Lauder Prioritizes Digital Sales Without Diminishing In-Store Importance
This article was originally published in The Rose Sheet
The firm plans to maintain its brands’ prestige positioning by judicious partnering with e-commerce distributors and a “digital-first mindset” that extends to the in-store experience. Lauder reports 9% sales growth for its latest quarter and 5% for its fiscal 2017, driven by double-digit gains in travel retail, online and specialty- and multi-channel retailers and from growth across geographies and categories except haircare.
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The retailer of "all things beauty" posted Q2 net sales growth in excess of 20% to $1.29bn. Rumors have been swirling about a possible luxury beauty play from Amazon, but Ulta management is undaunted, telling investors, “We have no blinders on, and we're playing offense.”
"In the end, the profitable brands are still the big brands with great hero products with great repeat, and not the many small brands that generate a lot of noise on trial," Lauder CEO Fabrizio Freda asserted during the firm's third-quarter earnings call. MAC's announced rollout to Ulta doors is among efforts the company is undertaking to reassert hero franchises in new channels and markets.
Lauder brands’ growing presence in Sephora doors and the specialty multi-retailer channel in general doesn’t compromise their prestige positioning – and anyway that’s beside the point, CEO Fabrizio Freda suggests. In an evolving marketplace, Lauder’s distribution strategy is to appeal to Millennials who otherwise might not be reachable.