Ulta Beauty

The Impact of Social Media on Purchasing Decisions and Consumer Behavior at Ulta: A Comparative Analysis of Influencer Marketing, User-Generated Content, and Brand Engagement Strategies

Year
2024

Ulta Beauty Brand

INTRODUCTION

In the evolving world of retail, understanding consumer behavior is necessary to succeed. With the raise of e-commerce, retailers are constantly seeking insights into what motivates consumers to make purchasing decisions. In this context, Ulta Beauty is truly a stand out company focused on beauty products, cosmetics, and retail. 

​Ulta Beauty, founded in 1990, has quickly climbed the ladder to become one of the largest beauty retailers in the United States. Ulta has established itself as a quick-stop destination for consumers interested in the beauty world. As a leading retailer in the beauty sector, understanding consumer behavior is truly important for Ulta Beauty to maintain its competitive drive growth.

​Consumer behavior identifies the actions and decision-making processes taken by individuals when purchasing beauty products. It is influenced by many different factors, including personal preferences, society norms, and marketing stimuli. For Ulta Beauty, gaining insights into consumer behavior is crucial for devising effective marketing strategies that resonate with its target audience and drive consumer engagement and loyalty. 

SITUATION ANALYSIS

1. Market Trends and Demographics: 

Ulta Beauty serves a diverse customer base across many different demographics, including, age, gender, and income levels. Market trends indicate a growing interest in skincare, makeup, and personal hair care, driven by factors like social media influence, self-care awareness, and growing beauty standards. 

2. Psychological Factors:

Consumer behavior at Ulta Beauty is heavily influenced by psychological factors such as perception, motivation, and attitudes. Customers often seek products that enhance their self-esteem, express their identity, or provide sensory enjoyment. Ulta’s store layout, product displays, and branding strategies play a big role in shaping these. 

3. Social Influences: 

Social influences, including reference groups, family, and social media, significantly impact consumer behavior at Ulta. Peer recommendations, celebrity endorsements, and online reviews can influence purchasing decisions. Ulta’s engagement on social media platforms and collaborations with influencers boost its brand reach and influence. 

4.Cultural and Subcultural Influences: 

Cultural and subcultural factors shape consumer preferences and behaviors at Ulta. Trends influenced by cultural diversity, ethnic backgrounds, and regional preferences impact product demand. Ulta’s efforts to offer a diverse range of products and inclusive marketing campaigns resonate with culturally diverse consumers. 

5. Economic Factors: 

Economic conditions, including disposable income, employment levels, and purchasing power, influence consumer spending at Ulta Beauty. Economic falls may lead to different purchasing priorities, with consumers looking for value-oriented products or focusing on just the essentials. Ulta’s pricing strategies and promotional offers also play an important role in attracting customers that are price-sensitive.

PROBLEM DEFINITION —

Our research objective is to explore how social media platforms impact consumer behavior and purchasing decisions specifically within the context of Ulta. Ulta Beauty's main challenge is to determine how social media affects consumer behavior and purchasing patterns to grow the business and improve customer relations. We will survey the impact of influencer marketing, user-generated content, and brand engagement strategies to analyze their respective impacts on consumer behavior at Ulta. Within the survey, we will identify demographics, consumer preferences regarding influencer authenticity, and importance of certain consumer purchase factors. 

HYPOTHESIS + QUESTIONS+GOALS

  • explore whether awareness of Ulta Beauty products correlates with an increase in the intention to purchase. This hypothesis dives into consumers' familiarity with Ulta Beauty and their intent to purchase its products.

  • examine the extent to which demographic factors such as age, gender, and income level impact their purchasing behavior of Ulta Beauty products and they may influence consumers' perceptions and interactions with Ulta Beauty.

  • Is there positive perception of Ulta Beauty products contributes to enhanced brand loyalty and repeat purchases. This hypothesis investigates the connection between consumers' sentiments toward Ulta Beauty products and their loyalty to the brand, including their propensity for repeat purchases.

  • determine the extent to which influencer endorsements significantly influence consumers' purchasing behavior regarding Ulta Beauty products.

This research is a reflection of the beauty industry and the connection to social media.

