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The Challenges of Courting Millennials, According to Estée Lauder's CEO

With a new makeup collection launching at Sephora this March, the brand is dead focused on bringing in younger customers.
Kendall Jenner at a Modern Muse event. Photo: Desiree Navarro/Getty Images

Kendall Jenner at a Modern Muse event. Photo: Desiree Navarro/Getty Images

In March, Estée Lauder will launch a collection of products, largely makeup, in 320 North American Sephora stores as well as on the beauty retailer's website. Called the Estée Edit, it's the latest and biggest step in the 70-year-old brand's push to court millennial customers, a project that kicked off in conspicuous fashion with Kendall Jenner signing on as its spokesmodel in the fall of 2014. Naturally, the Estée Edit won't be without Jenner's influence: She's one of its guest editors. 

Following the announcement of Estée Lauder's second quarter financial results, a period during which the company's overall sales grew 8 percent to $3.12 billion, CEO Fabrizio Freda hopped on the phone with me to discuss the brand's efforts to recruit younger shoppers, now that they're well underway. At this point, he says, the biggest hurdle to clear on that front is effectively engaging millennials, since they don't respond to traditional advertising in the way their parents do. Even harder than getting their attention — through social media or leveraging the talents of an opinion leader like Jenner — is retaining it.

"Millennials tend to be more volatile and less loyal to products they discover," he says. One way to keep their interest is by simply releasing more stuff, especially makeup. (The category, which performs well with a younger audience, grew 13 percent in sales during the quarter.) Freda says that six years ago, only 12 percent of all Estée Lauder products sold were new releases; today, that's more like 20 percent. All for the sake of the flighty millennial. For the Estée Edit, 20-somethings weren't only motivating the creative process — they were also the ones working through it. The brand brought together an internal team of millennials to spearhead the project and sought input from social media experts, bloggers and influencers.

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When Freda is talking about millennial challenges, he's referring primarily to regions where Estée Lauder has a long history, including the U.S., the UK and Australia. In Asia and countries like Russia, Turkey and Mexico, by contrast, Estée Lauder is a millennial brand, which is partly why the team is focused on launching the Estée Edit in North America. It could expand well beyond that, but its future depends on what customers think of the collection.

"The thing with millennials is that you don't launch and leave," Freda says. "You launch and learn."