Loyalty Programs for Cosmetics Shoppers Increase Sales
For many years, women who wanted quality makeup and perfume products had to endure the high-pressure sales pitch from the person behind the counter at upscale department stores. These days, women have less time than ever to shop for beauty products but doesn’t mean they don’t want access to a wide range of products. Several retailers have obliged time-pressed shoppers with new delivery models for cosmetics and they have found that tweaking marketing efforts such as loyalty programs makes a difference when it comes to increasing sales.
A recent New York Times article highlights the battle between retailers in the changing distribution model for cosmetics. Catherine Saint Louis’s research indicates that Sephora, often located in J.C. Penney stores, and Ulta, another national beauty supply chain have become favorite locations for consumers seeking shampoo, mascara and fragrance. Part of the battle for sales is connected to how well these retailers can convince suppliers to stock them with exclusive products. Another part of success is understanding the customer. NPD research indicates both firms have about the same market share, roughly 30%. The firm also believes shoppers are ‘fickle’ when it comes to sourcing their beauty supplies. But Ulta thinks it appeals more to a slightly older demographic. To maintain allegiance from this older group, over age 44, the company has found that loyalty programs work well. If Ulta’s strategy continues to succeed, it will be an interesting testimonial to the power of understanding the marketplace and engaging in the right marketing strategy.[Source: Saint Louis, Catherine. Can Ulta Muss Up Sephora’s Makeup?, New York Times, 7.22.09]