Molecules and Markets

The relationship between Estée Lauder Companies (ELC) and AI began with the aim of providing customers from diverse backgrounds with the opportunity to feel beautiful. Holding a large portfolio of over 25 prestigious beauty, skincare, makeup and fragrance brands, ELC serves millions of customers across 150 countries. Their relationship and strategy with an AI focus have contributed to turning around their financial performance, helping the firm’s sales growth and expanding its profit margins.

One of ELC’s first major consumer-facing applications of AI emerged in January 2023 with its Voice-Enabled Makeup Assistant. Launched initially in the UK and Ireland, the mobile application used artificial intelligence, augmented reality, machine learning and voice technology to help people with visual impairments apply makeup independently. Its smart mirror technology assessed the placement and uniformity of products such as foundation, eyeshadow and lipstick before providing spoken feedback to users. Rather than focusing purely on efficiency or profit, ELC used AI to make its products and beauty experiences more accessible.

Following this, they’ve continued deepening their relationship with AI. In April 2024, they collaborated with Microsoft and announced the creation of an AI Innovation Lab, expanding a strategic relationship between both companies dating back to 2017. The partnership uses Microsoft Azure OpenAI Service to improve ELC’s speed to market, marketing effectiveness and product development, achieving faster responses and product execution in response to rapidly changing social trends and consumer demands. The internal-facing AI chatbot extracts valuable customer data and allows scientists to deliver in-demand products, enhancing product-to-market effectiveness. Its collaboration with Microsoft’s AI cut the development curve, giving scientists a head start on emerging products and trends and formulating possible ingredients for development. 

This allowed scientists to enter the lab with a stepping stone in research and development, giving ELC an edge on emerging market trends. This would be the first of many partnerships with Microsoft to streamline their business workflows.

In March 2025, ELC partnered with Adobe’s Firefly generative AI, intertwining its marketing department with AI. Marketers’ core scope within a company is to “focus on ideating,” bringing the attention of the world to their firm’s products. Before the integration of AI within ELC, the scope of marketers was hindered by repetitive, minute tasks that posed a significant hurdle, especially considering the numerous different avenues of advertisement. For instance, formatting and resizing advertisements for different devices, avenues and channels. The use of Adobe’s Firefly generative AI removed the need for marketers to manually perform repetitive reformatting tasks. Instead, it allowed them to focus on idea generation and how to artistically reach millions of customers.

During the same month, ELC was recognised on Microsoft’s “Agents of Change” list for its custom AI agent: ConsumerIQ.

Building its personalised and specific agent, ConsumerIQ, massively increased effectiveness and streamlined individual employee workflows. This is one of the many mass-use cases of agentic AI for firms, governments and even military sectors. A specific departmental AI agent is created with knowledge of all the workflows, clauses and scopes of employees in that department; this agent is then open for the rest of the firm to use. Before this, collecting a sample of data would require processing a request from the data department, searching through hundreds or even thousands of files before sending back the desired data set a day or two later.

The agent circumvents this.

With ConsumerIQ, employees in all departments of the massive ELC are connected, and information extraction can be streamlined. An employee in the marketing department can request to see what consumers are prioritising, what future trends look like, and whether customers want a scientific breakthrough, a new routine or better luxury experiences. ConsumerIQ enables data to be collected and presented on the fly, at the fingertips of every ELC employee, greatly increasing efficiency.

This month, September 2026, ELC has yet again taken progressive steps in implementing its latest partnership with Profound, expanding its AI visibility across its global portfolio. Generative engine optimisation (GEO) is the new wave of search engine optimisation (SEO), which was revolutionised by the emergence of generative AI platforms such as ChatGPT, Gemini and Claude.

These investments have occurred alongside an improvement in ELC’s wider financial performance. Fiscal 2026 net sales increased 5% to approximately $15.05 billion, while organic net sales increased 3%. Adjusted operating margin rose from 8.0% to 11.2%. ELC primarily linked the margin improvement to operating leverage, gross-margin expansion and benefits from its Profit Recovery and Growth Plan, rather than AI alone. For this reason, it would be inaccurate to describe AI as the sole cause of ELC’s financial recovery.

Across three years, AI has moved into several stages of ELC’s value chain. The Voice-Enabled Makeup Assistant improved accessibility. Microsoft’s generative AI tools supported marketing and product development. Adobe Firefly reduced repetitive creative work. ConsumerIQ connected decades of consumer research. Profound now addresses how consumers discover ELC’s brands through AI platforms.

ELC’s strategy therefore shows a shift from simply experimenting with AI to embedding it throughout the organisation. The strongest use cases do not remove employees from the process. They remove friction around them.

ELC’s leadership structure also reflects this wider transformation. In September 2026, Brian Franz became Chief Technology & Transformation Officer, expanding his responsibilities beyond technology, data and analytics. His role includes accelerating AI-enabled processes, developing technology skills across the organisation and advancing new ways of working.

Brian Franz, the newly appointed Chief Technology, Data and Analytics Officer, has confidently continued ELC’s relationship with AI, enabling business workflow efficiencies and building the critical infrastructure and skills among its employees to embrace AI and “next-generation ways of working”.