At Estée Lauder, “e-commerce has become a business unit in its own right”

By November 08, 2013
Bruno Alazard

Here we take a look at the digital strategy at the Estée Lauder group. In 1997, the beauty products giant was an e-commerce pioneer with its Clinique brand, and last year it was nominated the company with the highest ‘Digital IQ’ by US consulting firm L2.

Interview with Bruno Alazard, Internet and CRM Director at Estée Lauder Companies, on the sidelines of the Hubforum event which took place in Paris on 10 and 11 October.

L’Atelier: Estée Lauder launched itself into digital in 1997 with an e-commerce site for Clinique. Within the company’s overall digital strategy is the emphasis still clearly on e-commerce?

Bruno Alazard: Absolutely. We’re focusing strongly on e-commerce. Among other things, that allows us to measure ROI much more easily. Several weeks ago we announced figures, which showed just how important e-commerce is to the company today. It accounts for 5% of sales. On a turnover of $10 billion, that amounts to $500 million. We’re also seeing a very strong growth rate, with excellent profitability too. At Estée Lauder, e-commerce has clearly become a business unit in its own right, at global level.

In general one associates luxury brands directly with the idea of service. How do you bring that concept into the world of digital? Is it compatible?

As regards our digital strategy, we’re following a ‘flagship’ strategy. Our e-commerce sites are first and foremost flagships. A flagship has to sell. Basically it has to be beautiful and offer services that are capable of creating customer loyalty. It may seem as if we’re trying to square the circle here but we strive for profitable business and at the same time to provide the best possible customer experience. On the Internet, the combination is more difficult to achieve, that’s true. So our sites provide a huge amount of information on our products, and on the men and women in our creative teams. In terms of customer experience, we have, for example, set up a regular system of live chats with our make-up artists, who answer customers’ questions.

Are you considering establishing some sort of synergy between your in-store marketing and your online sites?

To be perfectly frank, our business is not based on logistics. That would be rather difficult for a company like ours. Of course we’re doing some testing, but for the moment it’s still about obtaining quick wins. But I would like to point out that if a certain product is missing from a collection at one of our stores, the make-up assistants there give the customer a small card with the product references. The customer can then go on to the website and use the card to order the product and receive delivery free of charge. On the other hand, we’re doing an enormous amount on Facebook to direct traffic to our points of sale, especially in the low season or to advertise an event.

Co-creation is another activity that you’ve been exploring on Facebook – your ‘Palettes for Women’ campaign for example.

Social networks help brands to climb down a bit from their traditional pedestals. We wanted to try and break out of the top-down communication syndrome and from time to time use the famous creative power of the crowd. Last year we ran a new Estée Lauder brand campaign, where we asked the community to vote for a new make-up palette from four creations. The campaign was a great success. A lot of people voted, fans invited their friends to vote for the palette they liked best, and so on. It generated a lot of buzz, with very little organisational expense. And from the moment the palette went on sale, it flew off the shelves. Stocks ran out within a few hours on our e-commerce site, whereas it usually takes much longer before a new product really takes off.

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