Certain key criteria as to why Estee Lauder outstandingly performs as it does even after 74 years of the brand's existence.

1. LUXURY BEAUTY: A look at Estee Lauder
Submitted By: Elvina Reji
#105003198
Date : 15th March 2020

2. Business of Beauty: Estee Lauder Companies
• Prestige beauty is a thrilling, profitable and diverse business, an
d we're at the top leading the way with an outstanding 25 + bra
nds collection being the only organization devoted to
respectable skin care, lipstick, scent and hair treatment.
• $14.86 billion Net sales | 25+ Prestige brands | 48,000
Employees | 150± Countries and Territories
• From the millennial generation, to the ageless customer, to
women in emerging markets— changing demographics reshape
the beauty world of reputation. Increased spending strength,
new shopping patterns and tastes, and higher interaction in
digital and social media have a profound impact on how we do
business.
• In 1946 Estée and Joseph Lauder founded the firm in Midtown
Manhattan, New York City. They set up their first Saks Fifth
Avenue (HBC.TO) department store partnership in New York.
EL's products are sold under several brand names in more than
150 countries and territories, including Estée Lauder, Clinique,
MAC and Bobbi Brown.
• In the high-end cosmetics industry, brand loyalty and word of
mouth play a major role throughout consumer purchases, as
compared to size. In general, consumers would trust the tried
and true product, particularly when it comes to skincare
products.
Source: Estee Launder Companies Inc.
2

3. Estee Lauder’s timely strategic acquisitions and investments are a key to its success
Source: Seeking Alpha 3

4. Impacts of every strategic acquisitions and investments made by Estee Lauder helped them cater to the niche
segments which otherwise they wouldn’t have been able to focus in the market.
 Estee Lauder made purchases and developments in businesses that cater to millennials, the cosmetics industry ' most desirable market
category.
 In the Makeup divisions, it bought Too Faced and Becca Cosmetics throughout 2016. Such companies are renowned for their make-up
items that match various skin tones, including foundations, primers, and highlighters. Development strategies for the company include
harnessing its stronger brands, territories, and platforms to fuel more development.
 Several investments made in the last few years have also improved the fragrance market.
 The company announced in June 2017 that it will invest in Deciem, a brand that, like the new acquisitions by Estee Lauder, is focused
mainly on young makeup consumers and varied skin tones. Deciem's unique products are overwhelmingly popular and increasing its
global presence will help Estee Lauder build on this appeal and grab a larger chunk of the global skin care sector.
 Luxury brands are a key driver of development for the company: for several years, their luxury brands such as La Mer, Jo Malone and Tom Ford have produ
ced double-digit growth.
 Skincare is the most significant segment within the range of Estee Lauder. Currently consumers demand items such as masks and oils beyond the
traditional skin care formulas such as moisturizers and serums. Estee Lauder has a significant research and development arm. The acquisitions in the areas
of beautifying mask and oil-based treatments may satisfy the growing demands.
 Estee Lauder is also widening its role by moving more of its products through the world's specialty-multi retail channels. This outlet is particularly
attractive to the millennial makeup consumers, nowadays a desirable niche for most cosmetics firms. Even in the US, for example, where the footfall falls
in the brick-and-mortar stores are a challenge for the business its sales through pure play cosmetic companies such as Ulta Beauty and Sephora continued
to grow.
Source: Nasdaq
4

5. Estée Lauder Companies is responsible for 24 of that list's beauty brands. Some of its interests comprise fashion brands Donna Karan, Michael
Kors, Tom Ford, Tommy Hilfiger, and Tory Burch beauty and fragrances, each of which has its own collection of cosmetics or toiletries.
The company also has quite a few well-known beauty brands, including Aveda, Bobbi Brown, Clinique, La Mer, and MAC Cosmetics.
Estée Lauder made an estimated $21.3 billion in beauty sales in 2019 (Source : Beauty Packaging)
5

6. Future Outlook of Estee Lauder
• All of Estee Lauder brands grew double digits: Increased sales growth led by excellent results from international
markets, particularly China and other emerging markets, skin care category, travel retail and online channels globally.
• Enduring consumer interests: All four biggest brands of EL each with annual sales of over $1 billion, grew globally
resonating with consumer interests in establishes brands and desirable products.
• Improved data analytics: Improved data analytics and consumers insights fueled successful innovations & digital
marketing, increase franchises continued to power EL’s portfolio.
• Increased Earning Per Share: Leveraging sales gains and maintaining a disciplined operational & financial focus helped in
rising earning per share significantly – making investors happy.
• Venturing into new market & segments: Detecting opportunity or realizing existence of emerging new trends or niche
consumer segments and building brands suiting their unique needs & requirements.
• Increasing product categories: Indulging in innovating new products in different product categories such as skin care,
hair care, make up, fragrances.
• Beauty community under on Umbrella: True initiatives of either acquiring or merging or even developing individual
brands catering to certain niche markets or consumer needs from 1943 to now to make sure the entire beauty industry
is under the same Estee Lauder brand portfolio.
6