The Insights Blog

Ulta Beauty’s Prama Bhatt Shares Tips for a Customer Centric Organization

Ulta Beauty’s Prama Bhatt Shares Tips for a Customer Centric Organization

Written by Steve Boehler with special guest Prama Bhatt

There are very few companies that have enjoyed as much success over the past decade as Ulta Beauty.

As the largest U.S. beauty retailer and premier destination for cosmetics, fragrance, skin care, hair care and beauty services, Ulta Beauty’s growth has been truly remarkable. Recent revenue, profit, and earnings set company records, building upon an amazing streak that only had a modest dip during the pandemic. The company’s best-in-class loyalty program boasts more than 40 million members, and those members account for an incredible 95% of revenue.

Ulta Beauty has been recognized with a bevy of awards, a sampling of which include:

  • Forbes Best Large Employers (2021)
  • Forbes Best Employers for Diversity (2021)
  • Forbes Best Employers for Women (2021)
  • Diversity Inc Noteworthy Companies for Diversity (2021)
  • Fast Company Top 10 Most Innovative Companies in Retail (2021)

The company’s focus on customer centricity has been a key part of its success. To better understand it, we spent time with Prama Bhatt, chief Digital officer.

We have been lucky enough to have worked with a lot of great, very customer centric companies like Procter and Gamble, Microsoft and Starbucks. Very few companies are as customer centric as Ulta Beauty. What is it about the leading retailer that drives such amazing focus on its customers?

Prama: Well, it is an honor, Steve, to be able to answer that question actually. And to hear you position it in that way, I feel really lucky to be a part of this great company and team.

The key focus areas that allow Ulta Beauty to be so exceptionally customer focused starts with the way we think about our values and our culture. Simply put, you can’t be human centric, or customer centric, if you don’t care and nurture the culture and people. From there, we think about serving consumers or for us, our guests.

The journey we’ve been on is an important piece as well. That includes our brand aspirations and the role we can play in the lives of beauty enthusiasts. We exist to bring possibilities to life through the power of beauty. That vision centers us around our consumers and allows our guests to express themselves authentically. So, being rooted in the brand is a part of what drives our customer centricity.

The beauty category is really personal and emotional. We built several customer centric philosophies into our day-to-day behaviors spanning our people, our culture, our brand and the fun category we get to lead.

You’re now quite a large company because of your amazing success. When I was first introduced to Ulta Beauty so many years ago, it wasn’t nearly the scale it is today. With all that success and growth, how do you ensure that everybody from department to department and from desk to desk, store to store is on the same page about being customer centric? And what it might mean and what kind of behaviors make sense to represent that brand in the beautiful, aspirational way that you’ve described it?

Prama: There are probably a couple different mechanisms. One is simply being rooted in consumer insights and data. And then not letting that just be a department’s responsibility, but make sure there’s real sharing and storytelling across teams.

Even our brand aspiration is rooted in deep insights and data, qualitative and quantitative. We operate in a fact-based environment that leverages data to drive action. Any action, any go to market choice, any business model decision or annual business strategy is grounded in an insight and data. Understanding what’s happening in consumers’ lives, how they’re interacting with our category and our competitors, how they’re interacting with us and how they navigate their daily lives grounds all of our strategies.

The other thing about customer centricity that’s critical to success is recognizing that we’re on a journey. There is no box to check and then be done.

There is no stopping the journey. Our maturity today is part of the journey and it follows that our focus on the customer is always on the journey, never separate. It’s all interconnected; the deep interconnection understands that there is no business without the customer. So, everything we do is connected and in service of our total mission.

We set goals no differently than most retailers for business performance, sales, margin, SGNA and profitability. But we also set goals for experience, customer satisfaction and retention of our deeply loyal rewards members. These work together holistically to keep us looking forward in guest-centricity.

The operational aspects of retailing are extraordinarily difficult. How do you balance that with this long-term vision of being so customer centric so that it all sort of works together? I could easily see a retailer getting off track because of that daily grind and concerns.

Prama: When consumers have true trust in and love for a brand, they give their engagement, their share of wallet and their loyalty to that brand. By default, guests are intricately connected to business results, and these are never two different things.

Customer centricity and retail operations must be deeply connected. We recognize no one is perfect and it’s not always spot on but that goes back to the journey conversation. Organizations probably separate them more often than they should. But to your point, on a daily basis, we use guest-centricity as an impetus to do the right thing. The right thing for the consumer AND the right thing for the business. One can never be sacrificed for the other.

For example, there’s an enlightening realization in the business case around diversity, equity and inclusion. And the facts that reinforce that it is not only good from a social and human perspective, but it’s a good from a business perspective, too. We listen to guest feedback, what research tells us as well as our own mission.

