So psyched for my next special guest. It is Kecia Steelman, Ulta Beauty CEO. Kecia, good to see you. I still remember when you were just Kecia's COO and now you're like past the one year mark as CEO. I'm really just really proud of you.
Yeah, thank you Brian. It's an honor to be here today and you know I think we were just talking. It's been three years I think. We had some conversations. Time goes really fast. I will say that and waits for no one.
What am I doing wrong in my face routine? Like I have a really good routine and I built it during the pandemic and I suspect I'm not alone, but I've kept it. And I have creams. I have various things. What mistakes could I possibly be making?
I think sometimes doing too much, you're layering on and your skin just can't absorb everything. I also think it's kind of no different than with hair, like every once in a while switching products up that you're using with your skin kind of almost structures your skin and I think that's actually a good thing to do. And then I was just going to ask you, are you using a mask?
I have so I have the red light mask. I have a clay like soapy type of mask, but you know what you bring up a good point. Maybe I'm just doing too much and I keep using the same stuff, but I think I need to shock my face a little.
Yeah, shake it up. I'd say try something different. And one of the brands that's a really good easy to use brand to kind of just change up your routine is Drunk Elephant. Especially for our age, you're younger than me.
Look, I ain't getting younger. All right, let's do it. It's a face routine.
I would try a little Drunk Elephant in there. Just change up your routine and then go back to your other and I think you'll see a change in your skin.
Do you get those questions a lot? Do people ask you?
I do. And you know what's crazy is I feel like I do really know a lot about the category because I'm a beauty junkie myself and to me it's just fun. It is just totally fun to immerse yourself and I use a lot of different products myself.
Where is all these innovations coming from? Like I'm closest to obviously I follow Ulta but I listen to like Procter and Gamble's earnings calls and they own SK-II and they're always talking about international all these beauty trends developing. Is that where all the stuff starts?
Yeah, I mean there you see it everywhere. I see brands that are starting here in the United States, but I just came back from a trip to Korea and I will say there is something that's really truly authentic with Korean beauty and it's almost like K-science beauty where it's really the scientists that are even behind the K-beauty trends that you're really seeing some fantastic products come from them. J-beauty, so Japanese beauty, C-beauty, Chinese beauty, I mean it is a real phenomenon that's happening right now and I think it's challenging some of the US-based manufacturers to really up their game too. So it's really coming a lot from skin.
Your stores are pretty big. I mean a lot of them in the malls, of course you have off-malls. Like how do you know what to put on the shelves? Like there seems just so much innovation every single day. There's like a new brand popping up and especially you have Instagram, TikTok trends.
Yeah. Well, what I will say is that when we bring a brand into a store, there's a couple different ways where we can bring the brand in. We now have marketplace. So, if we have a small brand that we want to just see how the consumer is responding, we can now bring it into marketplace, kind of get a feel for it and then start to grow them, you know, at the right pace for them. The last thing that I ever want to do is not be a good partner to the brands because you can essentially bankrupt a brand if you grow it too quickly. And also, you want them to be really successful when they hit the ground running. We've got 1,550 stores right now. So, you know, to have a brand come in and go to all stores probably not the best step for step one. So, we're really gradually growing them. We've also invested a lot in what we're calling customer segmentation work. So, we really understand the consumer shopping behaviors, what they're buying because of our loyalty member base. And we layer that on top of our demographics in those stores in those areas. And we're just in the early phases of really having store-specific prototypes and product lines in the stores. So I say internally like we're successful in spite of ourselves because if you look at four-wall productivity, if you can get the right assortment, you can get rid of the tail, you can improve your inventory returns, and you can have the products that the guest is wanting in that specific store location, I think that's when magic really happens.
I mean, that could be a big unlock for your company.
Huge, huge unlock for us.
How is TikTok changing the business of cosmetics? And maybe I'm not the best expert in this, but I go to TikTok. I see people doing their makeup. I mean, you have people that have made businesses and careers and lives off of these TikTok videos and even Instagram for that matter.
