After over two-months of coronavirus-related shutdowns, all 50 states have, in some shape or form, re-opened. But as federal guidance on exactly how to restart business as usual is slim, the brunt of decision-making has been left to states and larger metropolitan cities such as New York City. This lack of counsel can be especially confusing for any national business with a large store footprint. And for those in the beauty category, which manage both retail and service-based operations, the proposition is arguably a minefield.
Though beauty founders and CEOs have come together to discuss coronavirus-related issues like reserving cash, and enacting furloughs and layoffs, re-opening plans have remained a lone company exercise. Case in point: In Atlanta, salon and spa owners have been left to their own devices to decide what is right for their operations, and some have resorted to borrowing standards from far-flung states, like New Hampshire.
No beauty-wide set of best practices for re-opening have been set. The National Retail Federation instituted its own set of guidelines for U.S.-wide store re-openings, but none of the recommendations — which cover curbside pick-up, social distancing and reduced occupancy — address beauty’s core issues like product trial and testing, services and sampling.
Still, Ulta is attempting to take make a beauty-wide impression. “We are the leader in beauty retail in the U.S. I think we need to be the ones helping set the standard of operating stores in this new environment and defining exactly what that looks like,” said Kecia Steelman, Ulta chief store operations officer and president of international.
The nuts and bolts
At 1,264 stores in 50 states, Ulta’s footprint is expansive, and its path to re-open is more difficult than, say, a one-off salon or store. But, Ulta has opened 300 stores and its Curbside Pickup program, which includes contactless delivery to one’s car, is available at more than 800 locations.
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Steelman said that the company has looked to guidelines from NRF, the Retail Industry Leadership Association (RILA) and grocery stores to craft Ulta’s Shop Safe Standards. It’s also layered in the advice of a team of medical experts and key beauty brand partners like Benefit, which spearheads Ulta’s brow and wax services. Ulta carries 25,000 products from 500-plus brands. Those guidelines include face coverings for all associates, display-only testers, more frequent cleanings and social distancing.
“We’re looking at it from the federal, state and local level, and looking at the information coming in from the CDC and John Hopkins, and then adding in our own filters,” said Steelman. “A state could be deemed safe to open, but a specific city might have higher cases of Covid [-19]. From a state perspective, Georgia has been open, but we just started to open stores there last week because we felt ready. We really are looking at each store [individually].”
The new frontline worker
Steelman added that during the week of May 24, Ulta will not be opening any additional stores. Once a store is ready to open, Ulta is giving associates that have been furloughed 10 days to two weeks notice. In many cases, the corporate team is more connected than ever with store associates, who ostensibly are driving which stores open sooner versus later.
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“Everyone’s dealing with different issues at home, with daycare or school, so we are working with employees. If they need reduced hours as they get settled, we are doing that,” said Steelman “Our general managers have been in constant contact with their associates, making dynamic spreadsheets of who is ready to come back and when.”
The treatment of retail employees, who are now on the frontlines of this pandemic, has been an issue that has reverberated in beauty and beyond. Steelman said Ulta’s staff have been instructed to encourage customers to wear masks in-store. Tactics include offering a store-supplied mask and, if it is not taken under advisement, suggesting Curbside Pickup or asking if a shopper has their own mask at home and if they can come back to the store at another time with said mask. But at the end of the day, if the consumer is resistant, Ulta employees have been told to step away and maintain a safe distance.
“We don’t want to put any of our associates at risk of some kind of a negative interaction. I’m sure you’ve seen what’s happening [with other stores] in the press, it’s shocking,” she said.
Steelman said working with Ulta’s associates is the only way the company is going to get the retail “business back on track.” Jefferies equity analyst Stephanie Wissink estimated that Ulta’s online sales are between 35-40% of total sales currently, versus 12% pre-crisis. Once stores fully open, Wissink expects that number to flatten to about 20%, meaning Ulta and shoppers want stores operational and safe in the long run.
The road to bring “play” back
But shopping for beauty might be less fun in the immediate future, especially if it’s as anxiety-inducing as going through an airport or as time-consuming as making a trip to the DMV.
Steelman said for the interim, Ulta is banking on the company’s GlamLab virtual try-on feature instead of in-store testers. GlamLab launched in late 2016, and in 2018, Ulta acquired GlamSt, the technology company behind GlamLab, and incorporated the live try-on feature within the Ulta app. Ulta’s chief digital officer Prama Bhatt said that, since mid-March, GlamLab usage has increased by nearly 5x, and 19 million shades have been tried on. While lip and foundation are two of the most tried-on categories (4,000 products are available on GlamLab), trials of hair color and lashes have been on the rise.
“We’ve been able to give customers a good understanding of what different colors and lash lengths look like. It’s fun, but it needs to be realistic, so its not gimmicky,” said Steelman. “Since our teams were on payroll, we were able to leverage what they could do behind the scenes that could increase the ability of brands to be on the platform. We added a year’s worth of content in the last seven weeks, and the GlamLab experience is better than when we went into this.”
Ulta has also added GlamLab signage throughout all doors — in tandem with language that testers are for display only. Associates in open stores are at the ready to encourage shoppers to download the app and play around with it while in physical locations.
Though Ulta has a way to go to fine-tune the experiential aspect of shopping for beauty, Melissa Gonzalez, CEO of The Lionesque Group and principal and stakeholder of MG2, said the company is on the right track.
“Environments will still need to inspire and educate, and give customers the confidence and assurance that they have found the perfect pigment, texture and/or shade while also being hygienically responsible. Augmented reality and lift and learn moments aren’t new integrations to the in-store experience, but will need to be more comprehensively designed into stores in the future. The challenge will be to keep stores feeling inviting and authentic while also maintaining a concerted balance of digitization and human interactions,” said Gonzalez.
Jodi Katz, founder of creative agency Base Beauty, agreed on this point, and said Ulta has the opportunity to mimic Amazon Go stores with its physical locations and app.
The bridge from retail to services
While GlamLab may not be a one-to-one solve for product testing, it is offering Ulta’s salons and services unprecedented learnings and is guiding which services it will open next.
Hair services are the only offerings open within Ulta’s doors currently, with brow services to be added in the coming weeks. Steelman said skin-care services are “further down the road,” until a process can be set that is safe and comfortable for the aesthetician and the customer. With hair services, both stylists and customers must wear a mask, plus the stylist wears gloves and salons only operate at 50% capacity. (Every other chair has been pulled out of salons.)
If a customer refuses to wear a mask that Ulta provides during a prospective service, stores are turning these shoppers away. But requiring masks for customers getting a facial is virtually impossible and makes the experience less inviting. Thus, Ulta is turning to brand partners to help guide this experience.
“The partnerships that we have with our brands is so important here. Our chief merchandising officer, Monica Arnaudo, is working really hard to understand what our brand partners think is right,” said Steelman. “In-store education, services and sampling have all changed. As we think about our business, we have to recognize that this very much affects their businesses too.”
