In its latest annual report, the US-headquartered firm claims that dynamic consumer trends are expected to shape prestige beauty for the next 10 years; two of which are the rise and influence of the Millennial consumer and the Ageless consumer.
The Millennial concerns individuals between the ages of 15 and 35, while the Ageless consumer represents individuals over the age of 50.
Focusing on these trends have already seen a number of new products launched in the UK, such as the New Dimension brand launched in the summer offering skin care and make-up products that create visible definition for a beautiful, more contoured looking face – meeting one of the year’s bug trends.
“Estée Lauder is continuing its efforts to modernize its image by reaching out to a wider demographic, including the Millennial generation,” says the company.
“Initiatives include collaborating with Millennial influencers around the world, producing branded content across their social media platforms and introducing Kendall Jenner as a new spokesmodel… she is helping us to introduce Estée Lauder to a whole new generation of consumers.”
Identifying innovation in heritage markets
According to Estee’s President and CEO, Fabrizio Freda, the UK, as one of the company’s heritage markets, is leveraging its strengths in the fastest growth areas by tailoring product assortments and communications to fit local tastes and preferences in cities and neighborhoods with ethnic diversity, and this has seen great success.
EMEA accounts for 38% of the global net sales for the company in 2015, and the UK, as the largest market in the region, has seen big growth.
In the UK, sales in fiscal 2015 grew faster than overall UK prestige beauty, as the company opened new freestanding stores at major transportation hubs and in tier two and tier three cities.
“Our team in the United Kingdom, our second largest market [globally, behind the US], is producing remarkable results, with net sales in constant currency growing double-digits, by directing our resources and attention to secondary cities and brands and products with the greatest potential,” says Freda.
“As one example, our team recognized an opportunity to leverage the convergence of hospitality and art in retail, and launched a Smashbox shop in Box Park Shoreditch, a pop-up mall with fashion and lifestyle stores and events in East London, to better reach consumers directly and provide them with an immersive experience.”
The US and UK markets represent approximately 45% of Estee Lauder’s worldwide sales and while both remain a key focus for the company, it also notes that in the next 10 years consumers across emerging markets will represent a good chunk of sales.
In its annual report, Estee Lauder states that it expects approximately 25% of the industry’s estimated global retail sales to come from emerging markets in a decade’s time, and that it has made significant strategic investments to capture the growing affluent populations in these markets.
“We continue to focus resources on our group of emerging markets, which includes Russia, China, the Middle East, Turkey, South Africa and Mexico, and this strategy is a key building block of our international growth,” it says.
“MAC’s strong gains in emerging markets contributed to its stellar global growth in fiscal 2015. The brand is our largest in many emerging markets, including Brazil, Turkey, Sub-Saharan Africa and the Philippines. MAC is now available in more than 100 countries and territories.”