its income on beauty. Beauty enthusiasts account for about 77% of spending in the US beauty category (Ulta Beauty, 2022 Annual Report p.3). They are not afraid to express who they are and are willing to discover different ways through which they can show their beauty and authentic selves (Ulta Beauty, About). This makes them an ideal target market for Ulta Beauty.
Figure 1: Share of Ulta Beauty’s Consumers by Age
Source: Statista
Culture
The major cultural factors that affect the decisions of Ulta Beauty in the market include the class system, racial diversity, and religion. People from the upper class will purchase different products from those in the middle and lower classes. Ulta Beauty has recognized this factor and considers class system and income levels as the most significant factors to consider when selling their mass, prestige, and premium products (Ulta Beauty, 2022 Annual Report p.18). Another factor to consider is racial diversity. Ulta Beauty has focused on people of different skin types and tones (Ulta Beauty, 2022 Annual Report p.3) meaning that it incorporates the needs of white people and people of color. This is an important factor to consider because the US is a highly diverse country with people of different races and cultural practices and their approaches to beauty and beauty products, as well as their beauty needs, are different. Another cultural belief to consider is religion. In a highly diverse country, people have different religious beliefs that influence their choices in beauty products and cosmetics. According to Hasibuan, Nasution, and Siregar (p.239), beauty companies are now considering how religion influences their target market, especially among groups that value clean and halal beauty and cosmetic products. If Ulta Beauty fails to consider religion, it might lose the group of consumers in its target market that is conscious of the role of religion in their beauty choices and purchase decisions.
Generally, Ulta Beauty serves a wide target market and can meet the needs of various market segments ranging from consumers interested in high-end premium products to those that are price-sensitive. Its customers have a positive attitude towards beauty and beauty products because they are beauty enthusiasts (Ulta Beauty, About). These consumers are willing to experiment with beauty products as they are on a discovery journey. However, Ulta Beauty’s target market primarily bridges two generations namely Generation Z (Gen Z) and millennials. As indicated in figure 1, the majority of its clients are aged between 18 to 30 years and as such, they encompass both Gen...