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Estée Lauder says digital will strengthen retail relations

By Andrew McDougall+

19-Aug-2014
Last updated on 19-Aug-2014 at 17:28 GMT2014-08-19T17:28:58Z

Estée Lauder says digital will strengthen retail relations

Having invested further in the digital space, Estée Lauder CEO Fabrizio Freda believes it will strengthen its relationship with its retail partners rather than take away from it.

Speaking on the back of record-breaking fourth quarter and full year results , the cosmetic maker’s boss was very direct in saying that all the digital investment made is to complement retail partnerships.

“We are constantly working side to side with [its retail partners] to support their eCommerce and their digital expansion of activities,” he says.

“So all the customers, which have the retail partners which have the best dot com activities are also the one which delivers the strongest brick-and-mortar sales.”

Strong connection

Freda explains that there is a clear strong connection between success of the retailer online and success of the same retailer in brick-and-mortar, which is why the company is adopting this Omni-channel approach, as it believes it is ‘the future’.

Estée Lauder also sells directly to consumers through its own direct sites , as well as its own brick-and-mortar stores, and again Freda insists this is not competing with retailers but rather enhancing the company’s business.

The beauty firm’s boss explains that it’s freestanding stores, such as for brands like MAC, are used in order to penetrate the markets where Estée Lauder’s retail partners are not.

Not competitive

These direct sites and stores also help to create flag-shipped brand equity building activities and show creativity and strength, or to complement high traffic areas.

“But they are never used in competition with our retail partners,” says Freda.

“So all the move to direct online and in brick-and-mortar is actually a great move for accessing the consumer around the world and to develop the brand equities and our wholesale business is actually benefiting from these activities in a big way. So my view is very positive and very constructive.”

In its final quarter results posted this week, sales increased by 13%, up from $2.41bn to reach $2.73bn, a figure that was not impacted by foreign currency translation, but one that was given a positive boost from the effect of accelerated retail orders.

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