How Ulta Transforms the Beauty Industry with a Guest-Centric Approach

Joseph: Welcome to Radically Personal.

I’m Joseph Ansanelli, CEO of Gladly. We’re on a mission to help companies reinvent customer service and deliver on the promise of Radically Personal customer experiences.

On today’s episode, we’re joined by Adam Seede. Adam is the director of guest services at Ulta Beauty. Adam shares the mindset shift that today makes guest services so successful.

Adam: You know we have to move from being transactional to being purposeful, building a relationship, not just thinking about guest services as a post-transaction team that helps answer, “where is my order!”

Joseph: Adam also tells how COVID 19 forced Ulta Beauty to search for new solutions to the challenges they face, including how to scale and staff their guest experience team.

Adam: I had the opportunity to bring on two hundred helpers from our field. These were folks in our stores that their store was shut down due to the Pandemic, and I was able to bring them in on Gladly to answer emails.

Joseph: And we’ll hear some insights on Ulta Beauty’s accelerated pivot to digital retail.

Adam: Not only did we have to accelerate our omnichannel experiences, but we had to really challenge ourselves to remain grounded in the human connection.

Joseph: This is Radically Personal.

Hey everyone, and welcome to Radically Personal. I am super excited to welcome my friend Adam Seede, the director of guest services at Ulta Beauty, to share his story, the story of Ulta Beauty, and how Ulta is delivering a Radically Personal guest services experience. Adam, welcome!

Adam: Thank you, Joseph; great to talk with you.

Joseph: Why don’t we start Adam, maybe, with a little introduction and background for our listeners? Maybe a little about who you are and your background?

Adam: I’ve been in customer care since I was a kid, technically, in high school. Served at APAC customer care out of Deerfield, Illinois, for about 13 years. Really cut my teeth in service and sales and ran operations, and centers, and client accounts, and really had a great experience. It really took me into a field that I had never thought I would enjoy as much, and I’ve been there ever since. And then, I transitioned to Nordstrom—responsible for customer care, and spent 13 years at Nordstrom, and of course, an incredible company, incredible leadership, and quite the experience that I’ve gained personally and professionally at Nordstrom, and it gave me the opportunity to transition to Ulta Beauty. And I’ve been at Ulta now for four years as of this weekend.

Joseph: Happy anniversary!

Adam: Thank you very much.

I would say Ulta really is a technology company in many ways in the beauty industry—really bringing technology and solutions to our guests in the world of beauty. And it’s been an incredibly fun ride here.

Joseph: That’s awesome! I mean, those are some—you have worked with some really amazing brands that just have this incredible legacy and heritage of delivering great customer experiences and service. What role does guest services play?

Adam: We partner with all of our departments such as supply chain, of course, and merchandising, marketing, IT.

We really work in the center and need to know a lot about a lot, so guest services is part of the strategic planning process as well as the execution and operational processes. As a guest services department, we feel as though we are in the middle.

Joseph: What led you to rethinking the customer experience, the guest experience, and how did that lead you to choosing Gladly as your partner?

Adam: The journey broadened as soon as we really thought about ways to be more emotional. At Ulta we have 34-million ultimate rewards members today, and 95 percent of our sales come from our members. It gives us the opportunity to better know the guest. So I think the challenge that I’ve always had is, how do you use that information, that data, those insights in the guest services world? So, I think that was the impetus of how can we do better?

Joseph: So I didn’t actually know some of those stats, so, 34 million members in the ultimate program, and ninety-five percent of your revenue comes from those—from the members—is that what you just said?

Adam: That’s right.

Joseph That’s incredible. It really changes the way you think about the business because you really think of it as a membership, not as an individual transaction. Service used to be this back-office issue resolution function. You’re thinking about it as a front office revenue generator.

Adam: You know we have to move from being transactional to being purposeful—building a relationship and not just thinking about guest services as a post-transaction team that helps answer tracking questions. You know, where is my order? Those are the transactional inquiries that everybody has to answer well and quickly. But we have a real advantage at Ulta that we have these members, and they give us great information, which is their purchase history. We use that same information when we’re talking to a guest. We want to recognize the guest, and their loyalty, and also their preferences.

