By Allison Collins on October 29, 2019
With Ulta Beauty chief executive officer Mary Dillon, what you see is what you get.
Dillon, described as curious, consistent and collaborative by her employees, has presided over Ulta’s biggest boom.
In the six years since she was appointed CEO, the beauty retailer’s business has completely transformed. The company has gained consistent points with consumers, going from “not very high” awareness, per Dillon, in September 2013, to 56 percent unaided awareness and 91 percent aided awareness in 2019. It’s also made headway with brands which, for the most part, didn’t used to clamor for space on Ulta’s shelves. But now mainstream lines including MAC and Lancôme, plus big-time indies like Benefit, Too Faced and It Cosmetics all count Ulta as an integral part of their U.S. distribution strategies. The retailer has also become a home for digitally native brands like Kylie Cosmetics, Morphe and Juvia’s Place, that are seeking offline sales growth. Soon the retailer will branch out of the domestic market for the first time, with a store set to open in Canada.
So far, under Dillon’s leadership, the Bolingbrook, Ill.-based Ulta has more than doubled in sales. The company posted $2.67 billion in net sales for fiscal 2013, and $6.72 billion for fiscal 2018.
That growth has been propelled in part, by industry dynamics. Beauty in the U.S., where Ulta’s stores are, has experienced explosive gains over the past six years due to a combination of selfies, Instagram and influencers. According to Euromonitor, the U.S. market has grown by 18 percent, from $75.7 billion in 2013 to $89.5 billion in 2018, during Dillon’s tenure at Ulta.
But another part of that growth has been propelled by Dillon, a first-generation college graduate who talks more about the soft skills of leadership — collaboration, inclusivity, consistency — than about being in charge.
“I’ve been working in business for, gosh, over 35 years now, so everybody’s leadership style is a work in process. But as I look back I realize that so much of what I do today is based on how I’ve been as a leader throughout my career, I’ve just gotten more concerted and intentional about it,” said Dillon, the recipient of this year’s Edward Nardoza CEO Creative Leadership Honor. “At the highest level, I try to lead through a set of values…in a presence that’s really just authentic. Literally, I just met two lovely beauty founders yesterday and I said to them, ‘With me, what you see is what you get. The same person shows up every time.’ If you work in our stores you’d meet me and it would be just the same as if I’m meeting with the ceo of a larger company. Consistency about being authentic and accessible is just really important to me.”
Part of that is Dillon’s background. Her father worked at a factory. She’s had various jobs since she was about 13 years old, “for spending money — buying my first bike, or buying clothes at The Limited when I was in high school.” She worked to put herself through college.
“I had all sorts of jobs,” she said. “That gives you a sense of being humble. What I try to hold on to is really what I learned at those times.
“Today, I run a company where we have over 45,000 employees and a lot of folks are doing jobs I did when I was younger — stocking the shelves or ringing at the cash register or talking to customers. So to me, if I can simply connect with our front-line associates, show them respect, listen and learn, then at a minimum that will make us extremely successful,” Dillon said.
The success of store associates is especially important for Ulta, which still does about 85 percent of its sales in its more than 1,200 brick-and-mortar doors. “That’s because people love the experience. So my job is to make that experience as great as possible, and make the associate experience as great as possible,” Dillon said.
With that in mind, Dillon describes “listening” as one of her core job responsibilities. Sometimes, that includes implementing associate-suggested changes at the store level.
Around the busy holiday time, one store associate suggested Ulta acquire wraps around the bottom of store displays so items could be restocked more efficiently, Dillon said.
“An associate said, ‘it would be a lot better if we could have wraps…so we can put all the extra product under there so when it sells out we can just reach under and refill it.’ That doesn’t sound like rocket science, but it was something that we had missed and simply could do. So the next year we created it in a way so they could restock that faster,” Dillon.
Another time, an employee brought up that someone had been ordering the wrong tissue box sizes for the makeup displays.
“Somewhere along the way we started buying tissues in a flat box instead of a square box, and guess what? They don’t fit in the makeup stand because the makeup stand holds a square box,” Dillon said. “An associate pointed that out to me — and nobody’s doing anything wrong, I’m sure we were getting a better price on the flat box maybe than the square box at the time. But at some point in the system those decisions are made, and then I can say, ‘hey listen, thank you, we’ll go fix it,’ because it’s common sense.”
