Think in-store is dying? Check out Ulta Beauty

In-store can still work well, but experience must reign supreme.

makeup cosmetics
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What has Ulta Beauty figured out that still eludes so many brick-and-mortar retailers? That in-store is about the experience and that brick-and-mortars need to deliver services and goods in a way that e-tailers cannot. By their very nature, e-tailers have the advantage on price, convenience and inventory range — and same-day delivery is starting to give some an edge on speed. Physical stores must deliver unique and compelling experiences or they simply can't win customers over in the long term.

Longtime readers of this blog know that this is a familiar refrain, where we point to physical efforts that don't deliver meaningful value — consider Target's curbside pilot — along with those that do, such as Chili's tablets, Prada's shoes and integrated shopping malls. This week's example comes from the world of beauty, and it's a beautiful thing when physical stores do what they were designed to do.

A very interesting Wall Street Journal profile of Ulta points to the chain's plan to "add 40 stores, part of plans to increase by 100 this year to more than 970 stores. It stocks both mass brands like CoverGirl and Maybelline, which women typically buy at drugstores, as well as prestige brands like Lancôme and Clinique, which typically require a trip to a specialty or department store. Three quarters of Ulta shoppers spend 15 minutes or more in the store, the company says, and 20 percent spend 30 minutes or more. Stores have hair salons and many also have facial stations and 'brow bars' for eyebrow waxing."

The story also noted that store locations are chosen with an eye on additional convenience, with locations typically in strip malls, where parking and store access is generally much easier than in a large mall.

The magic here, though, is in all of the store-required elements: getting a facial, testing fragrances, trying on different lipsticks with friends, etc. Associate training is also key. For this chain to survive, it needs to offer a better overall experience than online rivals as well as chains such as Macy's, Sephora's and even sections of drugstores and big-box retailers.

By being focused on one area and then offering expertise and depth of inventory choices — especially something as sensorially oriented as makeup and perfume — it becomes a destination. The environment is closer to a spa — a pure experience outing — than to a typical retail store. Sorry, Walmart and Target, but if shoppers can also buy a washing machine, a couch and a car battery, it's hardly a specialized experience.

Ulta is achieving its goal of being a destination for fun and friends. Just like Starbucks, it becomes a place where shoppers want to go, rather than being a shopping chore.

The takeaway from all of this is not to push cosmetics. It is to look at your own lines of products and to figure out ways to make it engaging and attractive. Move auto parts into an outer area and allow people to drive their cars into a showroom-like area and see what fits and works. Have associates there to install and make good recommendations.

Note that I said "good recommendations." Some chains that I won't mention (*cough* Best Buy) have tried to get associates to make recommendations, but their training is so thin that the suggestions are just as often bad as good. Customers and social-media-fueled word-of-mouth does wonders for your reputation, good or bad. One reason Ulta does well is that its people truly do understand its products and can make useful suggestions. Not to mention doing it in the middle of a facial.

Forget car parts and makeup. This could work with almost anything. Selling those washing machines? Invite shoppers to bring dirty clothes and split the load between two machines they are considering. Let the results dictate the sales. Why does Home Depot do so well? Its associates are very well trained (they often are hired already well trained, being licensed plumbers, electricians and carpenters). It also throws in just enough services — care to have your blinds cut to a custom size, or to see a digital representation of your room with five different pain options? — to make it an experience.

This won't work with all products — sorry bookstores — as some products are truly better sold online. Don't fight that reality. Instead, just everything else to create powerful experiences. In-store isn't dead, unless unimaginative store managers kill it.

Copyright © 2016 IDG Communications, Inc.

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