Mike Maresca, chief technology and transformation officer at Ulta Beauty, is coming off the high of completing an IT-led modernization project that cost tens of millions of dollars. Next on his plate is expanding the company’s adoption of artificial intelligence, including agentic AI.
“We had to really rethink and modernize our core systems,” says Maresca. “We believe it is powering the omnichannel retailer that we want to be, particularly as we make sure that the inventory is in the right place at the right time for our guests.”
Known as Project SOAR (short for “strengthen, optimize, accelerate, and renew”), the recently-completed, multi-year initiative is described as the most significant IT-led overhaul in the company’s 35-year history. Maresca’s team replaced older SAP legacy systems with new ones that are said to better manage inventory including providing more detailed real-time supply chain data.
Omnichannel retail unites shopping across stores, online, mobile, and social media—ideally creating as little friction as possible for customers despite the increased complexity. The expectations of shoppers has also gotten higher: The brands they want, including the buzzy upstarts they see online, must always be available. Sometimes shoppers want products shipped directly to their homes, but also desire the option to buy online and pick up in stores, or place orders through Ulta’s external delivery partners like DoorDash and Instacart. And then of course, Ulta has to maintain and present beauty and cosmetic products pristinely in physical stores.
“You have to know what’s in the store because you can offer it to your guest,” says Maresca. “We were not up to the minute like we are now. It was very hard to meet the guests’ needs.”
Ulta rolled out SOAR in three phases beginning with corporate functions, before moving to the company’s seven distribution centers, and then last year, finally reaching more than 1,400 stores. Maresca says the push will better equip Ulta Beauty as it expands in Mexico and the Middle East later this year.
Investing in technology to better manage inventory will play a critical role for the retailer during what CEO Kecia Steelman has acknowledged will be a transition year. Last year, Ulta lost market share in the beauty category and in response, is accelerating efforts to bring newer brands into the store and launch an online marketplace to expand offerings to e-commerce shoppers.
Steelman, who was promoted from COO to CEO in January, has already made several C-suite changes, including elevating Maresca from chief technology and information officer. Before joining Ulta in June 2023, he spent nearly three years as chief technology officer at drugstore retailer Walgreens Boots Alliance and 25 years at professional services company Accenture, where he mostly focused on retail clients.
When it comes to generative AI, Maresca says Ulta’s internal use of the technology is skyrocketing through the use of tools like Google’s software coding assistant, Gemini Code Assist, and a test of Microsoft’s Copilot chatbot. “IT is well into its adoption and we’re seeing about 25% to 30% improvement in terms of productivity,” he says of the AI coding tool. “I think any CIO would sign up for that.”
He’s also excited about the potential for agentic AI. Already, Maresca is exploring how AI agents could more efficiently elevate tech help requests from stores, such as when a printer goes down or there’s a networking issue. He’s also excited about agentic AI’s potential to perform tasks in distribution centers, including moving orders across Ulta’s network.
Maresca created an internal AI Center of Excellence, which pulled together experts from across the organization including AI and machine learning engineers to improve business functions and to develop new technology. The hope is that members of the team can get in touch with each business function—sales and marketing, finance, and supply chain, for example—and present generative AI ideas that will resonate with those teams and improve how they work.
In addition to the AI hyperscalers Ulta is working with, another key partnership is with software company Adobe. The goal is to work together to leverage the data of Ulta’s 44.6 million loyalty program members and present them with more personalized marketing messages.
While the project is still fairly new, Ulta wants to generate unique images and text so that shoppers who visit the company’s website or app will see a mix of goods based on their past history along with the products that Ulta wants to pitch. Generative AI tools can make it easier to create more of that personalized content.
Today, all of Ulta’s loyalty shoppers are put into four buckets, but Maresca hopes to make those segments more detailed in the future—but only up to a point. “I don’t think it’ll be 44 million segments, but that is the high-level goal,” says Maresca.
John Kell
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NEWS PACKETS
Intel promotes new CTO. Intel CEO Lip-Bu Tan, who ascended to the role last month, has reportedly promoted the company’s networking chip leader Sachin Katti to chief technology officer and AI chief, according to a memo seen by Reuters. It’s the first big move for the new CEO as he tries to turn around the struggling chip maker, which has fallen behind Nvidia in the AI chip race. Katti, who is also a professor at Stanford University, joined Intel in 2021, and as CTO will oversee the overall AI strategy and product roadmap. He succeeds Greg Lavender.