Dillon, who worked at Osco Drug at one point, did not always have her own merchandising ideas implemented.
“When I first started, I worked in the candy and tobacco department because literally those came off the same truck. And simple things I’d see about how products were organized — why are flavored cigars next to candy? — Nobody asked me my opinion about those at the time, but I really try to remember that and understand that some of the best ideas will come from those discussions,” Dillon said. “What’s more important is the big picture, which is our associates feeling valued. The experience they have at Ulta and the way it translates to a guest experience is meaningful.”
That is part of the reason Dillon goes to so many stores. The trips are documented on her Instagram account — @ultabeauty_ceo — where she frequently posts photos of her posing with store workers.
At one recent back room powwow, Dillon brought together about 30 store leaders in San Francisco.
“For folks to hear my perspective on things, things like diversity and inclusion and our growth trajectory, for me to be hearing from them to get some suggestions for things we can improve on, it’s very meaningful. That is a big difference — I have associates tell me in store that they haven’t experienced that before,” Dillon said.
It helps that she’s not there to secretly pass judgment. “When I go to visit a market, I try to bring together as many general managers from across a market area that I can to sit down, just sit in the back room, and talk. I don’t go there to inspect, I’m not doing surprise inspections — that’s not my job. My job is to listen to our associates, and it’s a really informal dialogue around what’s working, what’s not, how can we get better,” Dillon said.
Kecia Steelman, Ulta’s chief store operations officer, frequently goes with Dillon on those store visits.
“There’s no question that’s ever off-limits,” Steelman said. “She’s led that, to have an atmosphere where people can ask the questions that might not be the questions that are popular to ask, but they are the questions on people’s minds. When you have an environment where you’re encouraging the tough questions to be asked and [then] follow back up, it really gives a lot of power and autonomy to the people who are on the front lines running the stores.”
The store environment is also a place where Dillon’s innate curiosity comes into play.
“She thinks about, ‘what’s the question behind the question?’” said Jeff Childs, Ulta’s chief human resource officer. “When an associate’s asking something, not only is she conscious about what it is they’re asking about, but [she’s] truly trying to uncover what’s behind that.”
“She’s very honest with her team,” Steelman said. “You don’t ever really wonder what she’s thinking, or is there a hidden agenda. There’s never a hidden agenda. She’ll ask the question, she’ll be very transparent.”
That talk-it-out spirit is part of Ulta’s culture, which Dillon and colleagues described as more collaborative than combative. “We’re supporting each other,” Dillon said. “This is about Ulta Beauty winning, it’s not about competing internally, we’re competing externally. And because we’re a growth company, people can have plenty of opportunities and still have that mind-set. There are a lot of companies — and I’ve worked at a few of them — where it’s an internal competition all the time.”
“I was here when Mary arrived at Ulta Beauty, and from the moment she walked in the door, it was like she was a breath of fresh air because she’s so curious,” said Tara Simon, senior vice president of merchandising at Ulta. “Not being an expert in beauty, which she continues to state and I keep telling her maybe she doesn’t have to say that anymore, so curious and so kind and so comfortable relying on her team and their expertise.”
Steelman described the work environment as “healthy.”
“I’ve worked at places before where it was highly competitive. People had to win, or people had to lose. It was a toxic environment. That’s not how it is here. We win together. Having winners and losers is not winning at the end of the day,” Steelman said.
Taking competition out of the mix is something that has allowed Dillon to build a cross-functional team environment, something she experienced earlier in her career that she says allowed her to “thrive.”
“It’s not just to make everybody agree or to have harmony all the time. It’s that truly better solutions are derived when you’re bringing in the perspectives from different parts of the business,” Dillon said. In senior executives, Dillon said she looks for functional expertise, collaboration and enterprise thinking.
“I know some functions better than others — but I have the humility to say I’m not an expert in everything, so I need my team to be experts. It’s kind of hard to get all three of those things in one person,” Dillon said.
