The decision to get eighteen-year-old Too Faced beauty company has not been plucked out of thin air. This is a well thought out step on the way to the heart and wallet of the young consumer. Expanding the range of fragrance, skincare and younger-facing beauty brands will capture the attention, and dollars, of millennial and Gen Z shoppers. «This is the latest step in our acquisition strategy. We’ve built a portfolio of fragrance brands, Korean skincare brands, and now <…> we’ve put our focus on the younger consumer,» – said Estée Lauder CEO and president Fabrizio Freda.

 

Why Should It Work?

Fabrizio Freda believes that Too Faced appeal to the younger generations more than other beauty brands in the company’s portfolio. First of all, unlike the professional, buttoned-up studio brands like Mac, Smashbox and Bobbi Brown — which are marked by their sleek, black-and-white, minimalist packaging — Too Faced is decidedly more fun. Favorites with customers are such products as the Better Than Sex mascara, the Let It Glow highlighter and blush, and the Chocolate Bar eye palette. The colorful products are typically encased in gold and pink packaging with the bold names. It is perfect for the «feminine, playful consumer».

Estée Lauder. Indie Beauty Brands

 

Secondly, Estée Lauder understands, that Too Faced is well promoted through social media and beauty influencers on YouTube. The beauty brand has 7.3 million followers on Instagram, when Estée Lauder’s has 1.4 million, Bobbi Brown’s – 1.8 million, and Smashbox’s – 2.3 million. If we consider that Too Faced’s core customer demographic is under 40 (80% of total number of customers), then the strategy for raising attention of millennial and Gen Z shoppers should work. «This consumer is driving rapid growth in makeup with a multichannel mindset and an influence from beauty bloggers and social media content,» – said Freda, – «they’re digitally savvy consumers with a connection to stores, online, and on their phones».

 

Background And Outlook On The Future

But do not think that Estée Lauder is only now realized that the young customer is the most attractive and it need to work on his attracting. The acquisition strategy has been working for 2 years. Basically, the company was interested in color cosmetics, skincare — specifically Korean — and fragrance. In 2014, Estée purchased Rodin, a luxury skincare brand; Le Labo, a niche perfume and candle brand; Editions de Parfums Frédéric Malle, a luxury fragrance brand; and GlamGlow, a line of “mud” face masks modeled after the Korean skincare trend. In 2015, Estée Lauder introduced BB creams to the U.S. market by making an investment in Korean skincare brand Dr. Jart+.

 

Estée Lauder. Indie Beauty Brands

From this year, in addition to Too Faced, the Estée’s portfolio will also include such brands as By Kilian, a perfume and cologne brand, and Becca Cosmetics, bringing its number of brand acquisitions to seven. According to WWD, Estée plans to accession skincare brand Drunk Elephant, although the company wouldn’t confirm.

 

Universal Trend

Beauty industry has long been tent-poled by big, traditional players. Digital index L2 made a statement that indie beauty brands are «posing a challenge to companies that have traditionally dominated the category». L2 analyst Elizabeth Rosen in a 2016 report on indie beauty explained: «While traditional brands are reticent to collaborate with e-tailers or allow reviews to be posted on their products, savvy newcomers have leveraged the rise of e-commerce and emergence of new e-tailers to gain the advantage».

The tendency to update the beauty brands arsenal is inherent to Estée Lauder. Unilever has taken on brands like Ren, Dermalogica and Kate Sommerville. L’Oréal purchased IT Cosmetics and Kiehl’s. It seems the assignment of beauty brands with younger product lines in the color cosmetics and skincare categories has become a common trend in recent years.

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