Estée Lauder is embarking on a major digital transformation as it tries to regain lost ground in the global beauty market, following years of stagnating sales and shifting consumer preferences.
Under new CEO Stéphane de La Faverie, the company is embracing artificial intelligence and a revamped omnichannel strategy to reach a younger, digitally native audience.
To accelerate this digital overhaul, Estée Lauder has appointed Aude Gandon as its first-ever Chief Digital and Marketing Officer, the company announced on Wednesday.
Aude Gandon appointed to lead digital charge.
Gandon previously led Nestlé’s global marketing transformation, overseeing initiatives in 188 markets and spearheading partnerships with tech giants like Amazon and Netflix.
Prior to Nestlé, Gandon held leadership roles at Google, including Global Managing Director for Platform & Ecosystems, where she led integrated brand and creative strategies across five continents.
At Estée Lauder, Gandon’s remit will span both e-commerce and retail design.
She will help unify the brand’s messaging and customer experience across digital and physical channels, a task de La Faverie believes is essential in today’s fragmented shopping environment.
“I look forward to partnering with the talented teams there to enhance our digital capabilities, deepen consumer connections, and drive growth across brands and channels,” Aude Gandon said.
How Estee Lauder is exploring digital under de La Faverie
Since taking the helm in January, de La Faverie has signaled a departure from Estée Lauder’s traditionally cautious approach to online commerce.
The company had long resisted selling through platforms like Amazon or expanding aggressively into retailers like Sephora, concerned about protecting its luxury image.
But the new leadership sees that mindset as outdated.
“I don’t see where we should be either within four walls or a digital platform,” de La Faverie said in an interview with WSJ.
“The reality is that consumers may discover a brand or product on social media or in a store. There are so many entry points. How do you make sure that you retain them through the journey?”
Estée Lauder’s “Beauty Reimagined” strategy reflects this shift.
It envisions a future where AI helps shoppers find the perfect lipstick shade and recommends complementary skincare or fragrance products based on real-time trends and customer data.
The company is mining social media and other digital channels to detect emerging preferences and respond with timely product launches.
Youth focus, AI, and cost discipline drive turnaround hopes
Estée Lauder’s plan aims to regain relevance with younger shoppers, whom de La Faverie credits with shaping industry trends.
“Younger consumers are the ones that are driving the trends today,” said de La Faverie. “They’re the ones that are influencing the older generations.”
Recent signs suggest the turnaround could be gaining traction.
The company said it grew its share in the high-end US cosmetics market last quarter, driven by momentum in Clinique makeup and Bumble & Bumble haircare, even as overall North American sales dipped amid weaker consumer sentiment.
Cost-saving measures are also part of the strategy.
Analysts optimistic about recovery path
BofA Securities analysts recently reinstated coverage of Estée Lauder with a “buy” rating and a $110 price target.
The company is currently trading at $86.10, with shares up about 17% YTD. The company’s shares were rising by about 0.5% during pre-market trading on Wednesday.
The analysts said the company’s current plan appears more credible than past attempts, with an emphasis on faster product innovation and earlier entries into growth channels like online platforms.
The New York company’s 10% headcount reduction should also result in $800 million to $1 billion in gross cost savings, which could be redirected to boost advertising or brand investment by 25%, the analysts estimate.
The bank’s analysts project 4% average annual sales growth and a rebound in earnings, helped by more targeted marketing and improving trends in China, a crucial market for the luxury beauty segment.
While challenges remain, including tepid global consumer confidence and stiff competition, Estée Lauder appears to be betting big on technology and brand reinvention to regain its footing.
The post Estée Lauder appoints first ever digital chief amid online retail push to regain growth appeared first on Invezz