Estee Lauder 2014 Annual Report Download - page 10

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8
We continue to innovate closest to our most discerning consumers by developing
locally relevant products and services and utilizing insights and research and
development technology from our research centers around the world.
Skin care innovation is key to our current and future success. In fiscal 2014, we
continued investing in research and development and technology in this category,
inspired by locally relevant and emerging consumer insights. Brands such as
Estée Lauder and Clinique enhanced their existing skin care franchises with
advanced reformulations. We also reached new consumers by developing and
launching products in areas where we previously did not have a presence, for
example, La Mer’s The Treatment Lotion entering the watery lotion subcategory.
Makeup presents one of our largest opportunities, and we continue to lead in this
exciting category. Our highly creative M·A·C brand was a standout performer, and
we continued to satisfy the increasing global demand for the brand by opening in
new international markets, reflecting consumers’ appetites for cutting-edge products
and trends. Bobbi Brown and Smashbox also had strong performances in makeup
this year as both brands expanded globally and launched exciting new products.
We continued to strengthen our fragrance business and achieved strong results from
our luxury brands, Jo Malone London and Tom Ford Beauty, from Estée Lauder’s
Modern Muse, and key designer fragrance launches from Tory Burch and Michael Kors.
In hair care, we expanded our presence internationally and experienced solid growth
led by our Aveda brand, with strength in both salons and freestanding stores.
Targeting opportunities in high-growth channels further accelerated our global
presence. Online continues to drive double-digit sales growth in both established
and emerging markets as more consumers adopt this channel. Our success in
innovative digital marketing and social media campaigns has contributed greatly
to increased consumer engagement with our brands and drove sales across
e-commerce and m-commerce brand and retailer sites. Our launch of nearly 50
new m-commerce sites enhanced our reach in emerging markets where mobile
is the dominant platform for online shopping.
Travel Retail continues to be one of our highest growth channels. Within Travel
Retail, we are the global leader in skin care and makeup — the fastest-growing
beauty categories in the channel — and expect continued growth as we open in
new airports, expand our brand portfolio in existing airports and convert more
travelers into buyers. We continue to invest in established and emerging travel
corridors to capture the increasingly wide range of global travelers and develop
the best presentation of our brands tailored toward these busy consumers. Our
strength in this channel helps to increase brand awareness and engagement globally.
As we expand our global presence to new channels, we know that reinforcing the
in-store experience with our brands remains important to our business. Expanded
storytelling capabilities in specialty multi-brand retailers and department stores, and
brand-enhancing strategies within freestanding stores, helped us build consumer