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Estée Lauder: Online business looking brighter than ever

By Andrew MCDOUGALL , 30-Aug-2012
Last updated the 31-Aug-2012 at 00:09 GMT

Cosmetics giant Estée Lauder states that the future looks bright for its online business and will continue to grow in the digital arena as an integral part of the company’s marketing efforts.

Social and digital media play a huge role in the company’s overall strategy, as Estée Lauder were industry pioneers with these platforms: rolling out social media and ecommerce campaigns for each of its beauty brands and regions.

The luxury fragrance and cosmetics player reported a strong rise in full year and third quarter sales, with third quarter figures up nine percent on a reported basis to $2.25bn, which led to a 22 percent jump in net earnings, to $52.2bn.

The future’s bright…

Speaking to analysts following the announcement of the results, Dennis McEniry, president of Online at Estée Lauder, explained how profitable the online business is and will continue to be in the coming years.

“Online has grown tremendously in many ways. Sales have tripled in the last 5 years, with compounded annual growth of over 27 percent,” he said. “Our big brands are winning online and represent more than half of our division sales.”

In 2012, the New York-based firm launched e- and m- commerce sites in six new markets, bringing its total of 15, with plans of an additional 6 more countries added to that.

Online and mobile commerce booming

Online sales have seen dramatic growth for the beauty firm in the last year, even in markets experiencing an economic slowdown.  The new player though, according to McEniry, is mcommerce.

“One of the most exciting developments is the growing adoption of mobile devices worldwide. We have seen double-digit month-on-month increases in mobile traffic in every region,” he explained.

With this in mind, Estée Lauder will ramp up its mobile and tablet-friendly mcommerce sites allowing consumers to engage with its brands wherever they may be.

Social for interaction

The company will also continue to utilize social media in a more traditional way; for consumer insights.

“As consumers give feedbacks through product ratings and reviews, we use this information to improve products and packaging. Consumers also likely to get credible feedback from other consumers, who are an important influence in buying beauty products,” said McEniry, who explained this means Estée Lauder can tailor its marketing and merchandising efforts appropriately.

“The future of our online business looks bright. Over the coming years, we plan to launch e- and m-commerce in dozens of new markets, both alone and with retail partners, as well as establish more brands online in countries where we currently have a presence,” he said.

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