Estée Lauder Embraces AI to Stay Ahead in the Fast-Paced Beauty Industry
In today’s rapidly evolving beauty landscape, staying ahead means moving fast. The Estée Lauder Companies Inc. (ELC), a global leader in the beauty industry, understands this imperative. To accelerate its product development cycles, ELC is collaborating with Microsoft, integrating Microsoft 365 Copilot and other AI-powered tools to analyze consumer data, identify emerging trends, and streamline marketing processes.
Consumer Insights at Their Fingertips
Estée Lauder, with almost eight decades in the beauty business, has a vast trove of consumer data from surveys, clinical trials, and product usage. Leveraging Copilot Studio, Azure OpenAI Service, and Azure AI Search, ELC built ConsumerIQ, a custom agent designed to provide employees immediate access to this data, a significant competitive advantage. This allows marketing teams, for example, to quickly research consumer preferences and tailor products accordingly.
According to Jayesh Mehta, a brand technology leader at Estée Lauder and a member of its AI Task Force, “This is now as simple as asking a question and getting an answer. Bringing the information (to) the fingertips as opposed to waiting for somebody to go research and bring that output three days later.”
This initiative is part of Estée Lauder’s broader transformation initiative, “Beauty Reimagined”, aiming to make the company more efficient and agile. AI, specifically Microsoft Copilot and related tools, plays a pivotal role in achieving transformative innovation and operational efficiency.
The Power of Generative AI
The beauty industry stands to gain significantly from generative AI. McKinsey & Company estimates that generative AI could generate between $9 billion to $10 billion in the beauty industry globally by January 2025. Shelley Bransten, Microsoft’s corporate vice president for Global Industry Solutions, noted in April 2024 that generative AI helps “creating more engaging customer experiences, getting products into the hands of consumers faster, developing new products more efficiently and sustainably and much more.”
Addressing Data Complexity
One of Estée Lauder’s challenges is managing consumer data spread across its nearly 25 brands and operations in approximately 150 countries. ConsumerIQ addresses this by analyzing archives and drawing on data to deliver rapid insights for marketing campaigns and new product development. Instead of spending hours reviewing documents, employees ask ConsumerIQ to find trends, such as “What are the latest trends for mascara use among Gen Z?” The agent then quickly collects, summarizes, and delivers the answer.
Shilpa Niranjan, a global IT business partner at The Estée Lauder Companies, emphasizes the efficiency gains: “I don’t have to read through 300 documents anymore. I just ask the question and it goes in precisely and runs through the entire data set and then gives me the answer.”
Trend Studio: From Data to Action
ELC’s generative AI ecosystem also includes Trend Studio, another agent built primarily with Azure OpenAI and Azure AI Search. This tool is designed to identify market trends, recommend products, generate marketing copy, and even provide Virtual Try-On Technology to show how a product will look on a customer. This streamlined process helps Estée Lauder get the right products to consumers faster.
Speed and Agility as Strategic Goals
The primary goals of ConsumerIQ and Trend Studio are speed and agility. These goals connect directly with Estée Lauder’s corporate transformation pillars. These tools enable faster decision-making and simplify how employees work.
Kalindi Mehta, global vice president for consumer foresight, strategy and predictive analytics at Estée Lauder, points out that whereas, “Beauty startups may be able to leap on the latest TikTok trend, but they don’t have 80 years of market knowledge like Estée does. And now Estée has the technology to harness it.”
These AI-powered instruments free employees from time-consuming tasks and facilitate rapid product development and market adjustments.
The Future of AI at Estée Lauder
According to Alexa Higgins, a global client director at Microsoft working with Estée Lauder, “They’re really looking at this as an AI platform and they can continue adding modules that enhance the experience to essentially…accelerate the time from detecting a trend on TikTok, matching it to a product and then making that marketable to the consumer in a way that they’re asking to receive it.”
Jennifer Lee, director of strategic initiatives and predictive analytics at Estée Lauder, adds, “It’s all part of our innovation mindset of ‘Hey, we need to be faster to leverage these technologies to enable our business in a new and different way. It’s really increasing our speed to be able to compete in the marketplace.”
In the future, Estée Lauder envisions agents that streamline operations, such as manufacturing training. Overall, Estée Lauder is investing in AI to transform the business from top to bottom.
