Estee Lauder 2016 Fiscal Report - Fashionista

How Estée Lauder Is Getting Millennials to Buy Its Skin Care

Instant gratification and #influencers are key.
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A cosmetics counter. Photo: fotofrog/Getty Images

A cosmetics counter. Photo: fotofrog/Getty Images

The one word you're pretty much guaranteed to hear from any CEO discussing a consumer-facing company's future goals right now? Say it with me: "Millennials." Beauty companies in particular have been focused on growing their younger consumer bases as of late, perhaps none as strategically as Estée Lauder.

On Friday, the company released an earnings report for the year ending June 30, in which it saw sales increase 4 percent to $11.26 billion and profits increase 2 percent to $1.11 billion. While sales of skin care and fragrance remained fairly stagnant-to-disappointing, profits were bolstered by sales from color cosmetics brands like Estée Lauder, Smashbox, MAC and Clinique while sales of prestige fragrance and skin care remained fairly stagnant-to-disappointing — the latter being the only category to see sales declines. 

In order to drive skin-care sales in the coming year, especially among millennials, the company's president and chief executive officer Fabrizio Freda reiterated Estée Lauder's continued focus on harnessing selfie culture in an earnings call on Friday. Social media has fueled the company's success with makeup (Freda cited foundation and lip colors as the two best-performing product categories for 2016). And he's banking on it having the same impact on instant-gratification skin care, such as face masks and moisturizers that immediately brighten and smooth the complexion.

These kinds of products have started to resonate with shoppers. Freda pointed to Estée Lauder's new selfie-bait PowerFoil Mask as one relative success in the skin-care category over the past year. Clinique and The Estée Edit also both launched millennial-targeted, instant-gratification skin-care offerings in recent months; Clinique's Pep-Start Eye Cream, which immediately blurs imperfections, and The Estée Edit's Radiance Activator Treat + Prep + Glow, which brightens skin as it hydrates. 

Another ongoing strategy for the company is forging partnerships with all kinds of digital influencers. Most recently, Estée Lauder tapped Victoria Beckham for a limited-edition makeup line coming this fall; Freda cited her social media promotion of the collection as a win, given Beckham's 12 million Instagram followers. But the company will also utilize influencers on a smaller, more local scale. The Estée Edit has already participated in activations with lower-level influencers whose followers rank in the tens of thousands but who have intensely engaged followings.

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