Even in a year when macroeconomic conditions and tariffs present challenges to Ulta Beauty, the retailer has found ways to grow sales — and its leadership has credited how Ulta uses artificial intelligence (AI) for improving outcomes along the way.
Some of these improvements have been behind the scenes. In May, for example, Kecia Steelman, president and CEO at Ulta Beauty, summarized the impact AI had during the company’s fiscal first quarter.
“Our teams are adapting well to our new ways of working and we are steadily advancing our optimization efforts,” she told investors on a May 29 earnings call. “During the quarter, we leveraged new AI and machine learning capabilities to drive supply chain efficiencies and launched scheduling and enhanced payroll management tools to optimize our efforts and support our cost saving goals.”
Still, the Illinois-based retailer, which operated 1,473 Ulta Beauty stores as of Aug. 28, has been deploying AI solutions for years to improve its ecommerce capabilities and customer experience.
How Ulta Beauty uses AI for interactive experiences and personalization
In 2024, Ulta Beauty added a new generative AI hair try-on feature to the GLAMlab experience on its website and mobile app. Using Nvidia’s StyleGAN2 technology, which leverages a neural network architecture to generate hyper-realistic images, the new tool offered customers a means to visualize how new hair changes could look on them before making purchases.
“Shoppers need to try out hair and makeup styles before they purchase,” wrote Juan Cardelino, Ulta Beauty’s director of the computer vision and digital innovation department, in a blog post for Nvidia at the time. “As one of the first cosmetics companies to integrate makeup testers in stores, offering try-ons is part of Ulta Beauty’s DNA — whether in physical or digital retail environments.”
That launch followed other augmented reality (AR) and AI experiences in GLAMlab, including skin analysis and product recommendations. The company announced in 2022 that it was working with the technology company Haut.ai to develop new AI skin-analysis capabilities.
Ulta’s focus on AI for personalization
When Ulta Beauty acquired QM Scientific in 2018, the move came in the wake of existing work to create an AI-enabled recommendation engine for shoppers.
Ulta considers data-driven insights generated by AI to be a major advantage for its personalized beauty experiences. As a result, the retailer claims to achieve “meaningful customized suggestions that drive traffic to purchase.” To do so, it uses a custom-built machine learning framework to provide recommendations for that discovery process.
In addition, its AI investments go further, thanks to Ulta’s Prisma Ventures fund. There, the retailer’s corporate venture arm counts AI-focused companies such as Haut.ai, Adeptmind and Iterate.ai in its portfolio.
Plans for AI agents
Agentic AI, which encompasses use cases for automating tasks and enabling software to act on behalf of users, is also part of Ulta Beauty’s transformation strategy. Those can involve operational tasks, such as those that Steelman previously described. But their impact may extend to shoppers’ decisions as well.
“Some of the agents we can deploy to our associates so that they’re in the moment with our customers and we can advise them on how to best engage them, pulling up past purchases and making product recommendations,” said Mike Maresca, chief technology and transformation officer at Ulta, in a July story published by CIO Dive.
Ulta’s efforts are reportedly still young on the agent front, but Maresca said in the interview that “the power of agents is really going to come to life next year as part of the Ulta Beauty story.”
Ulta Beauty ranks No. 35 in the Top 1000. The database is Digital Commerce 360’s ranking of North America’s leading online retailers by annual web sales. There, the company appears in the Health & Beauty category. Digital Commerce 360 projects that Ulta Beauty’s 2025 online sales will reach $2.53 billion.
Ulta Beauty web sales by year
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