Ulta Beauty is set to enhance its customer personalization efforts by leveraging its loyalty program through artificial intelligence (AI), company executives announced during a Q4 2025 earnings call on Thursday. The beauty retailer reported a 5% increase in its loyalty membership, bringing the total to 46.7 million members in fiscal 2025. According to President and CEO Kecia Steelman, the combination of this loyalty ecosystem, first-party data, and Ulta’s omnichannel capabilities will serve as the foundation for the company’s AI initiatives. “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 stated.
Ulta Beauty’s focus on personalized customer experiences represents a long-term strategy, with early investments already yielding returns. Steelman emphasized that the company will continue to build on its digital platform advancements, enhancing guest engagement through personalization while integrating greater automation and real-time content. New features such as a wish list and an automated marketing engine have already improved the digital shopping experience. Steelman noted a surge in customer engagement during the holiday season, as shoppers utilized the flexibility of buying online while choosing between in-store pickup or home delivery.
To complement its e-commerce enhancements, Ulta has also invested in physical store experiences, including improvements in store labor and organizing over 100,000 in-store events. Steelman highlighted this dual approach, stating it “highlighted our differentiated in-store experience.” These strategies contributed to increased in-store conversions and a higher Net Promoter Score (NPS) during fiscal 2025. As the company continues to explore AI-powered experiences, Steelman confirmed that it will keep investing in its physical stores to maintain competitive advantages and seize key growth opportunities.
Moreover, Ulta has begun testing conversational AI capabilities within its customer service team, an initiative that has reportedly improved resolution efficiency and quality. Steelman mentioned that the retailer is considering expanding its efforts into “both social and AI-enhanced commerce platforms.” Initial plans involve introducing a curated assortment of “Only at Ulta” brands on platforms like TikTok Shop, although executives did not specify potential partnerships with third-party AI commerce platforms.
Financially, Ulta reported strong performance during the holiday season, with comparable sales rising 5.4% year over year in the fourth quarter of 2025. The retailer saw net sales increase by 11.8% year over year, reaching $3.9 billion for the quarter. However, Steelman acknowledged that these customer experience investments impacted profitability. Despite the short-term costs, she emphasized that these initiatives are already delivering results and positioning the company to achieve its financial targets in the upcoming years.
As Ulta Beauty continues to navigate the intersection of technology and retail, the company’s commitment to integrating AI into its operations suggests a forward-thinking approach that could redefine customer engagement in the beauty sector. By enhancing the personalization of its offerings and investing in both digital and physical experiences, Ulta aims to further solidify its standing in the competitive beauty market.
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