Estee Lauder Outsources E-Commerce

May 20, 2002

Estee Lauder Companies Inc.’s on-line subsidiary has agreed to outsource certain aspects of e-commerce for cosmetics retailer to Global Sports Inc., reports Direct Marketing News. The decision was made to reduce costs.

Global Sports will host the technology supporting as well as handling fulfillment and customer service. and Estee Lauder brands will retain control of the sites’ design, merchandising and marketing.

In 2000, Estee Lauder bought the 3-year-old to house nine boutiques for its house brands, and others including Chanel. On April 30, the cosmetics company said it would take charges of $57 million for goodwill write-off and restructuring, including severance to 33 employees and the closure of the San Francisco office.

Moderator Comment: What are the advantages/disadvantage
of outsourcing e-commerce?

Amazon’s partnership with retailers such as Target, Borders,
Toys ‘R’ Us, etc., has enabled the parties to focus on their core competencies.
Anderson – Moderator

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