Joseph: You invested a lot in unlocking all that data about who a guest is to match them with an associate to best help. How has that changed things?

Adam: We deliver a really great experience to each guest regardless, really, of our membership tier. Although we love our Platinum and Diamond guests, of course, so I would say it’s really a matter of recognizing them acknowledging that loyalty.

Ulta has been around since 1990 and we have some very loyal tenured guests, and so we want to recognize that, but more so, it’s understanding their preferences and their favorite brands. It gives us the ability to acknowledge that and suggest new brands—suggest new products of their favorite brand, and I think that’s where it gets fun. We can become more helpful to the guest versus transactional.

I got my first TUMI bag 25 years ago. I remember it was this rite of passage. I was working as a young kid as a product manager at Apple and I was starting to travel and I bought my first rollaboard, and it was the cheapest one that I could get at the time. I didn’t have a lot of money. I would always walk past the TUMI store and see the red logo and be like, “One day.”

Joseph: It is so much about that feeling of showing that you know who they are that delivers on that engagement and retention, which is super powerful. That’s the way you compete against an Amazon. I mean, you’re in a category that people could argue, well it’s just something that Amazon can easily do, and I think they do, but I don’t think they do super well because they don’t deliver on that level of engagement.

Adam: This Pandemic has really challenged all of us retailers to be more creative and put forth solutions. And I think at Ulta Beauty, we have associates as our secret weapon, and we have an amazing in-store experience. And I think it puts that ownership on guest services, if I speak about my team, to deliver the same experience as our guests expect from us in-store. And so we need to create that environment where guests can come in, and explore, and test and try, and really be themselves when they come into one of our stores. And how do we give that same experience digitally or with guest services as well?

Joseph: You know, voice has been such—and still is—a really important way that your guests will connect, but you’ve obviously gone through a bunch of transition with your guests in terms of where they want to talk with you and, you know, the rise of messaging as a place to meet your guests. Can you share any experiences for folks who are sort of thinking about that?

Adam: We read articles, and we go to conferences and hear that voice is going away, and people aren’t going to call, but it’s certainly not the case. We love to talk with our guests. Our guests love talking with us, and I would say half of our volume remains on the phone. However, that is changing, to your point, and, you know, in addition to email, we see live chat on the rise. We have live chat going, of course, proactive chat on top of live chat, and then text, which we launched in July, which has been great.

It’s a trickle because we’re testing it, and that’s currently on our phone menu, but we see an adoption there as well. And we need to be very relevant to our guests. Our guests are very diverse, and we need to be where our guests are and really harness technology and make communication convenient and on the guest’s terms.

Joseph: You know it’s about choice. It’s about meeting people wherever they are. Is there any learnings from the first few months of using SMS that you would share with folks?

Adam: It’s not as complicated as one would think, in terms of waiting for a guest to respond back, and making sure it’s the same specialist, and figuring some of those logistics out to make sure that the experience is a great consistent one for the guest. And so, you know, our learnings were just, dip your toe in and try it out, and your guests are excited to speak with you. You’re excited to speak with a guest. It turns into—just the specialist is going to be a great specialist and advisor for the guest. So what’s really neat about it is the reaction from the guest in our customer satisfaction results—the nice surprise that they get when they can select text as an option on the phone.

Joseph: Oh, interesting. So, you’ve actually gotten people to respond back in your CSAT surveys specifically about that?

Adam: Yeah, “How cool? How cool is text? This is great! Ulta beauty texts now?” If you were to size up the type of guest, perhaps, that may want to text versus call, that is not who you’re marketing your text to currently—if you just offer it in your phone menu. So you’re really surprising those guests that are calling in and loving the choice. But to your earlier point, there are times when it’s better to talk. So if you’re texting, it’s great to be able to say, “do you mind if I call you? I think I can help you much more quickly.” And then the guest is also pleased that we’re not locked into the current channel that we’re talking to them in.

