At a time when you can have a plethora of options anywhere you go, from Walmart and Target to pushing a button and having things delivered to your doorstep, is it really a unique experience to be able to have a variety of products from different sectors of beauty in one place? The answer is obviously no; however, I think Ulta does a good job offering a unique selection of items, from things you could get at the pharmacy or grocery store to things you’d find at Dillard’s or Saks, with many other choices in between. This differentiation allows the store to cater to customers with different budgets, ages, and interests.
Chapter 5 discusses differentiation as a business-level strategy in which a company creates products or services customers perceive as unique and valuable. For Ulta, I don’t think the differentiation comes from simply having a large selection. Instead, it comes from the range within that selection and the ability to serve different types of beauty consumers within the same store. Even more importantly, those categories don’t necessarily represent completely different customers. The same person who buys a $10 mascara may also spend $50 on foundation, $100 on hair products, or $150 on a fragrance (Spoiler alert: that person is me). Ulta doesn’t require its customers to choose between being a budget-conscious shopper and a prestige beauty shopper. In fact, I’d argue it encourages shoppers to avoid being so polarized and to enjoy the best of both worlds, which I think is a unique type of differentiation.
Consumerism tends to push the idea that the more you spend, the better the product will be, which is true in some, but not all, circumstances. A higher price tag in a fancier store- your big-brand department stores: Macy’s, Dillard’s, Nordstrom- means you pay for the product as much as the experience. A store like Ulta offers that same experience, but you can choose not to buy the high-ticket item, or compare it to its TikTok-sworn “dupe” version and decide in real time what you spend your money on. That also gives Ulta an interesting advantage in perceived value. A customer doesn’t necessarily have to see Ulta as expensive or inexpensive. Instead, the customer can decide where to spend and where to save. Someone may walk into the store intending to purchase a prestige foundation and leave with a drugstore mascara because they believe the less expensive option performs just as well. Another customer may do the exact opposite.
Now, just offering a variety of products is not enough to corner a market. Stores like Walmart and Target offer variety at affordable prices. Sephora offers a lot of the same products as Ulta and has a very similar business model. Department stores offer a unique shopping experience because you can buy beauty, clothes, home goods, shoes, and more all in the same place. So what sets Ulta apart from all of these places? I think the answer here is in their slogan, “all things beauty, all in one place.” There isn’t just product variety here; there are also salon services, professional products, and tools, which is unique amongst major competitors.
I think Ulta’s differentiation is strongest when all of these pieces work together. Any competitor can offer a large selection of products, run a sale, create a loyalty program, or offer beauty services. What is harder to replicate is an experience where a customer can get their hair done, receive a professional recommendation, compare a prestige product to its drugstore alternative, earn rewards on the purchase, and leave with everything that same day. Ulta’s variety is valuable because it gives customers options not only in what they buy, but also in how they experience beauty. In that sense, “all things beauty, all in one place” becomes less about how many products are on the shelves and more about how many different beauty needs can be met under one roof.
However, Chapter 5 also notes that differentiation carries the risk of competitors imitating what makes a company successful. As retailers continue expanding their beauty selections and services, Ulta can’t rely on variety alone to stay different. It must keep giving customers a reason to value how those products, services, price points, and experiences come together. So, is variety really the spice of life? I think it can be, but a cabinet full of spices doesn’t automatically make you a good cook.
Leave a comment