Yeah, absolutely. It's been a game changer. You know, we went live on TikTok on March 17th. So, I'm really really excited about that. We are the very first specialty beauty retailer that's got multiple brands that's on TikTok. We started with our exclusive assortment first, so we can kind of get a feel for how things are going to go and then we're going to open it up to more of the brands. What we're seeing is the creators are coming out in the droves of like thousands of creators are now wanting to work with us. And to us, it's two different things. Number one, it's a way that authentically you can reach a younger audience. They're scrolling TikTok. You mentioned YouTube earlier. YouTube's still a really important channel, but TikTok is a marketing tool also to bring the brand equity to life to many many guests that are out there. And then there's also the shopping element, the live shopping. You know, I think back to the days where you'd watch TV as a kid and you want to buy. But this younger generation never experienced that. This is really cool where they can see like pop-up live shopping events where they can actually purchase right online. You know, that moment is here.
I remember Walmart testing that a few years ago. I'm like that makes so much sense. Like if they're watching this right now and they want to buy your outfit or my outfit, like why can't they do that? Why can't people do that now?
Yeah, absolutely. It's here. And you know with TikTok, one of the things that we're really focused on, you know, initially TikTok, you hear this a lot of the brands are coming off TikTok because it can be relatively expensive. What we're working on the value is really about creating bundles and that's where I think the magic really can happen is so you have a little bit higher AOV. You're given maybe a little bit of a free product or a GWP with that bundle. But that's really I think the unlock of how you can really make TikTok work for you as a retailer. We'll be the first one that can do just not a single brand bundle where we can do multi-brand bundles. I think there actually might be a Kecia's favorite bundle on TikTok Live coming.
Oh my god, you've come so far. I'm so excited. I really am. I'm excited for you. Like so you just passed your one year mark as CEO.
Like how would you summarize your first year in this position now? You were with Ulta. You were COO. You understood the business, the operations, but taking on this role is a little bit different, right?
Yeah, absolutely. Well, what I will say is it's been the most fun year I've ever had in retail. And you know, I often hear from a lot of CEOs, they're saying, 'Oh, that job can be pretty lonely.' I don't feel that way. And, you know, I feel really blessed. I have a fantastic board. I built great relationships with my board of directors. My board chair and I are pretty close. I have a fantastic team. This is my team. And you know, while I worked with fantastic individuals, because I've been in the company almost 12 years, you know, there's a pivot in time where what got you here isn't going to be what gets you there. And I could very clearly see what skill sets I needed to take our company to the next level and have the next 36 years of success. So, it's been a lot of fun to really build my team. I came out, you know, the advantage I had was I knew where the opportunities were.
One of the benefits of being on the inside and then getting a role like this.
Yeah. And so I came out with a very clear strategy that I'm a big believer and you know part of it is because I grew up through retail myself. I think everyone from the backroom of a store to the boardroom needs to understand what it is that you're trying to do with your strategy, the role that they play and what the expectation is from them. And that's what we clearly laid out and we just hit the ground running this last year. It's been a lot of fun to see the company, you know, shifting into taking market share. We've had a lot of great success having quite a few quarters of beat and raise. So, that's a good place to be.
That is a good place to be. And you know what? I enjoy following you on Instagram. In part because I see you still out in the stores. You take these photos of your team members. How important is it that as a retail CEO, you were in these stores talking to team members, but also observing how human beings actually shop?
Yeah, absolutely. I think it's the most important thing. I mean, and I'm very blessed because I do understand that. I remember working in the store, you know, back in the day and be like, what difference can I make here? If I can leave the store as a CEO where I have that team inspired and motivated and want to do even more, they're essentially the ones that are face to face with the guest every single day. They represent the brand even more than I do as a CEO. So, to me, it's anything I can do to touch and excite them. And then also, I just actually left our Chelsea store earlier this morning. I wanted to pop in and my very first question is what can I do for you? What can we be doing better? And I'm like, no, I seriously want to hear it because if there are things that are on your minds or things that are blockers in your way of being successful, being able to work in our store, I got 1,500 stores out there. I need to hear that from you on the front lines and create that space where they can really be truly authentic and give me the real feel feedback because otherwise, how do we get any better? I mean, if my stores are running well, the people are happy, we're generally pretty successful.
