The Challenge
Despite strong brand equity and a diverse portfolio (MAC, Clinique, La Mer, and more), Estée Lauder struggled with:
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Slowed Growth in Asia: The Chinese market recovery has been slower than anticipated.
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Generational Disconnect: Gen Z and younger Millennials gravitate toward indie and purpose-driven brands.
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Overdependence on Travel Retail: Heavy reliance on duty-free sales left the company vulnerable to global travel disruptions.
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Digital Competition: Emerging beauty brands excelled in direct-to-consumer strategies, influencer partnerships, and authentic storytelling.
Strategic Recommendations
(DG Marketing & Consulting Perspective)
To regain momentum, heritage brands like Estée Lauder must adapt strategies that align with today’s consumer values:
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Purpose-Driven Storytelling
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Elevate authentic founder and brand stories across their portfolio.
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Differentiate sub-brands with distinct value propositions rather than blending into a broad “luxury” umbrella.
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Gen Z-Focused Engagement
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Invest in micro-influencers, TikTok-native content, and culturally relevant brand collaborations.
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Develop community-led campaigns where consumers are participants, not just viewers.
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Diversified Channel Strategy
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Reduce dependency on travel retail by expanding direct-to-consumer platforms.
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Build integrated omnichannel experiences that merge in-store discovery with digital storytelling.
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Innovation in Self-Care
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Expand into wellness-focused beauty and hybrid skincare-makeup innovations.
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Highlight inclusivity and cultural diversity in product development.
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Data-Driven Retention
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Strengthen CRM and loyalty programs, drawing inspiration from leaders like Sephora’s Beauty Insider.
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Prioritize personalization and community over blanket promotions.
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Overview
Estée Lauder Companies, one of the world’s leading prestige beauty houses, faced significant headwinds in 2024–2025. After two consecutive years of declining sales, including a 2% decrease in net sales in the most recent fiscal quarter, the company announced 7,000 job cuts in February 2025. These moves highlighted the pressure legacy beauty brands face as global retail shifts and consumer expectations evolve.
Potential Impact
By executing these strategies, Estée Lauder could:
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Rebuild cultural relevance with younger demographics.
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Diversify revenue streams for greater resilience.
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Reposition itself not only as a heritage luxury brand but also as a forward-thinking, inclusive beauty leader.
Key Takeaway
Estée Lauder’s recent decline underscores a critical truth: even legacy brands must evolve to remain relevant. By leveraging purpose-driven storytelling, digital innovation, and consumer-first strategies, heritage companies can reinvent themselves and thrive in a competitive, fast-changing beauty landscape.