Introduction
One of the most widely known cosmetic retail companies, Ulta Beauty, Inc., started its journey in the market with the name Ulta3 thirty-two years ago and has undergone many changes and stages to adapt to ever-growing consumer demands. Name and brand have high value, but innovations are the only way to save a place in a competitive retail market. The beauty industry has complex challenges in the face of pandemics, shifting social standards and requirements toward cosmetic products. To ensure a prosperous future and transformation of the company, it is vital to combine internal research and development methods of innovation with external methods directed at cooperation with clients and competitors.
Innovations to Implement for Keeping Competitive Advantage and Viability
Every retail business struggles to adapt to the new reality and make the right choices in its development. World economies had to fight the COVID-19 pandemic’s consequences, which influenced every market. General aftermath, such as more conscious consumerism and lower purchasing tendencies, covered almost every industry. Cosmetics and beauty products have their specific challenges created by the pandemic. For example, studies show that demand for lip makeup products declined drastically because of wearing face masks (Xinyi, 2021). At the same time, mask-induced acne and mass lockdowns in which cosmetology services were unavailable evoked requests for products proposing professional skincare and treatment at home. According to Xinyi (2021), there is evidence of rising sales of eye makeup goods. Customers’ circumstances and their shifts have direct power over specific products’ consumption.
Another controversial issue for cosmetics-specialized businesses is the ability to avoid encouraging archaic beauty standards and be client-supportive. There are many discussions on the negative influences of makeup on self-esteem and mental health. Research shows that close to 90% of women think that makeup is a way to raise attractiveness, but less than 50% use makeup products because they enjoy it (Kuehl et al., 2018). The company’s future needs to be fluid in expanding and adapting product representation.
Even during the economically burdensome periods, Ulta Beauty keeps opening offline stores. The company successfully balances retail and e-commerce, which is its accent on a high level of expertise and in-store client experience (Maamoun, 2021). With this particular product category, clients feel the need to have a physical place to interact with experts, see and test the items in real life, not only virtually. Placing an accent on professionalism and expertise in the company’s niche might lead to stable future growth.
Strategic Alliances as a Method of Innovation
Market competitors of the company are not always its rivals. Sometimes there is a place for mutually beneficial partnerships between two or more companies of the same niche. As claimed by Ferreira et al. (2021), practice shows that more and more companies start forming strategic alliances to receive shared benefits. Companies can share research data and even production facilities to develop more diversified product lines and help each other broaden geographical boundaries. Using strategic alliances may help Ulta Beauty get at least double the informational and material resources needed for innovation.
Crowdsourcing and Social Media Sourcing
Even before the pandemic, the digitalization of the markets was obvious. When social media and e-commerce are inseparable parts of consumers’ day, it is nearly impossible to have a well-known company without a solid social media presence (Warokka, 2020). The clients’ demands and needs can create guidelines for the company’s innovation strategy. Bringing masses of consumers’ opinions and analyzing them might bring essential insights. Such insight can help understand consumers’ expectations for the company’s growth and perspectives. Another benefit of crowdsourcing is reinforcing buyers’ loyalty because people like to be heard and respected by businesses.
Using Internal Research & Development for Innovation
External sourcing may result in helpful information, but all the data must be carefully researched and analyzed. Not every consumer opinion and idea may have strong viability and potential for a good outcome. Recent studies show that internal R&D activities bring better innovation results when combined with external outputs and collaboration with allies. It is also worth mentioning that besides product innovation, the company needs to pay enough attention to its processes’ innovation (Anzola-Román et al., 2018). Among the main company’s priorities also should be control of implementation of innovations and the market’s response to them. Every innovation needs careful testing and sometimes undergoes a few stages of revision. Considering this, Ulta Beauty should concentrate on two following internal practices: widening the scope of research activities and implementing innovations in its organizational structure.
Conclusion
It is impossible to stop consumers’ demands’ constant development through transformation. For businesses, it also means non-stop evolvement needed to be able to serve the new requests. To ensure a positive future, the company might need to maintain and enhance the brand’s influence and presence in the market. Taking into account specifics of Ulta Beauty’s industry and history, among the most powerful methods to innovate for the company might be a collaboration of internal R&D with external methods like crowdsourcing, social media sourcing, and strategical alliances.
References
Anzola-Román P., Bayona-Sáez, C., GarcĂa-Marco, T. (2018). Organizational innovation, internal R&D and externally sourced innovation practices: Effects on technological innovation outcomes.Journal of Business Research, 91, 233-247.
Ferreira, J., Coelho, A., Moutinho, L. (2021). Strategic alliances, exploration and exploitation and their impact on innovation and new product development: the effect of knowledge sharing. Management Decision, 59(3), 524-567.
Kuehl, S., DeWild, S., Mai, J., & Yeng Yang, M. (2018). Is beauty only skin deep? Exploring the connections between makeup and perception. Concordia Journal of Communication Research, 5(1), 1–40.
Maamoun, A., (2021). Bold and beautiful: Ulta beauty thriving in the retail apocalypse.SAGE Business Cases.
Warokka, A. (2020). Digital marketing support and business development using online marketing tools: an experimental analysis.International Journal of Psychosocial Rehabilitation, 24, 1181-1188.
Xinyi, J. (2021). Challenges and opportunities for the beauty industry during the pandemic. Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry, 2018–2021.