Estee Lauder Consumer Behavior Project

Google Confidential and Proprietary 11

Estée LauderConsumer InsightsAlejandra RamirezEmily TheilKim Van Der WallVictoria LaraLance Dunbar

May 5, 2014

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Agenda

Company Background

Company Background HypothesisHypothesis Methodolog

y

Methodology

Moving Forward

Moving Forward

Insight Express Survey Results

Insight Express Survey Results

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In 1946 Joseph Lauder and his wife Josephine Esther Mentzer (Estée Lauder) began producing cosmetics in NYC.

The company has expanded to 20+ global prestige beauty and personal care brands with Estée Lauder as the flagship brand.

The Estée Lauder Story

Google Confidential and Proprietary 44Source: Estée Lauder Companies Q2 FY 2014 Earnings Call

According to Estée Lauder Companies’ Q2 FY14 Earnings Call, Esteé Lauder has an ongoing effort to be more modern and aspirational. To support this they have new products, Pure Envy Sculpting Lipstick and Nail Lacquers, that should generate excitement.

Modern & Aspirational Brand

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If Estée Lauder emphasized it’s long-lasting benefits to Millennial women it would

gain relevance in the category and overcome it’s expensive price perception, helping the brand achieve

long-term growth.

Hypothesis

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Research Methodology

Qualitative Research

Survey Quantitative Research

Desk Research

Social Media

Listening

Focus Group

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InsightExpress Methodology

Sample Size Description:

Females between the ages of 18 and 35

Wear makeup

May or may not be Estée Lauder brand users

Live in urban areas in the U.S.

Have internet access

Sample Size: 200

Launch Date: April 15, 2014

Completion Date: April 17, 2014

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InsightExpress Results

72%used Mascara in the last 30 days

43%purchase

Estée Laudercosmetics

61%wear makeupevery day

69%purchase cosmetics

at wholesaleretailers

60%agree they

would consider purchasingEstée Lauder

in the near future

…and there’s so much more

Source: InsightExpress, Estée Lauder, April 17, 2014

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Millennial Makeup Users

She…

buys eye makeup products,

purchases CoverGirl & Maybelline,

shops at wholesale retailers,

prefers shopping in-store,

and her favorite celebrities are Jennifer Lawrence & Mila Kunis.

Source: InsightExpress, Estée Lauder, April 17, 2014

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Where They Shop for Cosmetics

68% prefer to shop in-store

69% typically buy at wholesale retailers (i.e., Wal-Mart & Target)

Discounts & promotions are the number one influencer that determines where they buy cosmetics

Product variety is ranked second when determining where they buy cosmetics

Source: InsightExpress, Estée Lauder, April 17, 2014

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Spending Behavior for Cosmetics

Affordability is the most important factor when buying for Seniors to Seniors*

Affordability & Long-Lasting are the most important factors for Working Millennials**

78% approximately spent up to $50 they last time the purchased makeup

Source: InsightExpress, Estée Lauder, April 17, 2014

* Females aged 18-24** Females aged 25-34

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Makeup Usage

72% use Mascara

Category usage for the last 30 days:

1. Eye (Mascara, Eyeliner, Eye Shadow)

2. Lip (Lip Stick, Lip Gloss, Lip Liner)

3. Face (Foundation, Powder, Concealer, Blush)

Source: InsightExpress, Estée Lauder, April 17, 2014

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Competitive Perception

Source: InsightExpress, Estée Lauder, April 17, 2014

Has a wide product variety

65% 70% 57%

Offers the colors I like 59% 67% 53%Focuses on skin care 58% 50% 52%Is within my price range 44% 50% 42%Would consider purchasing in the near future

60% 64% 53%

Fits with my lifestyle 50% 55% 44%Likes how it makes me feel

47% 52% 47%

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Perception of Estée Lauder

Seniors to

Seniors

Working Millennials

40%Already buy Estée Lauder

products46%

47%Feel the brand fits with their

lifestyle 52%

44%Like how the brand makes them

feel49%

60%Would consider purchasing

the brand in the future60%

24% Make $40k+ annually 55%

Source: InsightExpress, Estée Lauder, April 17, 2014

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If Estée Lauder emphasized it’s long-

lasting benefits to Millennial women it would

gain relevance in the category and overcome

it’s expensive price perception, helping the brand achieve long-term

growth.

Revisiting the Hypothesis

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Moving Forward

Consider…

taking advantage of existing positive perceptions

(skin care and product variety)

aligning the long-lasting benefit to higher price

points

nurturing Senior to Seniors to develop a long-term

relationship

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Q&A