Ulta swapped big-box DCs for market fulfillment centers (interview)

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.

Two MFCs live, each serving up to 120 stores and 25,000 e-commerce orders a day; ship-from-store grew from 5 stores in 2019 to 500+ (self-reported in the interview).

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.

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.

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.