Industry Insights

On-Line is Hot Hot Hot!!!

On December 11, 2015, William Lauder, Executive Chairman of Estée Lauder, spoke on CNBC (view here). It was an interesting interview. He’s very in touch with Consumer Products and Retail … and the economy and consumer!


He mentioned a number of interesting points…I’ll bullet a few points at the end of this blog…. BUT he made one point that was interesting AND very much in line with what we’re all hearing this holiday season (for example, see my blog on CyberMonday). “On-Line is Hot Hot Hot!”

Mr. Lauder mentioned that in 1995, Department Stores made up 95% – 100% of their sales. Today he said the internet counts for 10% – 12% of sales, and their own retail stores are “substantial.” He said that the future of retail is NOT Big Box Stores stuffed with Merchandise…but rather more of a “showrooming system” where consumers can check out merchandise and order on a tablet like device, and have it dropped of at home at some convenient time. While he did admit that there was a weather effect of poor holiday sales, he also felt that the strength of internet was driving a rebalancing of Holiday Sales. [In a funny exchange, he credited Al Gore to creating the internet, to which Joe Kernen (the host of Squawk Box) said Al didn’t invent the internet…but he did invent climate change. Maybe you had to be there, but I thought it was really funny…].

Other interesting points that William Lauder made:

  • Only 30% of their sales are in North America. Holiday sales here are weak, but other regions are good.
  • UK sales are good. European (excluding Paris) sales are good.
  • China’s sales have slowed from strong double-digit growth to strong single-digit growth, but it’s still robust!
  • People remember QUALITY longer than they remember PRICE.
  • On-Line channel has had 10-12 years of strong double-digit growth.

Always interesting to hear the thoughts of a leader in business! What are your thoughts on the economy and business? Where are you shopping this holiday season???



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