Ulta swapped big-box DCs for market fulfillment centers (interview)
Chief supply chain officer Erik Lopez explains Ulta's MFC model — 300,000 sq ft centers serving 120 stores and 25,000 e-commerce orders a day.
What was changed
When Ulta Beauty began its current supply chain transformation in 2021, it deliberately refused the industry's default of building ever-larger distribution centres that sit underused much of the year. 'We don't want to just build a one-size-fits-all network because we have growth, but our growth is not just going to be vertical', chief supply chain officer Erik Lopez told Supply Chain Dive.
The target model: four regional distribution centres (about 650,000 sq ft each), three market fulfillment centres of about 300,000 sq ft, and one 'fast' fulfillment centre. Two MFCs — Greer, South Carolina and Bolingbrook, Illinois — are live, each able to serve up to 120 stores and 25,000 e-commerce orders a day on the highest-moving inventory. The business-wide ERP upgrade, Project SOAR, unlocked the cross-docking capability the MFCs depend on: 'Without the cross-dock functionality, we wouldn't be able to open up the market fulfillment centers.'
Rather than replacing facilities, Ulta retrofits them: Greenwood, Indiana got automated receiving and shuttles, Dallas is next, and a fourth RDC in Chambersburg, Pennsylvania breaks ground in 2026, with a third MFC in the Pacific Northwest following in 2027. The Jacksonville fast fulfillment centre handles up to 25,000 e-commerce orders a day, strengthening a ship-from-store programme that has grown from a five-store test in 2019 to more than 500 stores, feeding omnichannel options from buy-online-pickup-in-store to DoorDash same-day delivery.
Why it worked
It documents a retail supply chain choosing a staggered, small-footprint network over the giant-DC convention.
The ERP project and the network design are connected: cross-docking from SOAR is what makes the MFC model possible.
Retrofitting existing centres kept employees upgrading their skills instead of being replaced by automation.
What can be applied
Don't overbuild for peak: smaller market fulfillment centers are faster to build, sit closer to demand and scale in steps — retrofitting beats replacing when the goal is steady capability growth.
Aftermath
The transformation is still under way: construction starts in 2026 on the Chambersburg RDC and the Pacific Northwest MFC (opening 2027), and Ulta expects to streamline all facilities onto a single consistent operating model. No financial results of the programme were reported.