The beauty category is famously resilient during a recession, as consumers splurge on little luxuries. In the recession of 2009, global sales of lipstick grew 1% despite a broader pullback in consumer spending.
But the new recession sparked by the pandemic is different, not least because countermeasures against the coronavirus encourage consumers to stay home and to cover their faces when they do go out.
Cosmetics chain Ulta Beauty Inc. has shifted tactics in response, but it hasn’t been easy going so far. It temporarily shuttered its 1,264 stores March 19. And though more than 90% of its stores had reopened their doors to in-store shopping by late July, 19 will permanently shutter this year, the company said. It plans to open 30 new stores this year, about half as many as previously planned.
During the three months ended Aug. 1, Ulta’s net sales, which strip out coupons and expected product returns, decreased 26% compared with the equivalent period a year earlier, to $1.2 billion from $1.67 billion.
Ulta is hoping its first new TV ad campaign since March will get consumers thinking about beauty and back into its stores that are open. The ad, dubbed “Where Dreams Begin” and set to uplifting music, features people dancing in their homes and in nature.
Ulta Chief Marketing Officer Shelley Haus talked to The Wall Street Journal about the rough months at the onset of the pandemic and the company’s steps to get consumers buying beauty products again. The interview has been condensed and edited.
WSJ: How did you rethink your marketing approach when you started closing stores and people were stuck at home due to Covid-19?
Ms. Haus: We became a 100% e-commerce business, and so we needed to think about it differently and lean more heavily into digital and social and we needed to think about cost containment. At the beginning of the pandemic, we launched a content series on email and social media called “Ulta Beauty at Home.” We were giving tips and tricks on how to touch up your hair color at home, do your own nails at home. Now we have a lot of content going out on the idea of wearing masks and what that looks like.
WSJ: Did you pull your TV ads during the early days of the pandemic? How did you work with the networks?
Ms. Haus: We aired a TV campaign for a week in March and then we pulled it right away the week of the 16th. So we had basically a week of TV running since the last holiday season. We moved some of our commitments from that half of the year, knowing we’d get to a point where we’d reopen stores and welcome people back. We spent the next couple weeks rethinking our marketing mix and shifting it very quickly.
We needed to have flexibility in both the channels we were in but also the flexibility to have messaging change. We are negotiating for much more flexibility closer to programming air date.
WSJ: You’re about to launch a new TV ad. How are you using the ad and medium to sell products?
Ms. Haus: It’s not an ad that’s a showcase of product. To us, this particular medium and messaging is about our point of view and that these are human connections. We also have variations that are 15 seconds that lean more heavily into “nourish your skin and spirit,” and 15 seconds that lean more heavily into makeup and self-expression.
Our intention here was to continue to expand our “beauty for all” story. You’ll see not just females, but males, transgender people and differences in age, race, body type.
WSJ: Consumer habits were already trending more toward skincare than makeup. Covid presents new challenges for the makeup category. How do these trends affect your marketing approach?
Ms. Haus: People aren’t out and about having parties. However, in makeup there’s still the need for many people to be camera ready. People are putting on makeup, they are doing their hair, and it feels like self-expression and a little bit of normalcy and fun and joy.
And we’re leaning more heavily into skincare, connecting with self-care more than ever before and we’re still leaning into things like do-it-yourself topics like manicures and hair and skin masks.
WSJ: Why launch a new campaign now and why rely on TV, versus your existing digital channels?
Ms. Haus: It’s a time of importance for two reasons. It’s the changing of the season—it’s normally a time when people think about clothing and beauty—in addition to where we are as a country now, and feeling like this is the right message at the right time.
We’re using a broader marketing mix now that we have stores back open and that definitely includes TV. We know from marketing mix over past years that TV is a very effective medium and delivers emotion.