Steve, you know because you and Robin have been key throughout our brand journey. And one key part of that was formalizing a customer experience framework after we set our brand aspirations. Setting a real strategy, being rooted in really deep research and understanding our DNA, understanding what brings joy and frustration to our customers. These territories are differentiators for us. That work that we did in this space, you helped us find the right partners, which drove a customer experience framework that is part of our blueprint for today and the future. That’s another way we balance the focus on financial results as well as customer experience.

With the whole company rallying to this vision about your consumer, what’s marketing’s unique role in all of this? Where does marketing fit in, in a way that’s special? Not more special maybe than other departments, but special because marketing has a special role.

Prama: Well, you and I were talking early on, and we recognized one of the reasons our marketing is so special was because of the vision, the architect who inspired it — our former CMO, Shelley Haus who passed away in 2022 after a valiant battle with cancer. When I think about her and her team leading our company on this journey, I do not think of marketing as a competitive function or simply a product. The magic lies in how every element of Ulta Beauty works together; the sum of the parts is greater than the individual elements and in that, our purpose is amplified. Shelley set a critical foundation and in her honor, the marketing team carries that forward, evolves to meet today’s need and celebrates the magic that is Ulta Beauty.

Today, we have a new CMO, Michelle Crossan-Matos, and she is furthering our brand aspiration and bringing the organization and our guests along on the journey. Involving our guests ensures we listen and take feedback to heart.

Of course, aesthetic and creative allow us to express our brand and vision uniquely but what’s different with our marketing is the data that informs our marketing mix, campaigns, insights and more from our loyalty members. Marketing beautifully sets and nurtures rich storytelling and experiences from stores to app, and everything in between. Each Ulta Beauty touchpoint carries a responsibility, and our marketing team has beautifully matured to actively operate as a strong driver of what we deliver to guests.

Of course, there’s an element around aesthetic and creative to make sure the way we express our brand is unique and represents our vision. But there’s also data around the performance of our marketing channels, campaigns that validates the work and insights from our loyalty members. Marketing has been awesome in setting and evolving our rich storytelling and experiences from the expression in our stores, our presence online, and more. Every consumer touchpoint is a big responsibility and our marketing team has beautifully matured as a strong driver of what we deliver to consumers.


The Omnichannel experience is core to Ulta Beauty’s success (Source: March 2023 Investor Presentation)

You personally have been one of the key architects of digitally transforming the company, including eCommerce capabilities. Especially relative to maybe ten years ago. Ulta Beauty is a different place today than a decade ago. What have you learned on that journey that might be helpful for a young digital or eCommerce marketer?

Prama: All of these worlds are colliding and in the most beautiful way.

It’s important to recognize that there’s a balance between understanding the human connections and the digital experiences your consumer has daily. The personal and emotional side of consumer needs must balance with digital data. The end goal is marrying those worlds in a way where the combination amplifies the experiences versus competing with each other.

If you went back 15, 20 years ago, they felt like two different things or they were in service of two different things. Where we’ve evolved is that they’re actually both in service of the guest. And the power of the two together is more valuable than thinking about it differently. So, think about it less as a function of programmatic marketing and analytics. Or brand marketing, inspiration and creative. Rather, approaching it through the lens of building relationships and connections with consumers that can endure. And we’re pulling on all of these strengths to bring that to life.

What can you tell me about your partnership with Target?

Prama: It’s really a wonderful collaboration but like all relationships, it’s complicated and requires nurturing. In theory, some could view our relationship as a competitive relationship. This aligns really well with the conversation we were just having around consumer centricity. It’s helpful to think about the consumer’s journey; it’s unlikely that as a retailer, Ulta Beauty will always be in front of consumers at the critical moment when their beauty needs are most pronounced. At some moments, they may be best served at Target and at others, Ulta Beauty. A key is the realization that we share consumers and those guests enjoy both experiences. By partnering, we can both be more valuable for the consumer. And ultimately, if you buy into the concept that doing right by the consumer, drives business results, our partnership is a match made in heaven.

The collaborative approach from both of us – coming from positions of strength – is rooted in an understanding of our guests and the possibilities that we can create together.

What advice do you have for a senior executive about how to work best with the rest of the C-suite? How do you work with the rest of those folks so that everybody’s aligned around the consumer and customer centricity?

Prama: Broadly, I would suggest senior leaders stay focused on their mission and vision. Stay focused on the guest. Do a good job bubbling up what you think is important and relevant, independent of function. And from there, find ways to bring that into the long-term strategy and processes.

There is something each function can do, but what I love is a more hub and spoke model where we start to ideate together as a go-to market team, across functions that share a common mission and vision. From there, we can naturally bridge across functions with common threads and establish a rhythm with assumed trust and buy-in from the get-go, because we started with the customer perspective.