Joseph: Everyone is focused on this concept of Omnichannel, and I don’t think Omnichannel is the point. I think the point is to be channel independent. It’s about the guest, and you should meet them wherever they are, and it should just be one continuous conversation with that guest independent of the channel. So you can start an SMS—be on a phone call—send them an email, and even do them at the same time. I mean, there’s no reason why you can’t be on the phone and text them some links, for example, or some images.

Adam: Absolutely, and I think the definition of Omnichannel maybe puts you in a corner too much. And I think you need to think broadly at how you communicate with your guests and start collecting their preference as well.

Certainly, the Pandemic sparked a massive shift to digital, and I think, you know, I think we learned that not only did we have to accelerate our Omnichannel experiences, but we had to really challenge ourselves to remain grounded in the human connection. So being hyper-relevant and having strong capabilities to deliver.

I would say that the guests expect in-store and online experiences to be seamless and connected. I think that’s a given.

Safety and convenience are more important than ever, and I think, you know, one of the things that we learned—that we really expanded on—was our Glam Lab and our Skin Analysis as well.

Joseph: What are those?

Adam: It’s our means to allow virtual try-ons of our product. So Glam Lab—it’s really neat—so Glam Lab we’ve had on average about 20 million shade try-ons a quarter. It’s a big number.

Joseph: Virtually.

Adam: Virtually via our app, and it’s incredible to see the adoption rate in the usage and now the dependency on it. So, I think bringing that to market and really expanding it was huge during the Pandemic. It’s certainly one that, of course, we’re continuing, but it just goes to show that that human connection is absolutely necessary. It’s more important than ever during a time when much interaction was taken away. It’s part of the reason, I think, our guests crave our in-store experience, especially when you think about how meaningful and personal beauty is to them.

Joseph: I didn’t know those numbers. I mean, that’s just such a huge new way to engage. That’s crazy, that number. I’m just thinking about it. That’s incredible. That’s awesome.

Adam: If you love the data point, I think you know our Foundation Shade Matcher is another capability, and 60 percent of our users get matched, which is really neat. Matching foundation virtually is very difficult, and so it’s another service that we provide. I think it looks like you have used it. I know we’re looking at each other right now, and you are spot on so…

Joseph: Yeah. [laughs] People can’t see as we’re on video looking at each other. He’s staring at my bald head.

You know messaging—obviously, you’re getting some really good adoption. People are excited to text and SMS. You shared once a little about how you started to use proactive chat to help drive revenue.

Adam: Sure! Proactive chat in checkout has been a great capability for us. And we found that engaging with the guests that may be struggling in checkout—perhaps time spent on page, or struggling with a promotion code entry. We would engage with a proactive chat.

We found through measuring the results that our conversion rate had doubled with those engagements over proactive chat versus not reaching out to the guests.

Joseph: So they’re in the—they’ve got an item—they’re in the checkout page. You have some rules. We don’t have to get into your secret sauce on that. That says, “hey is there some way I can help you in this moment?” And you’re finding that when you engage you’ve doubled the conversion for people checking out, basically?

Adam: That’s right.

Joseph: That’s huge—that’s got to have a huge impact on the bottom line like—I should say top line. That’s such a great example. Much more of a front office, I’m helping you through this pre-sales process versus the post-sales process.

Adam: It’s been fantastic. The results have been significant. That’s a great example of being where your guests need you to be when they need you.

Joseph: Let’s shift gears a little bit. Let’s talk a little bit about people and culture. What’s changed in the recruiting and enablement of the team—both with Covid, but also with thinking of Gladly as the product platform you use. Like you shared some stories about, like, you can recruit different people today, for example.