“She’s never shown up with any ego in the game,” Simon said. “She’s never walked into the room like she knows all the answers. She’s quite the opposite.…She asks a lot of questions and she listens a lot. That has helped all of us become better leaders. I’m speaking for myself — it certainly has helped me slow down, listen more, and also it gives me comfort in that I don’t have to have all the answers; I have to listen and learn and learn from my team. Since she leads that way, we all follow suit, and there’s less pressure to have to hit your button first to have the answer.”
“Honestly, you can’t fake that and you can’t necessarily teach it, but I feel fortunate that I’ve built a team and they’ve built teams and so on that really share that consistent set of values,” Dillon added.
Part of that values set includes corporate social responsibility — Ulta is involved with Save the Children, the Breast Cancer Research Foundation and Dress for Success, Childs said. “That’s something [Mary] brought to Ulta Beauty — before she came, we had a singular focus…now we have a broader focus, and many of us that are in senior leadership positions in the company, she’s really encouraged us to spend the time outside of the office…on things we’re passionate about,” Simon said.
Internally, it also includes hiring and promoting people who are teamwork-oriented, Childs noted.
One of the stars of Dillon’s leadership team is Dave Kimbell, Ulta’s president, chief merchandising and chief marketing officer. They met in the early Aughts at Pepsi, working on food brands, and reconnected at U.S. Cellular when Dillon was ceo and Kimbell worked as cmo. He joined Ulta about six months after Dillon.
“He and I have grown up in a similar type of work environment, I knew he understood and could operate [in a cross-functional] way,” Dillon said.
“I’ve worked with her at several different places, and I’ve done that because I enjoy working with her,” Kimbell said. “It’s such a positive empowering style that she brings. Her broad approach is to build great high-performing teams that she can provide thought leadership to, direction, inspiration, but also very much allows and encourages her team to drive their part of the business or bring new ideas.”
“She is just an open, honest, authentic, real person, and that comes through in how she leads and inspires her team,” Kimbell continued. “One of the things that’s really important to her is building relationships with her team and across the company, and she does that in a very natural way.”
Kimbell is not the only hire Dillon brought on from before her time at Ulta. Childs was Dillon’s first hire when she joined the company. “He had worked for me once before and absolutely shared my values and my leadership philosophy and I needed him to help me build a team that did that,” she said.
“She has many strengths, but [one] leadership attribute is her own personal humility,” Childs said. “She prides herself on and does a phenomenal job of surrounding herself with strong leaders — it is the collection of the team’s performance, if you will, with her leadership, that causes success, and she recognizes that.”
Part of Dillon’s appeal is in her regular-ness. She had humble beginnings. She buys her own coffee, and does her own shopping (she will be wearing Armani to the WWD Honors Dinner, she said). When she travels, even for family trips to Michigan, she plans to pop by Ulta stores “just to say hi to folks.” She brings her husband on those store visits, and most of the time, he stays in the car, reading.
“I have a lot of responsibility as the ceo, so humility is great, but I think just being able to be just a regular person sometimes is important,” Dillon said. “If you are to be believed as an authentic leader, you have to be consistent in how you show up every day. Probably for me, I stay very grounded with my family, whether its my husband and my four kids or my extended family. I’m still very much in the world that I came from so I’m not trying to pose as anybody more important.”
At work, she simply goes by “Mary.”
“It’s not Ms. Dillon, it’s not Mrs. Dillon — it’s Mary,” Childs said. “That speaks volumes about how she engages with our 45,000 associates. They think of her as ‘Mary.’”
That human-ness shows up at all levels of the organization, her team said.
“There will be times she’ll share with me, as a sitting ceo, some of the things that she feels like she could have even done better, and I think to have the confidence not only in herself, but to share those life lessons with me as someone who aspires to do more. You don’t get a front seat and an opportunity to have that kind of exposure,” Steelman said. “Her being willing to share helps all of us get better.”
Kimbell and Childs noted that while Dillon has evolved as a leader, she’s never lost sight of herself, and that her approach to work and life is consistent.
“There isn’t a lot of difference between where she wears her ceo hat and when she wears her personal hat,” Childs said. “I don’t find that’s true with a lot of leaders, but for Mary, if you go back to the authenticity of who is is, there isn’t a big difference between the two. In one conversation it can feel very personal in terms of her caring about my own development or my own experience and at the same time, we can be talking about one of the biggest challenges or opportunities the company may have. That flows very easily for her.”
