Ulta Beauty Teams Up With Google Gemini on Agentic AI

ULTA is the clearest near-term beneficiary because this moves the company one step closer to owning the highest-intent moment in beauty: product discovery to checkout. The second-order effect is not just incremental conversion; it is lower customer acquisition friction and better monetization of its loyalty graph, which should improve LTV/CAC at the margin over the next 2-4 quarters. If the integration meaningfully shifts browsing into conversational commerce, ULTA can reduce dependence on paid search and partially insulate itself from higher auction costs.

GOOGL benefits less from revenue share than from making Gemini materially stickier in commerce, which strengthens its consumer AI narrative versus other models that still feel like demos. The key strategic upside is data accumulation: every shopping interaction creates intent signals that can be reused across ads, shopping, and assistant workflows, creating a flywheel that is harder for competitors to replicate than raw model quality. The risk is execution—if checkout friction, merchant availability, or recommendation quality disappoints, this becomes a feature story rather than a platform shift.

ELF is the likely relative loser on a positioning basis, not because it is directly harmed, but because ULTA’s move raises the bar for AI-enabled personalization in beauty retail. That can compress share for digitally native brands that rely on algorithmic discovery if they cannot match the convenience layer inside major platforms. Longer term, this may accelerate channel power back toward retailers and search platforms rather than brands, especially for repeat-purchase categories where recommendation quality matters more than brand equity.

The contrarian view is that the market may be overestimating how fast agentic commerce monetizes. Beauty is high-consideration, but not always high-ticket enough to justify a major behavior shift, so adoption could be strong in curiosity but modest in GMV contribution for 6-12 months. That said, even limited adoption is strategically valuable if it shifts share of search and captures first-party data, so the more important trade is relative positioning rather than absolute revenue uplift.