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Estée Lauder, a Late Digital Adopter, Makes New Push to Reach Shoppers Online
CEO Stéphane de La Faverie has hired a Nestlé executive to help lead the beauty giant’s digital revamp.
Late to embrace online retail, Estée Lauder is launching a digital push under its new chief executive officer to reverse a yearslong sales slump.
When Stéphane de La Faverie took the helm in January, he announced a revamp that involved meeting customers where they are—which is, increasingly, online. The company’s share price has plunged in the past few years, hurt in part by a pullback in spending by Chinese consumers.
The beauty giant, concerned about its brands’ high-end cachet, was also slow to sell products at retailers like Sephora and Amazon.com. Now its CEO has a different outlook: The future of the beauty industry will exist as a “merger of the digital and the physical world,” de La Faverie said in an interview. And artificial intelligence is changing the way people shop for cosmetics, he said.
Estée Lauder has hired a senior executive from Nestlé to help drive a digital overhaul. Aude Gandon will become Estée Lauder’s first chief digital and marketing officer, helping the maker of Tom Ford fragrances and La Mer face cream compete for consumers in an industry that is becoming more competitive, digital and driven by AI.
Gandon’s remit includes both online commerce and store design, de La Faverie said.
“I don’t see where we sell to be either within four walls or a digital platform,” de La Faverie said. “The reality is consumers may discover a brand or product on social media or in a store. There’s so many entry points. How do you make sure that you retain them through the journey?”
Aude Gandon will become Estée Lauder’s first chief digital and marketing officer.
AI will change the way many consumers mix and match, de La Faverie said. If customers liked a red lipstick, said de La Faverie, they could use AI to suggest and discover complementary products. The company is also mining consumer data and online buzz to identify trends more quickly and create products that capitalize on them.
Gandon, as Nestlé’s global chief marketing officer, led the company’s digital transformation across 188 markets and more than 2,000 brands, while developing partnerships with such companies as Amazon and Netflix, Estée Lauder said.
Estée Lauder’s turnaround plan, called “Beauty Reimagined,” aims to restore sales growth and boost margins over the next few years. The company said it increased its U.S. market share of high-end cosmetics in the quarter ended March 31, driven by growth of Clinique makeup and Bumble & Bumble hair care. But overall, Estée Lauder reported a drop in North American net sales, attributing the decline in part to sinking consumer confidence.
The company’s CEO said he wants to retain existing customers while attracting new ones, particularly young people.
“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.”
Write to Natasha Khan at natasha.khan@wsj.com