It hasn’t always been so easy for Dillon to integrate work and life, she noted. She’s a mother of four, but now that she’s an empty nester, she can more easily soften the boundaries between work and life.
“This is a really fun thing about being at my life stage right now…I have four children, when they were little I would say it was harder, but right now it’s really wonderful that I can blend my Ulta Beauty life and my regular life together all the time,” Dillon said. “Wherever I go, whenever I’m traveling, even if I go to Michigan or something for a weekend, my family knows that part of the drill is we’re stopping by Ulta stores.”
Dillon said she is “living and breathing Ulta a lot” — that includes getting her brows done at Ulta stores, her hair cut by an Ulta stylist and the occasional facial. But she balances that out with family time and working out. “I exercise every day,” Dillon said.
Ulta’s rise in the U.S. coincided with one of the largest beauty booms ever, which was driven by makeup. But the market is changing, and today skin care is outpacing makeup growth, and the U.S. market broadly is slowing down. But Dillon said Ulta is prepared to weather those challenges, noting that both teens and Latinas — big shoppers that make up a significant part of Ulta Beauty’s core beauty enthusiast customer — are still into buying beauty.
“Mary has certainly helped us elevate our profile and tell our story. Our financial success with Wall Street I think helps, too — not with the consumer, I don’t know that the consumer knows that — but it has certainly helped with brands and with people wanting to do business with us,” Simon said, noting that Ulta’s diversification should help it through market shifts.
“The beauty category is a great category to be in, it’s full of innovation and innovators. And our model, Ulta Beauty’s model, is truly winning in the marketplace. We’re gaining market share at almost every category that we operate in, the guest experience just keeps getting stronger and better so our starting point is strong,” Dillon said. “We have a very deep knowledge set around the segment of shoppers we call the beauty enthusiast…it really is about a mind-set. Ulta Beauty is perfectly designed to tap into this mind-set, which is folks that are really into the beauty experience, really into newness and trend and across all categories from makeup to skin care to hair care to fragrance. They also really love the physical experience of shopping for beauty.”
At Ulta, where hair, brow and skin services are a significant portion of the mix — those options give shoppers an added reason to show up in stores.
“While there may be some shifts at times about what’s driving which parts of the category, if people are using more or less, we participate in all the categories and we see that as being able to drive growth,” Dillon said.
While many factors have contributed to Ulta’s growth — “Mary drove all of those,” Kimbell said — her ability to look at things through the lens of the consumer has been particularly helpful, he noted.
“She doesn’t approach things like, ‘I’ve got all the answers, I’m here to solve the issue.’ She’s more team-oriented and encourages debate and discussion,” Kimbell said. “One of the biggest things…that she’s done is focus on creating a positive, enthusiastic, consumer-focused culture.”
At the core, Dillon said she’s trying to create an commendable retailer that also serves as a thought leader and job creation engine.
“At a high level, we really would love to be seen as one of the most admired retailers from all perspectives, whether it’s guests, associates, investors, brand partners — we strive for that every single day,” Dillon said. “I would like for us to be known as bringing real beauty to a space that’s very inclusive, and very much about people finding their own possibilities in beauty, versus it having to be a certain way.”
Success to Dillon also means job opportunities for the company’s 92 percent female workforce. “I think we’ve had 5,000 promotions just in the last few years alone,” she said. With a store target of 1,500 to 1,700 stores in the U.S., building the workforce is likely in store.
On a personal front, Dillon is aware that her position as a woman helming a public company is not to be taken lightly. “The good news is the number of women ceo’s in the Fortune 500 is growing,” Dillon said. “At this stage of my career, I consider it more important than ever to really be a role model and understand the challenges for people to achieve their aspirations, whether they’re women or people of color, or people that are non-gender binary, people that are disabled, there’s a lot that is happening that are barriers for people. I’ve achieved a lot, more than anybody in my circumstances could have dreamed of, but I would say even more so, I want to be able to help reach their goals and see that everything is possible.”