Adam: We look for individuals that want to engage with people. They are creative in their thought and have an opinion, and they want to do what’s right, and they really match our company values, and they love what they do. And so we’re looking for people that really fit the mold of our values at the same time we empower them. So, our training is making choices to serve the guest in the right way. And that means it’s not very scripted, and you know there are lots of resources to make the best decision for the guest at that time. The hiring profile has always been tough, especially during the Holiday ramp season in retail. Or you’re trying to look for a candidate that is service-oriented, and can communicate with people really well, and loves doing so. At the same time, they have this technical savvy about them, and so you know you have this sort of dichotomy a bit. It’s rather difficult to find somebody that’s very tech-savvy—that can work a dozen screens at one time while trying to deliver a really great guest experience. So the transition to Gladly is—you know, what you and I have always talked about— the simplicity and ease of Gladly, and really I’ve always been looking for an intuitive platform that, quite frankly, trains itself. And I always compare it to the iphone.

You get your iphone, and it’s a supercomputer, and it has a threefold pamphlet, and it’s maybe an inch tall, and it tells you basically enjoy the product. Gladly’s really enabled that for us.

I got to tell you a story. During the Pandemic, when, you know, we shut down stores, and we along with most others were in high queues, I had the opportunity to bring on 200 helpers from our field, and these were folks in our stores that their store was shut down due to the Pandemic. And I found a way to tap their skill set. They were obviously great with our guests. They’re associates of Ulta Beauty, and I was able to bring them in on Gladly to answer emails, and it worked out amazingly.

Joseph: So these are store associates or managers who had never worked necessarily on the guest services team? They were in-person retail associates?

Adam: That’s right. They were front-and-center, on their feet all day, in our stores across the country. So, creating a virtual training and introducing the platform—introducing Gladly and training them up to speak with our guests over email was amazing for us, and it was amazing for them. The win we got out of that was such a partnership with our field team that they could appreciate the inquiries that guests come in with. Some of them are from experiences within their stores, so they could hear that firsthand, and help solve that problem, and really represent their store, and take full ownership of the experience, and make it a great one. So, it was incredible from a relationship standpoint, from an operational standpoint, and it helped our guests—who you know, at that point in time, we were trying to serve our guests as effectively as possible.

Joseph: The fact that you did that crossover of the team like it’s—it’s just—it’s—I love that story. That’s a great learning. You know the name of the podcast is Radically Personal, and I ask everyone who comes and joins to tell something that’s Radically Personal about you that most people don’t know. So what’s Adam’s Radically Personal moment?

Adam: These are all legal moments?

Well, this is rather recent. To me, it’s radically personal that I went back to finish my college degree, and that was this summer.

Joseph: This past summer?

Adam: Yeah, it was this summer. Yeah, I finished it, and you know it was really important—first of all, it was a ton of fun.

I cannot believe—I’m a totally different person, of course, now than when I was a young punk kid trying to, you know, make it through college and not sure exactly how I was going to apply what I was learning and whatnot. I went in on an engineering track, and, you know, certainly pivoted in my career. So—but the most important job for me is being a father and a role model for my two sons. So, I want to show them the value of hard work and, you know, taking a risk to better yourself in an area you’re passionate about. So I feel like it was a great thing for me to do personally. I had a ton of fun. I did really well, maybe a little bit too well, according to some of my professors. You know, they’re not used to having these types of conversations about one-hundredth of a grade point average on a grade. So anyway, it was a lot of fun.

Joseph: That’s awesome. That’s great. Congrats on that.

That’s, that’s—you know that’s grit. You know? Like you just did something you want to do, and you made it happen, and I can’t imagine how you managed to do that while leading the team at Ulta, because I know how crazy it’s been the past 18 months. So double Kudos on that. That’s awesome.

What’s next? What’s next for Ulta? I mean—just Mary, who recently retired as CEO. I mean, she just did an amazing job in her tenure there—I mean, she really did. It’s hard to argue with the incredible results and the scale that she’s built at that company. New CEO now. What’s next for Ulta overall? What’s next for Ulta and guest services?

Adam: Well, I’d say overall, you know, Mary is such a fantastic leader and developed such a following among all of us. And Dave Kimball, our CEO, is certainly carrying the torch and running with it, and he’s amazing, I think you know. All up for Ulta will continue to grow our innovative apps and champion product discovery and trial. Our associates, I’m sure, will continue to serve as experts and deliver on the guest’s needs, wants, and values and I think. You know we’ll serve, as I mentioned before, our guests where they need us when they need us, and I think that’s the key.

