Estee Lauder 2015 Annual Report Download - page 16

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13
We recognize that many consumers from emerging markets are introduced to our brands while
traveling or abroad. Travel Retail continues to be an important cornerstone of our strategy to reach
these consumers, particularly as destinations and traffic patterns shift. This year, we accelerated our
growth in certain limited-distribution brands in Travel Retail and will continue to add distribution
points and invest in this channel to help fuel our future growth.
CREATING THE NEXT GENERATION
OF ICONIC BRANDS
We have a successful history of collaborating with talented, inspirational founders of prestige beauty
lines to build their brands into game-changing global enterprises. By preserving what is special and
unique about these brands, while leveraging our global distribution, creative resources and
operational expertise, we are able to help these entrepreneurs realize their vision and create new
avenues of growth for our Company.
Our track record is spectacular: M·A·C, Bobbi Brown, La Mer and Jo Malone London—all significant
value-creating acquisitions from the 1990s—are helping to power our momentum today. For
example, since we acquired Bobbi Brown in 1995 and completed our acquisition of M·A·C in 1998,
sales of each brand has risen at a compound annual rate of nearly 25 percent.
We are extremely excited about the potential of the new brands we welcomed into our portfolio in
fiscal 2015. Each one strengthens our presence in subcategories poised for strong growth with
established brand equity and loyal consumers. GLAMGLOW increases our skin care offerings,
particularly in masks that help give skin a gorgeous, spotlight-ready glow, while Editions de Parfum
Frédéric Malle brings us a collection of elegant, sophisticated ultraluxury fragrances with European
provenance. Le Labo adds artisanal fragrance and lifestyle offerings with an emphasis on fine
craftsmanship and personalization, and RODIN olio lusso provides our Company with another
authentic offering in the fast-growing luxury facial oil subcategory.
These new additions are important investments in our future and serve to enhance our already
diverse portfolio of powerful brands.
ADAPTING THE WAY
WE COMMUNICATE AND ENGAGE
Consumer behaviors and shopping preferences have reached a fascinating tipping point, and we are
well-equipped to respond and deliver in this dynamic landscape. One of the largest and most
significant forces transforming our industry is the rise of the Millennial consumer. Born between 1980
and 2000, Millennials are now the largest demographic group not only in the history of the United
States, but in the world. Their spending power in the United States alone is expected to reach nearly
$3.4 trillion by 2018.
These savvy consumers are widely considered to be the first “digital natives,” and expect a seamless
shopping experience across the brick and mortar, online and mobile worlds. For them, lines between
information, communication, entertainment, commerce and socializing do not exist. They instantly
share their perspectives and seek advice not only from friends, but from an ever changing and
THE EST{E LAUDER COMPANIES INC.