Dive Brief:
- Ulta Beauty will leverage its loyalty program to improve personalization through AI, executives said on a Q4 2025 earnings call Thursday.
- The beauty retailer’s loyalty membership rose 5% to 46.7 million members in fiscal 2025, according to President and CEO Kecia Steelman. This loyalty ecosystem, alongside first-party data and Ulta’s omnichannel capabilities, will drive the company’s AI efforts.
- “Beauty is deeply personal, and we believe leveraging new AI capabilities will enable us to deliver relevance, inspiration and expertise seamlessly across the guest beauty journey,” Steelman said on the call.
Dive Insight:
Better personalization is a long-term goal for Ulta Beauty, and its earlier investments are already paying off. The company plans to maintain its strategy into the future.
“We will build on our progress across our digital platforms with new capabilities and stronger guest engagement through personalization as we leverage greater automation and real-time content to tailor the guest experience and provide even more value to our loyal members,” Steelman said.
Upgrades like a wish list and an automated marketing engine to deliver timely content across the customer journey improved Ulta’s digital experience, according to Steelman. Guest engagement was high during the holidays, with shoppers taking advantage of the ability to buy from anywhere and have that order fulfilled as a store pickup or home delivery.
Ulta paired its e-commerce improvements with a better store experience through investments in store labor and more than 100,000 in-store events, Steelman said. The effort “highlighted our differentiated in-store experience.”
This strategy helped boost in-store conversions and NPS during fiscal 2025, and Ulta will continue to optimize its brick-and-mortar CX even as it explores AI-powered experiences.
“We will continue to invest in the heart of our experience, our stores, to extend our competitive advantage and capture key growth opportunities,” Steelman said.
The beauty retailer started testing conversational AI capabilities with its customer service team, according to Steelman. The technology has had a positive impact on resolution efficiency and quality.
Ulta is looking into opportunities on “both social and AI-enhanced commerce platforms” as well, Steelman said. The retailer plans to start by introducing a “thoughtfully curated assortment of Only at Ulta brands” on platforms including TikTok Shop.
Executives did not specify which, if any, third-party AI commerce platforms could become future partners.
Ulta reported a solid holiday period, with comparable sales up 5.4% year over year in the fourth quarter of 2025, according to an earnings release. Net sales increased 11.8% year over year to $3.9 billion during the quarter.
The retailer’s CX investments were not without their cost, and they cut into Ulta’s profitability, according to Steelman. However, she also noted that the investments are producing results and positioning the company to hit its financial targets in the coming year and beyond.
