Coty Looks to Drive $20M Savings With AI- and Data-Driven Business Optimization
Beauty company and fragrance manufacturer Coty is implementing a five-pillar strategy to accelerate operational agility and future-proof the business. It expects to yield cost-savings results as early as Q1 2025.
Artificial intelligence is at the core of this initiative. The company plans to leverage it across multiple functions, including robotics process automation and testing, vendor invoices, and procurement, as well as content creation and iteration within marketing.
Additionally, Coty is in the process of standardizing its data across global functions through a new demand planning solution that will be powered. As part of this effort, the company is consolidating two global planning hubs into one center in Barcelona.
During a call with investors, CEO Sue Nabi said the company is looking to significantly improve its forecast systems, using AI within the single hub to have a clear control tower on planning and improve forecasting accuracy. She also expects to see benefits related to supply chain excess and obsolescence, reducing instances of over-forecasting that lead to too much inventory.
“It's going to optimize our net revenue, optimize the gross margin, and also improve the collaboration with our retailers,” she said.
Other Pathways Toward Optimization
Coty recently completed its ERP migration to S/4 HANA. Expected benefits include increased operational efficiency and cost savings related to automation, standardization, and more control over global processes.
Other areas of focus for the company include streamlining functional capabilities into centers of excellence, adapting the organization for increased omnichannel needs, reducing time to market to just a few months with the launch of its Agile Beauty multi-functional organization, and redesigning its regional footprint to better allocate resources toward opportunities for growth.
The company expects approximately $20 million in cost savings related to all of these efforts for the first quarter of 2025, with further benefits expected in Q2 and beyond.
