Battle For Dominance In Beauty

In the estimated $110 billion U.S. beauty and personal care market, where Ulta and Sephora compete for retail dominance, Ulta’s partnership with Google could give it a decisive edge. While Sephora has long leaned into AI to optimize the shopping experience, including personalized product recommendations, guided shopping, color matching and virtual makeup assistant, Ulta’s latest move is a big leap forward to where the shopping journey increasingly begins and bring it to its final conclusion at checkout.

Until now, the two have been running largely head-to-head in the beauty retail market. Sephora, part of LVMH’s Selective Retail Group, doesn’t break out results, but both chains operate at a similar scale in the U.S. Sephora has about 500 standalone stores, plus 1,100 Kohl’s shop-in-shops, while Ulta has over 1,500 stores.

Each hold about a 30% share in the prestige beauty market, which totaled $36 billion in 2025, according to Circana. But Ulta’s broader reach into the mass beauty and personal care market suggests it holds a larger share of the overall market.

Ulta generated $12.4 billion in sales during fiscal 2025, up 10% over previous year with a 12% surge in the fourth quarter. On the other hand, Sephora’s U.S. retail partner, Kohl’s, has struggled lately, with net sales dropping from $16.6 billion in 2023 to $14.8 billion last year. Sephora and Kohl’s announced their partnership in August 2022 after a year-long trial run.

Google’s Big Unlock

Ulta has garnered the loyalty of over 46 million customers who generate roughly 95% of its revenue. They will benefit from the greater ability to discover and compare products across Ulta’s current range of 30,000 products from approximately 600 brands—a scale that can overwhelm even the most determined beauty shopper. While 73% of U.S. loyalty members transact exclusively in stores, nearly 20% shop both in-store and online —and those omnichannel shoppers spend three-times more than store-only customers.

That makes the big unlock for Ulta from the Google partnership to be its ability to reach beyond its physical and virtual four walls. Ulta defines its target customer as the “beauty enthusiast,” someone with a “deep emotional connection with beauty.” Ulta estimates there are some 140 million Americans who fit that profile.

Google gives Ulta unprecedented access to that audience at the start of their shopping journey across search, shopping, YouTube, Lens and Gemini.

And operating under the open-sourced Universal Commerce Protocol—a new standard that lets shoppers move from discovery to checkout— Ulta’s extensive catalog of products can be discovered, compared and purchased directly through Google’s AI-driven platform.

“Ulta Beauty engaged early with UCP because we see a clear shift in how guests are discovering and shopping for beauty, with AI playing a much bigger role in that journey,” Ulta’s Maresca said.

Ashish Gupta, vice president and general manager of merchant shopping at Google explained, “Agentic AI has great potential to make online shopping easier for everyone, at every stage in the shopping journey. By integrating UCP, Ulta Beauty is removing friction and helping their customers purchase right at the moment of discovery in AI Mode in Search and the Gemini app.”

And Google Cloud vice president Darshan Kantak added, “Our shopping agent connects the breadcrumbs of intent and inspiration to guide the customer journey. It skips traditional search filters and helps shoppers connect directly with products they love, providing a fast, tailored experience from discovery to checkout.”