RESEARCH DESIGN


primary data // A survey was conducted as our primary data collection method. Using a survey to gather data on Ulta shoppers in New Jersey provides a structured and efficient way to collect comprehensive insights into their preferences and behaviors.

fieldwork // Our study employs a quantitative research approach to gather and analyze data on consumer behaviors and preferences regarding Ulta Beauty products .We will then take the data and create an analysis through different platforms such as SPSS, tableau and excel.

Sampling Technique

We will utilize a random sampling technique to ensure representation across different demographic segments. The sample will be stratified based on demographic variables such as age, gender, income level, and geographic location to capture a diverse range of perspectives and experiences.Data Collection MethodThe primary data collection method employed in this study is a structured online survey. The survey questionnaire comprises a combination of closed-ended questions and demographic inquiries. The online survey platform offers convenience and accessibility to respondents, enabling widespread participation.

DATA ANALYSIS

  • Advanced statistical analyses using the powerful features of SPSS and Qualtrics.

  • Frequency tables were meticulously designed to show the distribution and frequency of consumer responses and to identify common trends and patterns in consumer engagement.

  • Descriptive statistics to express the dataset's central tendencies, such as the mean, median, and mode. These measures, along with evaluations of dispersion such as range, variance, and standard deviation, provided a detailed picture of the dataset's distribution.

  • Cross-tabulation with Chi-Square tests was used to investigate the complex relationships between various demographic variables and the impact of social media on consumer purchasing behavior.

  • Analysis of Variance (ANOVA) tests were used to investigate the effect of various demographic factors on consumer attitudes toward Ulta Beauty products.

 

Through this comprehensive analytical process, we provided Ulta Beauty with a detailed understanding of their customers' behaviors and preferences, enabling them to make informed, data-driven decisions that cater to the changing landscape of consumer retail engagement.

RESULTS

Our results showed numerous crucial factors influencing consumer preferences among different demographics. Our results were based on factors such as convenience of location and promotions and discounts.

 

CONVENIENCE OF LOCATION AND CUSTOMER SERVICE IS A PRIORITY

Convenience of location emerged as a priority, particularly among older age groups (27+), although statistical significance was weaker at 0.087.

Customer service held greater importance for older demographics compared to younger ones (18-26), with a significance level of 0.019.

YOUNGER CONSUMERS VALUE PROMOTIONS + DISCOUNTS

Proven by their mean rating of 4.58, compared to the older demographic's mean of 3.77. Significantly, the observed difference of .017 in the importance of promotions and discounts between age groups was significant.

THERE ARE SIGNIFICANT SOCIAL MEDIA USAGE DIFFERENCES

Specifically, the younger demographic (18-26) demonstrated a higher engagement with social media platforms, spending an average of 2.70 hours, contrasted with the older age group's mean of 1.81 hours.

MOST PEOPLE TRUST INFLUENCER CONTENT

Among older age groups (27+), a significant majority, comprising 62.5%, expressed trust in influencer content. The majority of the younger demographic (18-26) appeared indifferent towards influencer-sponsored content. However, when considering both age groups collectively, a majority, totaling 42.5%, displayed trust in influencer endorsements.

Individuals with higher incomes expressed higher trust in influencer-sponsored content, with 50% expressing trust. Those with lower incomes seemed to feel indifferent, with 58.3% expressing this sentiment. Nonetheless, a majority across both income brackets, totaling 42.5%, placed trust in influencer-sponsored content

The data reveals that a significant portion, specifically 73.1% of participants, indeed make purchasing decisions based on influencer recommendations encountered on social media.

PEOPLE PERFER TO SHOP IN STORE RATHER THAN ONLINE

The findings indicate a strong preference for in-person shopping at Ulta over online shopping. A substantial majority, accounting for 57.5% of respondents, opted for in-person shopping, contrasting sharply with the mere 17.5% who favored online shopping. This preference highlights the enduring appeal of the physical retail experience, suggesting that for many consumers, the hands-on and interactive aspects of shopping at Ulta hold greater appeal than the convenience of online transactions.

Overall, our results enabled us to prove our hypothesis that social media has a high influence on a lot of products that are purchased in Ulta Beauty. With these results, we also were able to determine that aside of Ulta Beauty being the ultimate beauty store, demographics and social media ad campaigns along with influencers help promote high end and luxury beauty brands. In conclusion, the results show that Gen Z are the ultimate influencer as this demographic group are what create these social trends.