Ulta Beauty Strategies: Inside Ulta’s 44-million-member loyalty program

“Ninety-five percent of every dollar that comes through the company is coming from [Ulta Beauty Rewards] members,” Kelly Mahoney, Ulta Beauty interim CMO and svp of customer and growth marketing, told Glossy. “Our vision is you come into the program and realize value quickly, and then you’re hooked because you love the perks and the benefits.”

For Ulta Beauty, this includes access to early shopping events like its popular 21 Days of Beauty sale, as well as regular discounts, birthday rewards, coupons, in-store salon offers, samples and full-size free gifts. Mahoney told Glossy that the program follows the 80/20 rule, where the top 20% of program members are driving 80% of the revenue. 

Of course, it’s no secret that loyalty programs are table stakes for retailers in 2025. Ulta Beauty’s competitors all have them, including Sephora, Credo Beauty, Blue Mercury, DermStore and most department stores, sometimes both through the retailer and a single-brand cosmetics counter.

According to data management company Acxiom, 65% of consumers want to be rewarded for their loyalty and 72% are willing to stay loyal to a brand if they offer discounts and rewards. Additionally, 56% of customers are most likely to repurchase from a company if they receive personalized loyalty rewards and programs. 

This tracks with retail industry averages, said Nikki Baird, vp of strategy and product at Aptos, a retail technology company for fashion, beauty and apparel retailers. “Loyalty program participants buy more frequently and have a longer lifetime value,” she told Glossy. 

Ulta Beauty’s program stands out from its competition for its size — no other beauty retailer’s program reports 44 million active users — and the way it’s structured, which Mahoney said helps to drive engagement. 

Whereas Sephora has found great success with a sample-based rewards program, Ulta Beauty converts a consumer’s purchases into points that can be redeemed as discounts. The amount of points available on a purchase, which can range from one to five points per dollar spent, changes almost daily. This gamifies Ulta’s app and keeps consumers engaged. 

It’s proven to be very effective. Strategically making purchases, saving points and redeeming them at exactly the right moment to maximize savings has become social media fodder. As reported by Glossy in 2022, Ulta Beauty’s online community is well-known to be vocal, engaged and excited about the program. Shoppers discuss their strategies on TikTok and Instagram, often sharing how to get a big-ticket item, like a $600 Dyson hot tool, for a fraction of the cost. Ulta Beauty’s program has grown from 37 million members to 44 million since 2022. 

An ideal consumer journey starts in store and ends on the app, Mahoney told Glossy. “True connection happens in the store,” she said. “Part of the secret to our success is that our associates are part of the program; we want them to live and love and breathe it, so that when they’re having the conversations with our guests on the floor, where most sign-ups happen, [it’s clear] the associates believe in the program.” 

This excitement makes sign-ups effortless, Mahoney said. Ideally, an associate captures the phone number, email address and birthday of a new member, but just an email or phone number works, too. New members can sign up online or in-store, with the vast majority of shoppers signing up in-store.

The next goal is app sign-up, which is done via targeted marketing by email or SMS. “The app is kind of the handshake to the program and the way we have most of our communications with our guests,” Mahoney said. Once downloaded, users can track their point-collection progress using game-like graphics and colors, which cue the user to different reward levels and spending benchmarks. Users also shop and learn about upcoming sales and events. At the time of publication, the Ulta Beauty app was the 27th most downloaded shopping app on the Apple app store and had 1.8 million ratings resulting in 4.9 out of 5 stars.

Ulta also uses data and AI to create personalized brand recommendations and product curations to encourage users to shop on the app. “We have great data that helps us to tee up recommendations,” Mahoney said. 

But perhaps the most effective tool in Ulta Beauty’s playbook is how it retargets lapsed program users. 

According to Aptos’s Baird, the challenge of an effective loyalty program lies in keeping members active. “If you have a one-time shopper who sits out there for a long time, the odds of turning them into a 2x or 3x [shopper] gets smaller and smaller [as time goes by],” Baird said. “Consumers stay heavily focused on discounts, but a key component to generating loyalty is generating delight in the customer, something pleasantly unexpected.” 

“It’s a balancing act,” Mahoney said. “You don’t want to flood somebody’s email, but we do want to pace it so that we can get them back in the first 45 days [of sign-up].” To do so, Ulta uses paid advertising and a waterfall of communication, all powered by data collected through machine learning and AI. 

“We have 44 million users, a large percentage of the U.S. population, already engaged in our program,” Mahoney said. “Mining that group of people [for universal or common data] and bringing them back in is a really important strategy for us on the retention side of the business.” 

Lapsed users who once shopped regularly but have all but stopped are treated differently than one-time shoppers. “Data is our crown jewel,” Mahoney said. “If you start purchasing with us online [then disappear], we can start to put different messages in front of you on our site that we think you’ll like based on your browser history.” Then, using key identifiers like phone numbers, the retailer can find the lapsed user on social media and begin targeted, paid ads based on data collected about them. 

“We try to find the right ways that will really prompt that person,” Mahoney said. “For example, if we know that you were a skin-care customer with us, we can tell you how we’ve advanced our skin-care assortment.” 

For resistant shoppers, Ulta moves to offers. “If that’s still not working, and we’ve retargeted you, we’re moving into [discount code or free gift] offers, and we’re saying, ‘Come on back!’” she said. “Those are some of the ways we methodically tend to that life cycle [of this program], and that’s really been our success story in terms of continuous growth in our member base.”

Still, like many other retailers, collecting a user’s birthday during program sign-up is crucial for retention. 

“The most meaningful thing you can offer to a consumer, outside of the points, is this idea of getting rewarded, gifted and being treated special on their birthday,” Mahoney said. “Our members look forward to it.” 

For Ulta, this includes offering double points during a customer’s birth month, as well as an in-store salon coupon and a free gift. A recent shift included adding choices for one’s birthday gift. Members currently pick from five options, whereas in years past, they received one universal gift. “We’re seeing great uplift in our birthday redemptions [now that we offer a choice of gift], and we’re seeing customer satisfaction increase after they’ve redeemed,” Mahoney said. 

Ulta Beauty launched its loyalty program in 2014 under the name “Ultamate Rewards.” In January 2024, it rebranded it to a simpler “Ulta Beauty Rewards.”

Ulta Beauty opened its first store in 1990 and currently operates 1,385 stores across 50 states. The company reported $2.53 billion in sales during its quarterly earnings in December, up 1.7% year-over-year from $2.49 billion. Looking at the first nine months of 2024, compared to the same period in 2023, net sales increased 2%, from $7.7 billion to $7.8 billion.