For example, the strategic platform of Conscious Beauty at Ulta Beauty could have just been a marketing program, a merchandising effort, a digital push or an in-store activation. But it was concepted as a strategic approach based on what we knew. Starting from a consumer insight, we can rally all the key cross-functional teams to work together from the onset to build and deliver for guests – and that creates exceptional working relationships across leaders.

Let me embarrass you. You are one of the handful of wonderful unicorns out there that is really a unique executive: you’re only one person but you’re a technologist, you’re an eCommerce expert, you’re a marketer, you’re an incredible leader. What have you learned about knitting together these various roles into one executive?

Prama: That’s super kind. One, thank you. I don’t know that I consider myself a unicorn. I do think I’m a student; I’ve always been a student. So I think it helps when you have a learning mindset. To continue to tackle new things that come at you or change with a desire to learn. Curiosity is greater than fear, especially when working in such dynamic spaces.

In some cases, it’s awesome to have a deep subject matter expertise, build your craft and let that guide a path forward for how you think about engaging. And in others, for me, finding ways to connect and thread was critical for my growth. I think leaders need a combination of both in order to bring this matrix together.

Technology and digital and marketing are very connected. They go hand in hand. How do they fit together? For me, it’s less about the technology and more about what we’re trying to accomplish with the technology.

One perfect example is when Ulta Beauty acquired its first company, a virtual try-on company – augmented reality – back in 2018. The thesis wasn’t “let’s go get an augmented reality company because we believe in augmented reality.” It could have been, but that wasn’t what it was for us – we held hands as a leadership team and moved forward with this because the technology fit into our company mission and vision. Ulta Beauty was founded to disrupt the industry. We had always provided the opportunity to try before they buy in a store space that’s approachable, on their own terms. Discover is what the company is all about. That’s in our DNA. We believed that 30 years ago, and we believe it today. So, why wouldn’t we think about that experience digitally, and why wouldn’t the ability to discover with the same kind of fun, interaction, connection be digital? And by the way, what technologies power that?

We took something tangible, that was entirely consumer centric, broke down the barriers across store operations, merchandising, marketing and digital to ground our next step in our mission, and then evolved and innovated.

Knowing what you know now, what advice would you give to a 30 year old Prama?

Prama: This one’s a hard one, Steve, mainly because I’m not a regretful person. So even all the missteps I made in my life, I probably would do them again so I could have the learnings.

The main thing is I don’t mind the points where I was not successful because all of those contributed in a positive way. I would tell myself to be open to that from a very early stage. Life is about learning and learning isn’t always going to be perfect.

And from a business perspective, I think the more we can separate ourselves from the business is good. It’s easy to take everything personally but the more we can make it in service of the mission, the more freedom we find to not only partner with others, but also to be equally proud and critical of ourselves in that process. So, that whole idea of feeling tied to your work, but not being so attached that you get defensive about it is something I’ve definitely gotten better at over the last 20 to 25 years.

Prama Bhatt, Ulta Beauty’s chief digital officer, and her team reimagine premier and personalized omnichannel experiences to drive innovation in beauty and retail. An industry leader and team builder, she ensures the company is constantly evolving its strategic capabilities and operating with the mindset that the possibilities are in fact beautiful. Since joining in 2014, her visionary, human-first approach has fueled significant e-commerce growth, which accounts for more than 20% of total sales.

Bringing 20+ years of digital expertise, Prama thrives at the intersection of guest experience, technology and data. She leads cross functional experts to bring to life innovative experiences such as the Virtual Beauty Advisor, Skin Analysis, GLAMLab, real-time recommendations and more to meaningfully disrupt and drive the industry forward. Her work contributes to the company’s various recognitions including its longstanding ranking as the number one beauty destination among the tech-minded Gen Z consumers and consistent ranking on Gartner’s Digital IQ Index.

Before serving as chief, Prama was senior vice president and vice president of digital and e-commerce at Ulta Beauty. Prior to that, she led teams at Toys R Us and Kenneth Cole and held several roles across product strategy, design and development at Ford Motor Company. She serves on Hormel Food’s board of directors and the Advisory Board for Shoptalk.

Steve Boehler, founder, and partner at Mercer Island Group has led consulting teams on behalf of clients as diverse as Ulta Beauty, Microsoft, UScellular, Nintendo, Kaiser Permanente, Holland America Line, Stop & Shop, Qualcomm, Brooks Running, and numerous others. He founded MIG after serving as a division president in a Fortune 100 when he was only 32. Earlier in his career, Steve Boehler cut his teeth with a decade in Brand Management at Procter & Gamble, leading brands like Tide, Pringles, and Jif.