How AI Is Transforming Beauty Brands’ Strategies for Cost Savings and Growth

Beauty Brands Integrate AI to Streamline Operations and Cut Costs

Leading beauty companies like The Estée Lauder Companies (ELC), Coty, and Ulta Beauty are actively incorporating artificial intelligence (AI) into their operations. Their goal is clear: reduce expenses, improve communication precision, and enhance forecasting accuracy amidst shifting consumer behaviors and complex global trade conditions.

The Estée Lauder Companies: Regional Communication and Forecast Optimization

ELC is leveraging AI to customize marketing messages for specific markets such as India and France, accelerating communication processes. AI also supports smarter product distribution decisions by analyzing global trends to identify where products will perform best. Roberto Canevari, ELC’s EVP and chief value chain officer, emphasizes that as the AI models evolve, their accuracy in decision-making improves.

Recently, ELC consolidated all technology, data, and analytics roles under Brian Franz, its new Chief Technology, Data, and Analytics Officer. This restructuring aims to remove silos and synchronize tech strategies across the company. The move supports the company’s broader Beauty Reimagined initiative, which focuses on regaining sales growth and operational agility.

ELC’s AI efforts include over 240 customized GPTs available to employees for data analysis and vendor assessment, developed through a partnership with OpenAI. Additionally, a Microsoft collaboration has produced an internal agent that aids marketing and product development by analyzing company archives and data. Despite a net sales decline of 10% to $3.6 billion in Q3 2025, the company is confident in the long-term benefits of AI integration.

Ulta Beauty: Driving Supply Chain Efficiency and Cost Optimization

Ulta’s transformation, branded as Ulta Beauty Unleashed, prioritizes core business growth, scaling new ventures, and foundational realignment. CEO Kecia Steelman highlights the adoption of AI and machine learning tools to enhance supply chain operations, scheduling, and payroll management, directly supporting cost-saving objectives.

After completing a multi-year investment in foundational systems, including an ERP overhaul and a point-of-sale system upgrade, Ulta improved its data governance—a critical step for effective AI deployment. Clean, well-managed data sets are essential for unlocking AI’s full potential in operational tasks.

With over 1,450 stores across the U.S., Ulta reported a 4.5% increase in net sales to $2.8 billion in Q1 2025, though leadership remains cautious about maintaining momentum throughout the year.

Coty: Centralizing Planning and Cost Reduction Through AI

Coty continues its multi-year transformation aimed at margin improvement and cost savings. A key focus is streamlining support functions to realize approximately $130 million in fixed cost reductions, contributing to a cumulative $1.2 billion saved since 2021.

CEO Sue Nabi points to AI as a vital tool in consolidating planning activities into a centralized hub, providing clear oversight and enabling significant cost efficiencies. The initiative is ongoing, with leadership reporting progress during their Q3 2025 earnings call.

Coty’s portfolio includes brands like CoverGirl, Kylie Cosmetics, and Sally Hansen. Despite market uncertainties and foreign exchange challenges impacting sales, the company is committed to leveraging AI to improve operational control and reduce expenses.

Industry Recommendations and Broader AI Applications

Consulting firm McKinsey advises beauty brands to focus AI efforts on high-impact use cases and customizable tools to accelerate value. Key backend applications include:

• Automated sales pitch preparation
• Employee training exercises
• Internal search capabilities
• Demand planning
• Post-call transcription

Other major players, such as L’Oréal, are also advancing AI applications. In collaboration with IBM, L’Oréal is developing AI models to formulate products that align with sustainability goals.

For operations professionals interested in expanding AI expertise applicable to supply chain, data analytics, and automation, resources like Complete AI Training offer a range of courses tailored to various skill levels and job roles.

Conclusion

Beauty companies are integrating AI not as a trend but as a practical solution to optimize operations, reduce costs, and adapt to market volatility. By consolidating technology functions, improving data quality, and applying AI-driven insights, these firms aim to strengthen their operational foundations and improve forecasting accuracy.

Operations teams should monitor these developments closely and consider how AI tools can be applied within their own processes to enhance efficiency and decision-making.