Estee Lauder Cos. (ELC) and Microsoft Corp. announced plans to work together on a generative artificial intelligence (AI) project through their AI Innovation Lab. The companies will work on generative AI solutions to accelerate time-to-market and consumer connections with more than 20 Estée Lauder beauty brands, they said in a joint statement.
The AI Innovation Lab will use Microsoft’s Azure OpenAI service.
“At ELC, technology continues to support our enduring strengths in high-quality products and high-touch consumer experiences,” said Jane Lauder, executive vice president of corporate marketing and chief data officer at Estée Lauder. “With Microsoft’s generative AI tools and deep expertise, we are able to leverage ELC’s powerful data to create more personalized consumer experiences and faster action insights, which results in faster time to market and stronger local relevance. We look forward to continuing our close and collaborative partnership with Microsoft.
Estée Lauder ranks 41st in the ranking Top 1000, Digital Commerce 360 database of the largest North American e-retailers in terms of online sales. He works cosmetic brands including La Mer, MAC, Too Faced and others.
How Estée Lauder will use generative AI
Estée Lauder shared two specific ways to use Microsoft’s technology.
First, the company worked with Microsoft to create an internal chatbot that uses AI to improve marketing campaigns. The chatbot uses conversational AI to search Estée Lauder’s database of products and information. Then marketers can use this data to quickly create new marketing campaigns tailored to different countries, Estee Lauder said.
Estée Lauder also uses Microsoft’s generative AI in product development and research. The retailer says the technology allows scientists and development specialists to respond more quickly to product and ingredient trends.
“Generative AI represents a significant opportunity for the beauty industry: creating more engaging customer experiences, getting products into consumers’ hands faster, developing new products more efficiently and sustainably, and much more said Shelley Bransten, vice president of global industry. Solutions at Microsoft. “We are proud to collaborate with The Estée Lauder Companies to provide not only a platform for AI innovation, but also a deep partnership to bring these new innovations to life.
Estée Lauder’s story with AI
The cosmetics retailer is not new to AI. Estée Lauder has worked with Microsoft since 2017, it is specified. In early 2023, it used Microsoft Azure AI to create an AI-powered mobile app for visually impaired consumers.
Voice-Activated Makeup Assistant (VMA) helps visually impaired users apply makeup using voice instruction technology. AI identifies how makeup is applied based on evenness and coverage. It then provides information on applying lipstick, foundation and eyeshadow, as well as advice on any touch-ups needed. The app is available on Android and iOS in the US, UK and Ireland, with additional markets planned, the retailer said.
Later in 2023, Estée Lauder also worked with Google Cloud on another generative AI company. The two companies plan to “collaboratively explore AI-powered solutions to better understand consumer sentiment, inform R&D efforts, and translate the magic of prestige beauty brands into premium, high-sensitivity digital experiences “, they declared in a press release. the weather.
It also used Google’s PaLM 2 broad language model (LLM) to collect data on consumer sentiment through social media and call center operations.
Estée Lauder Income
Estée Lauder reported that its net sales increased 5%, to $3.94 billion, during its fiscal second quarter ended March 31.
Skin care accounted for the largest share of sales, accounting for $2.06 billion during the quarter. This represents an 8% increase from $1.92 billion a year ago. Makeup sales also increased, up 3% year-over-year to $1.14 billion. Fragrance sales remained almost flat at $575 million. Meanwhile, hair care sales fell 3% to $143 million.
Estée Lauder cited the success of Clinique’s debut in the U.S. Amazon Prime Beauty Store, which “significantly exceeded our retail sales expectations,” it said in a press release.
In the previous quarter, the retailer announced that it lay off 3% to 5% of its global workforce this year. The job cuts affected up to 3,100 of the beauty retailer’s 62,000 employees.
The layoffs are part of a multi-year plan to rebuild profit margins in 2025 and 2026, Estée Lauder said.
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