Ulta Beauty Model Seen as Resistant to AI Disruption
What happened
Ulta Beauty is being highlighted as the largest U.S. specialty beauty retailer with a business model that is resistant to disruption from artificial intelligence. The assessment, discussed on BNN Bloomberg, suggests a bullish outlook for the retailer's physical and service-oriented strategy.
Why it matters
- Ulta's in-store experience is central to its strategy, with the typical 10,000 sq. ft. store format dedicating approximately 950 sq. ft. to a full-service salon offering hair, skin, makeup, brow, and lash services. - The company's physical retail growth remains strong, with comparable sales—from stores open at least 14 months and e-commerce—increasing 6.3% in the third quarter of fiscal 2025, driven by increases in both transactions and average ticket size. - As of late 2025, the retailer operated 1,500 stores across all 50 states and recently acquired UK-based retailer SpaceNK, adding 83 stores in the UK and Ireland as part of its international expansion. - In a major strategic shift, Ulta and Target have mutually agreed to end their "store-in-a-store" partnership; the 600+ Ulta Beauty locations inside Target stores will close by August 2026. - While its physical stores provide a defense, Ulta is actively leveraging AI, having acquired tech startups like QM Scientific for AI-powered recommendations and GlamST for its augmented reality "GLAMlab" virtual try-on feature. - The company's Chief Technology and Transformation Officer, Mike Maresca, has outlined plans to deploy AI agents to assist store associates with in-the-moment customer engagement, such as pulling up past purchases and making product recommendations. - Ulta's loyalty program, Ultamate Rewards, is a key data source for its AI-driven personalization, with its members accounting for roughly 90% of the company's sales. - The preference for in-person shopping in the beauty sector remains a significant factor, with one survey finding that 90% of Gen Z consumers—a digitally native demographic—would rather shop for beauty products in-store.
Key numbers
- - Ulta's in-store experience is central to its strategy, with the typical 10,000 sq.
- store format dedicating approximately 950 sq.
- The company's physical retail growth remains strong, with comparable sales—from stores open at least 14 months and e-commerce—increasing 6.3% in the third quarter of fiscal 2025, driven by increases in both transactions and average ticket size.
- As of late 2025, the retailer operated 1,500 stores across all 50 states and recently acquired UK-based retailer SpaceNK, adding 83 stores in the UK and Ireland as part of its international expansion.
What happens next
- In a major strategic shift, Ulta and Target have mutually agreed to end their "store-in-a-store" partnership; the 600+ Ulta Beauty locations inside Target stores will close by August 2026.
- The company's Chief Technology and Transformation Officer, Mike Maresca, has outlined plans to deploy AI agents to assist store associates with in-the-moment customer engagement, such as pulling up past purchases and making product recommendations.
Quick answers
What happened in Ulta Beauty Model Seen as Resistant to AI Disruption?
Ulta Beauty is being highlighted as the largest U.S. specialty beauty retailer with a business model that is resistant to disruption from artificial intelligence. The assessment, discussed on BNN Bloomberg, suggests a bullish outlook for the retailer's physical and service-oriented strategy.
Why does Ulta Beauty Model Seen as Resistant to AI Disruption matter?
Ulta's in-store experience is central to its strategy, with the typical 10,000 sq. ft. store format dedicating approximately 950 sq. ft. to a full-service salon offering hair, skin, makeup, brow, and lash services. The company's physical retail growth remains strong, with comparable sales—from stores open at least 14 months and e-commerce—increasing 6.3% in the third quarter of fiscal 2025, driven by increases in both transactions and average ticket size. As of late 2025, the retailer operated 1,500 stores across all 50 states and recently acquired UK-based retailer SpaceNK, adding 83 stores in the UK and Ireland as part of its international expansion. In a major strategic shift, Ulta and Target have mutually agreed to end their "store-in-a-store" partnership; the 600+ Ulta Beauty locations inside Target stores will close by August 2026. While its physical stores provide a defense, Ulta is actively leveraging AI, having acquired tech startups like QM Scientific for AI-powered recommendations and GlamST for its augmented reality "GLAMlab" virtual try-on feature. The company's Chief Technology and Transformation Officer, Mike Maresca, has outlined plans to deploy AI agents to assist store associates with in-the-moment customer engagement, such as pulling up past purchases and making product recommendations. Ulta's loyalty program, Ultamate Rewards, is a key data source for its AI-driven personalization, with its members accounting for roughly 90% of the company's sales. The preference for in-person shopping in the beauty sector remains a significant factor, with one survey finding that 90% of Gen Z consumers—a digitally native demographic—would rather shop for beauty products in-store.
