Ulta Beauty has launched an AI app that lets users use their selfies to show instant and realistic previews of their favorite hairstyles. The app is accelerated by Nvidia’s StyleGAN2 generative AI technology which helps create the near-perfect, realistic versions of yourself to apply the changing hairstyles to.
Ulta Beauty is a specialty retailer of cosmetics and personal care products. It was the first to combine luxury and drugstore brands, with salon services, all under one roof, creating a unique shopping experience. With more than 42 million members, its Ultimate Rewards program is the most popular in the beauty industry.
Ulta Beauty’s main products include cosmetics, like foundations, lipsticks, eyeshadows, and blushes; moisturizers and cleansers for skin care; shampoos and conditioners; perfumes and colognes; nail polishes and tools for manicures and pedicures; and in-store salon services.
Ulta Beauty’s cosmetics and skincare products are the main contributors to total revenue with 39% and 24%, respectively. Haircare adds 20%, fragrances generate 11%, and salon services earn approximately 4% of the total revenue.
The company’s end market includes individuals of different ages, genders, and skin tones. Additionally, its collaborations with brands like MAC Cosmetics and Kylie Cosmetics, allow for even more variety of its product offerings. Currently, it only operates in the United States, with approximately 1,400 stores.
While there are many apps out there that allow you to test hairstyles, Ulta’s version uses generative AI to improve the experience. It uses Nvidia’s StyleGAN2 generative AI model, which is known for some unique features. It improves on the original StyleGAN, which was prone to errors and inconsistencies when generating some images. It also offers control over the image at a finer grain level, allowing for more precise editing and manipulations.
The technology is ideal for creating a digital version of a person’s face and then applying manipulations to it, such as hairstyling like in Ulta’s case. Ulta’s stock has gone nowhere in over two years but has sustained the post-COVID gains rather well. The company hopes it can propel itself to the next bull run with the emergence, integration, and adoption of AI into its products and services. It will be interesting to see the public’s response to this technology, though the ultimate success will be measured when it helps the company sell more products rather than just provide an amazing facility.
Ulta Beauty Inc. is not on our latest list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held ULTA at the end of the third quarter which was 46 in the previous quarter. While we acknowledge the potential of ULTA as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as ULTA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
