00:00The beauty industry has been experiencing its own makeover as personalization, virtual try-ons and AI skin diagnostics become a
00:08part of the everyday shopping experience.
00:11According to independent market research platform Wi-Fi Talents, the global AI beauty and cosmetics market is projected to be
00:18worth more than $13 billion by 2030.
00:21Beauty executives say the artificial intelligence transformation extends from a shift in consumer shopping habits.
00:27Mike Mareska is chief technology and transformation officer at Ulta Beauty.
00:31Consumers are really jumping into AI.
00:34They're using it more and more to not only discover, but increasingly shop and inform their decisions that they make.
00:41And we're really excited about this.
00:43In 2025, we saw really AI-driven shopping jump 115% on Ulta.com.
00:51What kind of AI advancements are you doing on the consumer end?
00:54One area we're actually making great progress is for our online shopper, and that's with our virtual try-on tool,
01:00Clam Lab.
01:01All you have to do is simply upload a photo of yourself, and you can see what these products look
01:06like right on you.
01:08Sephora shoppers get the tech treatment in stores with its Beauty Skin Scan.
01:12It's a device that the consumer can use to capture three quick scans of the face.
01:18It then matches the consumer with the best complexion or skincare products for them.
01:24It's amazing because it works across all skin types and tones.
01:27Last year, we did over 180,000 scans per month.
01:32Nadine Graham, Senior Vice President and General Manager of e-commerce for Sephora, says there's also a digital version.
01:38So you upload a selfie, it scans the selfie, it figures out your primary concerns, and then provides a contextual
01:44overlay, and then creates a four-step product routine.
01:47Add to that an AI beauty chat.
01:49We have product recommendations for them, expert advice.
01:53Elf Beauty uses a global digital experience called Color Elf Analysis.
01:57Chief Technology and AI Officer, Ekta Chopra, describes it as a place where users discover makeup shades to complement their
02:04features and get matched with the Pinterest board of Elf products.
02:08Now they can go in and use this tool to say, hey, during these seasons, what colors would look good
02:13on me, you know?
02:14So that's sort of the idea, is like, how do we use AI in meaningful ways?
02:19But what about a product you can only smell, like perfume?
02:22Estee Lauder is using an AI chatbot built for its Joe Malone London fragrance.
02:27Chief Technology Data and Analytics Officer, Brian Franz, says description is key.
02:32I really like what feels like on the coast of London when I smell the ocean or I smell the
02:39grass.
02:39And when you start to, like, just speak to it and you start to have a conversation with the large
02:45language model,
02:46it's interpreting everything you're saying, and then it's matching.
02:49We have an olfactory taxonomy that we use to try to understand all the senses, and then it matches up.
02:57And so trying to bring together technology, but, like, the real secret sauce is the data
03:02and really kind of looking at what do our scent advisors and our beauty advisors in the store do with
03:08consumers.
03:09Is it working? Are consumers, are more people buying?
03:11When someone actually engages our scent advisor, they're sort of twice the kind of cart size or the purchase.
03:18Beauty companies are also using partnerships to meet the consumer where they are.
03:23Sephora is teaming up with OpenAI to launch its app in ChatGBT.
03:28The consumer can browse the full Sephora catalog.
03:30They can get product recommendations, advice, even link their Beauty Insider loyalty account.
03:35Estee Lauder is working with Shopify.
03:37You can do your search.
03:39You can do your analysis.
03:40Talk to Gemini Pro or, you know, using ChatGBT, and then you can go through and you can purchase,
03:46and then it will check you out through Shopify.
03:49And it's not just online.
03:50AI is reshaping routine tasks in the office.
03:54Elf Beauty uses a number of tools to increase productivity.
03:57When ChatGBT, you know, sort of was showcased in the world, we built our own product called BFLF.
04:03That's our internal ChatGBT that our teams use to write, create, you know, newsletters or product descriptions and things like
04:12that.
04:12The teams are excited.
04:14They're like, oh, my God, I'm getting to do new stuff.
04:17And the mundane work is being done by AI.
04:20AI is the power, and the humans give it purpose.
04:23Ulta is using AI to help drive supply chain efficiencies.
04:27It's getting the product the right place at the right time at the right cost for our guests.
04:30The company also has a strategic partnership with Google.
04:33We were announced as one of their early strategic launch partners for their Agentec AI program.
04:40And we're excited about bringing the best of the Ulta beauty experience to Google and Gemini platforms later this year.
04:48What's the next big thing in AI for beauty?
04:51Yeah, I think it's, I wouldn't call it the next big thing, but Agentec, the opportunity with end-to-end
04:59taking something where you can solve a consumer problem or make a process very optimized.
05:06That's the opportunity.
05:07We just don't chase the next tech trend.
05:09And over the last three years, we've modernized our core operations.
05:13We've made significant investment in our guest-facing platforms to deliver that elevated experience.
05:18We've modernized our data platforms.
05:21And that's really, really, really prepared us well to take on this challenge of AI.
05:26And if you take it with that people-centric approach, I think you'll do well.
05:30We want to lean in there and explore.
05:32I think for us, being helpful in the consumer journey is important.
05:36The world around us is changing.
05:38The number one thing for me is we have to be where the consumer is, and we have to personalize
05:44what the consumer wants.
05:45The world around us is changing.
05:46The world around us is changing.
05:46The world around us is changing.
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