Estee Lauder's Digital Wake-Up Call: Can AI and Gen Z Reverse Years of Decline?

Estee Lauder EL is finally stepping off the sidelines and into the digital arena. Under new CEO Stephane de La Faverie, the company is rolling out Beauty Reimagineda multi-year plan aimed at restoring growth and lifting margins. After years of resisting mass e-commerce platforms like Amazon and Sephora to preserve its luxury image, Estee Lauder now says the future lies in the fusion of online and in-store experiences. The reality is consumers may discover a brand on social or in a store. There are so many entry points, de La Faverie told investors, signaling a major mindset shift inside the beauty powerhouse.

To lead this transformation, Estee Lauder has hired Aude Gandon, Nestle's former global CMO, as its first-ever chief digital and marketing officer. Gandon brings experience scaling digital strategy across 2,000+ brands and partnerships with Amazon and Netflix. Her role spans everything from online sales to physical store designunderscoring how seriously Estee Lauder is treating this pivot. The company also sees AI playing a key role: helping customers match products based on preferences, scanning social chatter for fast-moving trends, and tightening the feedback loop between product development and consumer demand.

Early signs are mixed. Estee Lauder gained U.S. market share in prestige makeup last quarter, helped by Clinique and Bumble & Bumble. But total North American sales still declined, pressured by weak consumer sentiment. The focus now is on winning younger shoppersthe digital-first crowd that's driving beauty trends worldwide. They're influencing the older generations, de La Faverie noted. If Estee Lauder executes this shift, investors could see the beginning of a long-awaited turnaround storyone that merges data, design, and digital discovery in a very different kind of beauty playbook.