Ulta Levels Up Rewards with Gamified Loyalty Program

Beauty retailer Ulta Beauty has partnered with gamified loyalty program company Hang to pilot a new gamified loyalty program called GlamXplorer, currently available to a select group of Ulta Beauty Rewards members. One thousand top–spending Ulta loyalty program customers were chosen to try the e-commerce experience when the soft-launch kicked off. Eight months later, the company is now revealing the results of the pilot.

GlamXplorer features 42 mini-games, including “21 Questions,” “Word of the Day” and memory games, as well as timed challenges and 30 quests involving virtual makeup try-ons using Ulta’s VTO GLAMlab. The more that a customer engages with these activities, the more rewards they receive. Rewards are personalized based on customer preferences and include gift cards, discounts and beauty products.

This program will supplement Ulta’s Ultamate Rewards Program, rather than replace it. The company has not disclosed when it will open it up to all its customers. It is currently accessible via an Ulta-provided web link.

“We are investing in innovative technologies and disruptors that enhance beauty discovery, through rewarding and engaging experiences for our guests,” said Michelle Pacynski, vp of digital innovation at Ulta Beauty about the gamified loyalty program. “With one of the largest loyalty member bases in beauty, we were compelled by Hang’s unique approach to gamifying member experiences, allowing us to explore new ways to transform beauty rewards.”

Ulta Beauty and Hang have formed a strategic partnership, with Ulta investing an undisclosed amount in Hang through its innovation fund, Prisma Ventures.

GlamXplorer’s mini-games incorporate elements from popular mobile games. For instance, the “Word of the Day” game was inspired by the viral success of the New York Times’s Wordle. Players are given three guesses to identify a beauty-related word. Successful guesses are rewarded with virtual loot boxes containing a variety of real life rewards, like discounts and product offers.

The program has fostered a community of beauty enthusiasts who connect on social media platforms including Reddit to discuss the games and prizes. Participants are actively sharing their experiences and seeking advice, with questions like “Did anyone get the GlamXplorer 21 questions answer today?” receiving numerous responses. 

According to Matt Smolin, co-founder and CEO Hang, Ulta’s existing loyalty program boasts around 40 million users, making it one of the largest in the industry. Despite this success, Ulta recognized the need to create more engaging and personalized experiences for its members. Sephora’s Beauty Insider program reportedly has 34 million members.

The traditional loyalty program model, which involves customer spending money to earn points and then redeeming those points for product rewards, has become monotonous and transactional, according to Smolin. Although effective to a certain extent, they lack the excitement, engagement and personalization necessary to keep customers interested over time.

“Loyalty programs are more needed than ever today,” he said. “Acquisition costs have doubled for marketers, making it crucial to maximize the value of existing customers.”

Smolin said that GlamXplorer’s incorporation of virtual loot boxes has been particularly effective. Players receive a randomized reward for completing certain actions, keeps users engaged.

The results from Ulta’s pilot program have been impressive. Eighty-six percent of players who participated in the mini-games returned the following week. On average, users engaged with the mini-games six times per week, spending a median of 11 minutes per session. To date, GlamXplorer has seen over 68,000 quest completions. 

Another critical aspect of Ulta’s new loyalty program is personalization. Smolin said that future GlamXplorer experiences and rewards will be hyper-personalized to each customer using AI, based on their preferences and behaviors. Their purchasing and engagement history across e-commerce and social will be considered. This will ensure that customers receive rewards that are meaningful and valuable to them, further enhancing their engagement and satisfaction. 

Gamification is gaining traction across various industries. Companies like the New York Times and LinkedIn have introduced mini-games to drive user engagement, which is proving effective.

The success of Ulta’s gamified loyalty program shows that, by incorporating gamified elements and leveraging technology for personalization, brands can create more dynamic and rewarding experiences for their customers. 

On March 18, Ulta reported a 10.2% year-over-year increase in its fourth-quarter net sales, to $3.6 billion.

Source: Glossy

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