In a recent discussion at the WWD Beauty CEO Summit, Stéphane de La Faverie, the newly appointed CEO of Estée Lauder Cos., emphasized the evolving landscape of the beauty industry, pointing out critical structural shifts that demand attention. During a conversation with Beauty Inc editor Jenny B. Fine, he distinguished between cyclical events—such as economic downturns and societal changes—that have shaped the industry and the deeper, more enduring transformations currently underway. Reflecting on his extensive career, de La Faverie noted that while the industry has historically emerged stronger from various crises, today’s structural changes are unlike anything he has witnessed before.
As the global beauty market expands, nearly 900 million new consumers are set to join the middle class, significantly influenced by regions like China, India, and Southeast Asia. De La Faverie highlighted the importance of connecting with these emerging consumers, especially in a diversifying American market. He pointed out that the Latina community is projected to become the largest racial group in the U.S. by 2060, presenting unique marketing opportunities. Similarly, growth in Middle Eastern populations in the U.K. signifies the need for brands to evolve their outreach strategies. This demographic shift calls for a more nuanced understanding of consumer needs and preferences.
In addition to changing demographics, distribution methods in the beauty sector are evolving. For more significant impact, Estée Lauder had previously avoided Amazon, but recent strategic moves, such as launching Origins on the platform, signal a shift towards embracing new distribution channels. De La Faverie remains optimistic about these structural changes, asserting they will ultimately strengthen the industry overall and enhance the company’s adaptability in a fast-changing landscape.
Recognizing that Estée Lauder faced challenges post-pandemic, de La Faverie launched his “Beauty Reimagined” strategy to revitalize the company’s approach. This initiative aims to position Estée Lauder as a consumer-centric leader by emphasizing speed, responsiveness, and innovation. He articulated five main pillars for this strategy, starting with an acceleration in consumer engagement and distribution. As the market continues to evolve, he underscored the necessity for brands to prioritize consumer preferences over traditional brand-driven strategies as a crucial pathway to success.
Efficient operations are another aspect of de La Faverie’s strategy, which includes workforce reductions aimed at streamlining the company’s structure. The executive acknowledged the complexities in travel retail and proposed transforming it from solely transactional to a more immersive, experiential model. Additionally, in recognizing the importance of artificial intelligence in business growth, he perceived AI as an ally rather than a threat, underscoring its potential for enhancing operations and customer relationships.
As discussions about portfolio management and potential acquisitions arise, de La Faverie reiterated his commitment to every brand in Estée Lauder’s portfolio and remained open to opportunities for expansion. He humorously invited independent brands to initiate conversations during breaks, signaling readiness for collaboration. Reflecting on modern leadership amidst volatility, he emphasized the need for emotional intelligence and trust-building as essential components of effective leadership in today’s fast-paced corporate environment. By fostering unity and shared purpose within the organization, he aims to lead Estée Lauder toward a resilient and innovative future.