The UK remains the cosmetics maker’s second-largest market after the US, representing more than 8% of total company sales and an even greater share of profits.
And it is also the land of opportunity for growth and a good blueprint for other markets according to its management.
“Our business in Europe, the Middle East, and Africa was strong,” said Fabrizio Freda, President and CEO, on an earnings call after the second quarter results.
“The UK has done a phenomenal job embracing the Company's strategy with outstanding execution, strategic innovation, and local relevance. There are many lessons we have learned in the UK that are applicable to other markets, which will foster future gains around the world.”
Estée Lauder is the leader in the UK for Prestige beauty and second for Total beauty, with both growing, on average, 5% and 3-5% respectively for the last few years.
According to Chris Good, President, UK and Ireland, although clearly a mature market, he views the UK as an emerging one as the company looks to pursue high-growth opportunities across geographies, channels, categories, and consumer segments; an approach that has resulted in three years of growth trending well above the market.
“The UK is one of the world's most diverse nations and a top tourist destination. We go to great lengths to offer the most ethnically appropriate mix of business at every counter… [and] ensure our staff and merchandising is well suited to the consumers of each location,” he says.
There is also a focus in the UK on product categories, as Prestige skin care continues to grow modestly; and there is more optimism when looking at specific subcategories within skin care.
“If you look at specific subcategories within skin care, there is good growth to be had if you have the right product and the right targeting,” says Good.
With a number of established brands posting strong growth in the UK, and having developed brands from small players to market leaders over the years, Good is also optimistic about the company’s latest acquisitions, such as Frederic Malle and Le Labo, which he says have ‘tremendous potential.’
He also sees the UK has having great potential for mobile commerce too, as it has a higher percentage of mobile shoppers than any other European country, and Estée Lauder has the top five mobile sites for beauty, according to industry think tank, L2.
“Going forward, we remain optimistic about the macroeconomic situation in the UK and confident in the continued growth in prestige beauty,” Good adds.