When customer support AI goes wrong. Since the generative AI boom started in late 2022, many businesses have infused AI into their customer service operations. But things can go wrong if companies fail to add enough “humans in the loop,” as Fortune reported about Anysphere’s AI-powered software coding assistant Cursor. Last week, the AI startup’s customer support went rogue by telling customers who were logged off when switching between devices that it was due to a new policy. But there was no new policy—the bot was merely hallucinating, or making up an explanation. Customers ended up being enraged by the company’s response.
Nvidia’s CEO makes his AI pitch in Japan, China. While traveling across Asia, Nvidia CEO Jensen Huang visited Beijing, where he lauded China as an important market—even after the U.S. banned the company from selling its H20 AI chips in China. A few days later, Huang visited Japan to meet with Prime Minister Shigeru Ishiba to advocate for more electricity generation to meet the increasing energy needs of running AI. Huang told reporters after the meeting that Japan is well positioned to develop AI, given the nation’s leadership in other sectors like robotics and industrial manufacturing, but that generating and creating AI will require new energy infrastructure.
ADOPTION CURVE
CIOs are increasingly in charge of AI. Eighty-six percent of CIOs are leading corporate AI-related initiatives, up dramatically from just 31% a year ago. The findings, from a quarterly survey by KPMG, show that businesses are trying to reduce the workload of their CEOs, who had previously led the initiatives in high numbers.
But Steve Chase, VP of AI and digital innovation at KPMG U.S., warns that CIOs already have a full plate in overseeing IT, cybersecurity, migrating their businesses to the cloud, and upskilling their workforces. “A lot of stuff is piling up on the CIO’s desk,” he says. “There needs to be enough space to do business transformation, change management training, and some things that aren’t necessarily hallmarks of technology programs.”
KPMG’s survey is based on responses from 130 U.S.-based executives and business leaders from organizations with $1 billion or more in annual revenue. Those organizations now anticipate they’ll spend $114 million on generative AI over the next 12 months, up from $89 million in the prior quarter. Both figures represent a weighted average from respondents.
A majority say they are piloting AI agents (65%), but only 11% have deployed them widely. Chase says that’s a reflection of CIOs and other technologists acknowledging that AI agents—intended to perform more complex work tasks, ideally autonomously—present greater risks and will require more concrete and responsible AI frameworks before their use is expanded.
JOBS RADAR
Hiring:
- Redwood Credit Union is seeking a CIO, based in Santa Rosa, Calif. Posted salary range: $400K-$453K/year.
- Bank of America is seeking a VP of technology, based in New York City. Posted salary range: $230K-$240K/year.
- Togetherhood is seeking a head of engineering, based in New York City. Posted salary range: $125K-$250K/year.
- CampusWorks is seeking a CIO, based in Canton, NY. Posted salary range: $155K-$185K/year.
Hired:
- Estée Lauder (No. 259 on the Fortune 500) announced the appointment of Brian Franz as chief technology, data, and analytics officer, effective April 21. It's the first time the cosmetics giant has combined all those roles, enabling Franz to oversee IT as well as the consumer-facing digital experiences. He joins from financial-services firm State Street, where Franz was most recently EVP and CIO. Franz has also previously served as CIO at Diageo and PepsiCo.
Every Friday morning, the weekly Fortune 500 Power Moves column tracks Fortune 500 company C-suite shifts—see the most recent edition.
- QXO announced Val Liborski as CTO, effective April 21. Liborski joins the building-products distribution company after most recently serving as CTO for Yahoo. He was also previously CTO for meal-kit company HelloFresh and led engineering and product management at cloud provider Amazon Web Services.
- Arqit Quantum appointed Jonathan Nguyen-Duy as CTO. Prior to joining the cybersecurity provider, Nguyen-Duy held leadership roles at chip maker Intel and cybersecurity company Fortinet. He was also previously security CTO at telecommunications giant Verizon.
- CPT Group, which provides class action settlement administration services, announced Trevor Jones as CTO. He was previously a consultant for CPT Group and held leadership roles at TV manufacturer Vizio and software provider Veritone.
- BayPort Credit Union named Jonathan Harrell as CIO, where he will oversee the financial institution’s IT strategy. He succeeds Denise McRoberts, following her retirement, and joins BayPort after most recently serving as VP of IT with Langley Federal Credit Union. Harrell also spent 23 years with Regent University in various roles, including CIO.
- Cyber AI Group appointed Peter J. Morales as CTO for the company created in 2023 to acquire multiple cybersecurity and IT services firms. Previously, Morales served in various leadership roles for the nonprofit the Council on International Educational Exchange, including as CIO and CISO, and was an adjunct professor at New York University.