Increased Coverage in Specialty-Multi
Channels representing nearly one-third of our sales are growing double-digits, including specialty-multi, online, and Travel Retail. Specialty-multi has been an effective channel for attracting new consumers globally, especially Millennials. During fiscal 2017, Jo Malone London created a retail format and business model to enter the specialty-multi channel through Sephora, where it has been very well received. In Latin America, multiple brands also launched in Sephora, including Tom Ford and La Mer, while brands such as Clinique, M·A·C, and Smashbox continue to have strong sales in-store and online. M·A·C launched in Ulta Beauty in the fourth quarter, where it is being introduced to new consumers. In Asia, as more high-growth, brand-building specialty-multi retailers emerge, our brands are capturing this opportunity. For example, Clinique was our first brand in Eve and Boy in Thailand and in Olive Young in Korea.
Online Success
Fiscal 2017 was another excellent year for our online business, which delivered accelerated growth of 33 percent in constant currency. Over the past five years, our online sales, which include sales on our own sites and sales on our authorized retailers’ sites, have more than doubled and now account for 11 percent of our total net sales. The U.S. and the U.K. remain our two largest online markets, accounting for approximately 70 percent of our global online business. China, our third largest market, nearly doubled online sales in fiscal 2017. Bright spots included the successful introduction of M·A·C and Lab Series on China’s Tmall, and the surge in sales across our brands on Tmall on Singles Day, where we were the beauty category winner. We also made good progress online in other emerging markets. We recently launched in India and plan to roll out in the Middle East and Southeast Asia in fiscal 2018.
Our efforts in support of retailer.com sites also proved fruitful as we helped our authorized retailers win with our brands online. In fact, many of our brands, particularly Estée Lauder, Clinique, and M·A·C, had an outstanding year on Macys.com. Mobile commerce continues to drive our results, as it provides consumers with an always-connected and always-on channel. Currently, two-thirds of our online traffic and nearly half of our online sales come from mobile devices. We expect this trend to accelerate and therefore, we are expanding our mobile team and increasing investments in mobile innovation in order to provide our unique High-Touch services and experiences to consumers. As our Online team likes to say, access to a beauty expert is as easy as reaching for your phone.
We have also been strategically focused on designing a seamless omnichannel experience across our in-store and online direct-to-consumer channels, making it easier for consumers to buy what they want, when and where they want it. Omnichannel initiatives to help enhance this cross-channel consumer journey have included services like click and collect, buy online/return in-store, and order online from in-store. We also developed new loyalty programs for a number of our brands in the U.S., Canada, Korea, and the U.K. Additionally, we advanced the concept of delivering High-Touch service online. For example, we launched the ability to text gift cards in real time and have developed chat bots to drive online appointments and innovative gifting with our pop-up store in the U.K.
Growth in Travel Retail
International passenger traffic growth was solid in fiscal 2017, helping to accelerate the Travel Retail channel, where our sales grew 22 percent in constant currency. We are expanding more of our portfolio into additional airports and are finding success with digital acceleration that enables pre-order sales, as well as with new store formats such as our Lip Studio in Shanghai Pudong Airport. Our expanded offerings in luxury fragrance performed very well this year, including products from Le Labo as well as Jo Malone London, particularly its Blossom Belle collection that launched exclusively in Travel Retail. Tom Ford achieved record growth in Travel Retail, winning with traveling Chinese consumers in both makeup and fragrance. Looking forward, we expect higher passenger traffic, coupled with effective marketing, to increase conversion, leading to strong sales growth again in fiscal 2018.
The Best in Consumer Engagement
Our Company was founded by Mrs. Estée Lauder, an incredible woman who was known for making instant connections with consumers through her commitment to provide individual attention, whether personally applying a cream or a lipstick to demonstrate its benefits, offering a quick lesson in skin care or demonstrating a three-minute beauty regimen. High-Touch service is in our DNA, and we have evolved this concept through the years, giving us a competitive advantage in addressing today’s consumer wants and needs. High-Touch in the digital age includes leveraging technology and social media at all touch points in the consumer journey.
Our brands are using new social media strategies and memorable 360˚ marketing campaigns to drive awareness, trial, purchase, and loyalty, and they are using digital tools to provide real-time analytics and feedback to understand what is resonating. Partnerships with social media influencers are integral to our digital marketing efforts across brands – these efforts have led to increased share in earned media value (EMV). In fact, we ended fiscal 2017 as the number one prestige beauty company in the U.S. in EMV according to Tribe Dynamics. Online how-to content continues to be an effective engagement technique for brands like Bobbi Brown, the top beauty brand on Facebook Live, where the brand hosts weekly demonstrations, reaching as many as 400,000 fans. Aveda has leveraged the professional authority of Aveda Artists and social-savvy influencers to create on-trend, shareable tutorial content, positioning the brand as a trusted source for "do-it-yourself" Millennial consumers. Jo Malone London introduced “The Talk of the Townhouse,” a magazine and digital editorial platform offering consumers original content designed to build brand equity, drive sales and elevate the brand’s unique boutique positioning, boosting its brand storytelling and voice along the lines of “Estée Stories” and Clinique’s “The Wink.”
Strengthening Our Capabilities
In fiscal 2016, we announced the launch of Leading Beauty Forward, a multi-year initiative to build on our strengths and better leverage our cost structure to free resources for investment to continue sustaining our strong growth momentum. This initiative is designed to fuel our long-term, profitable growth, enhance our go-to-market capabilities, and reinforce our leadership position in global prestige beauty.