Joseph: Yeah, I think one of the things I always hear from our conversations is that it’s one Ulta—whether it’s instore online with a guests experiences team—like it’s just it’s one Ulta. And I think that, you know, it’s really hard to deliver on that.

Adam: We are one company. We wear a guest hat and, you know, seeing the stores appreciate the capabilities that we can serve their local guests with—Buy online. Pick up in-store and curbside etc. It certainly allows them to continue serving their guests and growing their business, and so I think it’s been important that all of us have been in locked arms through this. And we’ve grown from it.

Joseph: You know, people and teams and your team. They just do such an amazing job, and I’m sort of curious like, what have been some of the—is there any, like, secrets or secret weapons that you’ve had internally to help you get through the challenging times with such grace and success these past couple years?

Adam: It certainly has been a Choose Your Own Adventure, I think, the past couple of years. And I would say—because you can’t look in a crystal ball—I’d say by far, you know, my secret weapon is my team here at Ulta beauty. You know, Ron, Matthew, Paula on the guest services team. They eat, sleep, and breathe guest services, and they come to the table with creative thoughts and an opinion and a voice, and they are excellent at working together to put it into play.

Joseph: Yeah, they’re great, and I think you know one of the things that

we try to do—and I think that we’ve done pretty well with you—is like, how do we engage so like, we are part of the team—and we’ve always felt very welcomed.

I’m super proud of that partnership that we’ve been able to do. It’s not—It’s not a vendor relationship. You know what I mean? It’s like, hey, we’re on this journey together.

Adam: Likewise, we feel the same way, and that’s what I would think is your secret weapon.

We have 1300 stores. We have, you know, over 30,000 associates in-store serving guests. And we have guest services, of course, that are trying to deliver the same experience as our in-store associates, and so I would ask you? How do you envision Gladly evolving, or where do you expect to take Gladly to serve retailers like ours—that are heavy brick and mortar, an online presence app and really technology-forward, and with the experience as our overall top-of-the-list value?

Joseph: Yeah. Yeah, I mean, and I think I’ve shared this with you. We started the company, really, because we wanted to help companies like yours who are trying to focus on lifetime value of your customers and that long-term engagement. And we think the right way to do that is to deliver this idea of a people-centered service approach—a relationship, not a workflow function.

It’s just funny. I mean, the way people have delivered and focused on service really is this result of applying the mentality and the lessons from a production line to service. You know, if you think about a production line where you sort of separate people’s knowledge and the actual things that they’re doing on a production line—where you want to get it to be very process-oriented, and they’ve sort of taken the people and their intelligence and their relationships out of the conversation. And what we’re trying to do is figure out how to work to bring that personal—bring people back to the center. It’s called customer service. It’s not called case service.

You know, it’s about understanding your guests and meeting them wherever they are. And so we continue to invest in that. How do we help you drive revenue, improve CSAT, while doing it more efficiently? You know we support lots of different ways to connect today. One of them we don’t yet do natively is, like, video, for example, so we think that video is a way of engaging, and making that part of the conversation in a very natural way is a really interesting extension.

Associates participate in the conversation with guests. You know it might be with proactive communications. It might be that they’re participating in guest services. We really want to continue to invest in making it so that it really truly is a single lifelong conversation between Ulta and your guests. Two big things that we think a lot about is people and delivering more context about who they are to make your team really be able to show that you know them. And also just to meet your guests wherever they are, whether that’s digitally on voice, on video, or ultimately in person as well, and we’re super excited about that journey.

We can’t thank you and the whole team enough for the partnership and look forward to many, many more years together.

Adam: Likewise great working with you and the team.

Joseph: Adam, thanks so much for letting us join you on your journey. We’re proud to partner with you and the whole team at Ulta Beauty and proud of the creativity and leadership you’ve shown in delivering a Radically Personal guest experience.