• by Sarah Mahoney  @mahoney_sarah, October 21, 2021

With much of the retail world still expecting beauty consumption to return to pre-pandemic normality, Ulta Beauty is going a different way.

In an elaborate presentation for investors, the retailer said it has "refreshed" its strategic framework with much deeper investments in digital, recognizing that many of the beauty habits its shoppers developed over the last 18 months are here to stay.

That includes ultra-fast fulfillment for digital orders. The company says it is introducing "Beauty to Go," a commitment that buy-online, pick-up-in-store orders will be ready for pickup in two hours or less. It's also launching same-day delivery in select markets. (Rival Sephora announced same-day delivery last week.)

It also took the wraps off a new partnership with Google, using Ulta Beauty's GlamLab Virtual try-on tool for lipstick and eyeshadow with select brands for Google's Search and YouTube platforms.

The Bolingbrook, Illinois-based retailer says it is making significant investments in beauty tech, including a partnership with Adeptmind, an AI retail technology company. It's also launching a $20 million Digital Innovation Fund to help it partner with "innovators, entrepreneurs, early-stage investors, and other agents of change to transform the future of beauty, retail and commerce."

Like many retailers, Ulta is dipping its toe in the ad-sales business, introducing UB Media to harness "the power of our first-party data to transform the way our brand partners can connect with beauty lovers."

Ulta also announced new financial targets, estimating that it will add about 50 new stores a year from 2022 to 2024, and that it expects comparable sales to gain between 3% and 5% in each of those years.

Investors reacted strongly to those downbeat projections, especially given Ulta's stratospheric growth in recent years, with stock price falling following the news.

But some observers aren't surprised at the company’s conservative outlook, especially given COVID-19's persistent shadow over the beauty rebound.

"Ulta's investor day reinforced the company's industry-leading position and growth prospects," writes Mark R. Altschwager, an analyst who covers Ulta for Baird. "We came away with increased confidence that the brand can continue capturing market share as it invests to maintain relevance with an evolving beauty consumer" including "digital-first engagement," he writes.