Cosmetic and Beauty Supply Stores NAICS 456120

May 6, 2026 - Ulta, Sephora Take Divergent AI Paths

• Ulta and Sephora are taking different AI strategies that could reshape US beauty retail, according to a Global Cosmetic Industry report. Ulta is moving fastest toward agentic commerce, embedding shopping directly into Google Search AI and Gemini so consumers can discover, compare, and buy products in one conversation. It is also using loyalty data and its own Ulta AI assistant to deepen personalization. Sephora is focusing earlier in the funnel, using ChatGPT primarily for beauty advice, recommendations, and loyalty engagement before enabling checkout. Together, the moves signal a broader shift for cosmetics and beauty supply retailers: consumers may increasingly shop through AI assistants instead of traditional search or retailer websites, making AI visibility, personalization and seamless checkout critical competitive advantages.
• Walmart and Target are redefining competition in US beauty retail through very different strategies, according to a report in The Street. Target and Ulta Beauty are ending their five-year partnership this summer, eliminating Ulta shop-in-shops inside Target stores and signaling a shift in how Target plans to use beauty space. Walmart, meanwhile, is expanding aggressively into beauty by adding Beauty Bars, dedicated beauty experts in 425 stores, and broader premium assortments. The moves increase pressure on cosmetics and beauty supply retailers as Walmart positions itself as a full-service beauty destination, competing more directly with specialty chains. The shift could intensify price competition, expand mass-market access to prestige beauty products, and force beauty retailers to differentiate through experience, loyalty programs and exclusive offerings as consumers become more value-conscious.

• Expansion by Asian beauty retailer Sukoshi highlights evolving competition in the US cosmetics and beauty supply store industry, according to a report in Personal Care Insights. The Canadian-based chain has opened six US stores since 2025 and plans to operate about 40 locations by the end of 2026, expanding into states including Illinois, California, Texas, and New Jersey. A recent Washington store opening drew hundreds of shoppers, underscoring strong consumer interest. Sukoshi differentiates itself with a curated assortment of more than 200 Asian beauty brands, including K-beauty, J-beauty, and C-beauty, alongside low-price items such as $1 face masks. Industry experts say Asian beauty trends are reshaping North American skincare and cosmetics preferences. For US beauty supply stores, Sukoshi’s growth signals rising competition from specialty retailers offering trend-driven products and value-oriented pricing.
• According to a report by Global Cosmetic Industry, the US cosmetics and beauty supply store industry showed continued growth in 2025 despite economic pressures. Citing Circana data, the report revealed prestige beauty retail sales increased 4% to $36 billion, while mass beauty sales rose 5% to $72.7 billion, with unit sales up 2% year over year. Growth occurred across several product categories. Fragrance was the fastest-growing mass segment, with dollar sales and units both rising about 15%, while prestige fragrance sales increased 5%. Makeup remained the largest prestige category, growing 4%, and hair care was the fastest-growing prestige segment, driven by treatments, styling products, and scalp care, which recorded double-digit growth for the third consecutive year. Overall, the data suggests steady demand for beauty products across price tiers, supporting sales opportunities for cosmetics and beauty supply retailers as consumers continue to view beauty as an accessible indulgence.