The beauty giant foresee more growth, plans to invest in new digital marketing strategies
Estée Lauder released its first quarter sales results today, revealing a 5 percent increase in net sales to $2.68 billion, up from $2.55 billion in Q1’13. Net earnings for the company were 300.7 million, a slight increase from $299.5 last year.
The company expects continued growth for its full fiscal year 2014, however it does not expect the beauty market to grow as quickly as it did in 2013. Net sales for Q2’14 are expected to grow between 3 to 5 percent, while net sales for the year could increase from 6 to 8 percent. The company hopes that increasing spending in advertising through the second quarter, especially to promote its fragrances during the holiday season, will promote continued sales growth.
In particular, the company is preparing for a “two part digital-media review” in 2014. The company is searching for an agency to handle two $4 million assignments, one to oversee digital media across brands and the other to support digital media optimization and analytics to drive e-commerce revenue. The company hopes to explore strategies in communications planning, media planning, and cross-channel buying via mobile, paid social, and emerging media platforms. In the realms of e-commerce, the company hopes to “optimize performance media for daily sales and revenue targets.”
While these assignments are currently focused in the US, the company has requested that the agencies participating in the review have a presence in the Middle East, Latin America, and Asia. Estée Lauder is most interested in targeting Latin America and China, along with travelers in airports—sites with growing retail sales. This qualification suggests the company is considering future global expansions in an effort to increase the prominence of the Estée Lauder brand and continue strengthening relationships in countries outside of the US.
Digital advertising has been a large investment for the company over the past few years. Estée Lauder is currently ranked 43 on the DataCenter’s list of top ad spenders in the U.S., having spent $906.8 million on advertisements and promotions in 2012. Domestic measured media expenditures cost the company $388.3 million, Kantar Media says. In particular, Estée Lauder’s Clinque recently signed on with Dentsu 360 to consolidate its global marketing business, suggesting that digital spending will only continue to increase for the company in the future. Clinique’s VP of marketing, Agnes Landau says, “What digital allows us to do you can’t accomplish on a TV commercial or in print media. It’s not about brands talking to the consumer. It’s suddenly about conversation.”
An important demonstration of Estée Lauder’s attempts to create conversations with consumers is the recent launch of “The Beauty of Night.” This global digital experience enables women across the world to communicate with one another via computer or mobile and earn special offers for Estée Lauder sample products or services. This new digital offering serves as an important social media strategy that works to connect women and create a global community. Just as Clinique’s Landua describes conversation as an important part of a brand’s identity, Estée Lauder VP of digital marketing, Mary Truffelman Macune, says, “The ‘Beauty of Night’ global exchange ignites a conversation around these shared [beauty ritual] experiences, transcending cultures, languages, and borders.” This digital exchange program, in addition to the upcoming digital media review, proves the company is determined to continue establishing a global Estée Lauder community and defining its brand identity as an integral part of women’s beauty rituals.
