This story is Part 2 of a two-part series on how The Estée Lauder Companies is adjusting its internal and online businesses in the name of modernization. You can read part 1 here.
For The Estée Lauder Companies, its online division is part and parcel of its continued longevity, but it is also its hub of transformation.
Founded in 1996 by William P. Lauder, executive chairman of The Estée Lauder Companies, ELC Online is made up of 700 employees worldwide. This group not only designs, builds and oversees almost 1,700 mobile and e-commerce sites in more than 40 countries, but it has also been tasked with developing innovations for the company with products like Estée Lauder’s Online/Mobile Beauty Advisor and various voice assistant apps through Amazon’s Alexa and Google Home. ELC Online employees span roles from UX to online marketing and social media management.
ELC Online has become a crucial element of the 73-year-old company, as its online sales have risen, on average, 25 percent over the last five years. Online sales accounted for 13 percent of total sales in the company’s fiscal year 2018; additionally, there were more than 430 million brand-specific website visits, according to the fourth-quarter 2018 earnings, released in August.
Overall, ELC Online reflects a blend of different tactics at The Estée Lauder Companies (ELC), including recruiting and hiring practices, tech- and mobile-first products and evolving company culture.
“There have been a lot of new beauty entrants, and there is a disruption in retail. Our goal is to be relevant to the consumer wherever she is,” said Salima Popatia, vp of global online marketing and merchandising for The Estée Lauder Companies.
Hiring for the 21st Century
The first way for ELC Online to maintain its relevance is to hire people who are reflective of today’s customer and the way they shop. Currently, ELC Online is predominately young and female. (Sixty-five percent are millennials or Gen Z, and 80 percent are women.) Eighty-three percent of new hires came from outside of the beauty industry in 2018, according to Laura Rowan, vp of human resources for global online at The Estée Lauder Companies.
“While we have people who love our brands and love beauty, they don’t necessarily come from another beauty company, and we [like] that, because the diversity of experience is extremely valuable,” she said.
According to Rowan, recruitment for ELC Online has been evolving over the past few years to focus more on niche job sites, like Angel List, as prospective employees develop more technical skills and move away from using general job boards, such Monster.com and Indeed. Additionally, local meet-ups (small events, often centered on a planned topic of discussion) have been an emerging opportunity for ELC Online to recruit. From meet-ups, current ELC employees have met people they ultimately referred to the company, said Rowan. She explained this is happening more frequently company-wide, but declined to provide data around the number of ELC Online employees who are hired through referrals. Rowan said the ELC human resources department is actively putting together a meet-up strategy, ensuring the company is not only present where candidate pools are but also sponsoring them. This could include ELC Online hosting meet-ups at its office at 23rd Street in New York City or employees attending other meet-ups on behalf of ELC Online.
Currently, the average tenure of an ELC Online employee is five years, but globally, the tenure for employees across ELC is 7.8 years. This is above beauty industry standards for tech positions, according to Ricardo Alvar, Chief Strategic Officer from ForceBrands, a recruiter for the beauty industry. Additionally, a female workforce of 80 percent is also above what he typically sees at beauty companies.
“The benefit of the beauty industry is the associated luxury and wellness, and working with a company [that women] identify with,” he said. “[It’s] one of the most welcoming industries for women. Eighty percent is a little higher than I would expect, but I am [also] not surprised at all.”
Organizing for success
ELC Online operates on a predominantly cross-functional basis, meaning that people from ELC Online brands, marketing and digital technology and innovation groups are brought together to ideate. “The cross-functional teams are important because, as new roles get created, we decide we need a team around it,” said Popatia.
Therefore, something small like a Facebook chatbot might be a project that began by a region or brand team, but as it expands and evolves, ELC Online will form a cross-functional team dedicated to chatbots. Data and analytics have emerged as an area that ELC Online is increasingly investing and hiring for.
Other recent projects include an interactive voice experience for Aveda on Google Home, launched in January 2019. This voice assistant experience allows customers to talk to their Google Home and trigger the experience by saying, “I’d like to talk to Aveda.” Along with a look at the history of Aveda brand and a store locator function, the experience gives users access to personalized beauty tips and product recommendations, plus meditations guided by a wellness and meditation expert.
But the role of ELC Online is not to only develop technologies that drive revenue. It’s also meant to steer the way brands engage with their customers.
“We serve as a commerce platform, but there is a second purpose. Consumers are engaging with us and consuming content, video, blogs, influencer or partnership content, UGC, and review content,” said Popatia. “We are thinking about brand sites, not just as e-commerce sites, but also as media platforms.”
ELC Online has been using its Asian markets as an opportunity to glean what the future of a media-cum-brand platform looks like, paying close attention to WeChat and mobile use in Asia. Data for 2015 shows mobile e-commerce at around 51 percent of total e-commerce spending in China, compared to 33 percent in the United States, according to Consultancy Asia. The firm also projected that by 2020 around three-fourths of online shopping will be performed through mobile devices in China, compared to less than half in the U.S.
“It’s not a technology, it’s a behavior. It impacts every aspect of our life and makes the consumer 24/7, so we are seeing different changes in behavior and how we market to her,” Popatia said.
To achieve what ELC Online has, the company has developed programs in addition to traditional employee benefits that encourage collaboration. (The ELC Online office space is colloquially referred to as “Silicon Alley” by employees.) Like many other tech companies, the office boasts an open floor plan with recreational activities like foosball and abundant kitchen amenities.
There are also “lunch-and-learn” meetings and monthly townhall events that allow ELC Online employees to learn about the work their colleagues are doing, as well as learn from outside experts and entrepreneurs. The meetings are held periodically and bring together employees to hear about what other colleagues learned while attending or speaking at conferences, or what they are seeing in other markets, for example. The town hall events, which are referred to as “Café Sessions” bring in guests from other industries such as fashion, technology and healthcare. Due to confidentiality agreements, ELC could not disclose speaker names.
ELC Online also co-hosts events with external organizations, such as universities, coding academies and non-profit organizations that prioritize women in STEM, Rowan said. These are held two to five times a year.
“Developing skills in [ELC Online employees] is the most important thing we can do for retention, bar none,” she said. “The individuals here, including myself, believe we are building the future of this company and of beauty.”