BEAUTY’S BIG DAY OUT
JO HORGAN WAS ONLY IN HER 20S WHEN SHE FOUNDED MECCA, WHICH BROUGHT COSMETICS BRANDS TOGETHER AND TURNED THE MYSTIFYING PROCESS OF BUYING MAKE-UP INTO A FUN AND ENLIGHTENING EXPERIENCE. UNSURPRISINGLY, THE BRAND’S FIRST FESTIVAL ATTRACTED YOUNG PILGRIMS BY THE THOUSAND.
When entrepreneur Jo Horgan announces she has had an epiphany about the future of retail, you stop and listen. The founder of cosmetics empire Mecca – which is slated to open its 100th store this year and has recorded phenomenal growth despite a tough retail landscape – says this realisation followed her decision to stage the beauty equivalent of a music festival. Called Meccaland, it was held over three days at a warehouse in suburban Melbourne in April and cost $50 to attend.
It was a significant risk for Horgan and her team not only putting on a massive public event, which they had no experience in doing, but also expecting customers to essentially pay to shop. It was a nervous morning when the 6000 tickets went on sale to the general public – but they need not have worried. “They went on sale at 9am,” she says; “they were gone by 9.45am.” Moreover, during the 15-minute lag as the last sales went through customers’ online baskets, there were another 80,000 people trying to buy tickets. “Eighty thousand tickets to a beauty festival in Melbourne in Flemington over three days. It totally blew our minds.”
Meccaland brought together key beauty brands from Horgan’s Mecca Maxima and Mecca Cosmetica stores around Australia, top make-up artists from around the world and beauty video bloggers – it even created limited-edition products. Hundreds of Mecca employees were flown in from around the country to staff the festival (they had to apply for the roles, such was the interest in being involved in the event). There were Q&A sessions, make-up tutorials and what Horgan describes as “really Instagrammable moments” for the very much on-target younger crowd (think life-size glitter-covered unicorn and all-pink ball-pit).
“It was basically riffing off the idea of a music festival where you get like-minded people together with one common interest and you provide different experiences,” Horgan says of Meccaland. “It was getting key brand partners together and giving them an incredible platform to tell their story and give a sense of who they are and why they are and what they are celebrating.” The Mecca team transformed the suburban warehouse into a multi-coloured beauty wonderland that was captured by all those attending and shared thousands of times on social media with the #meccaland hashtag.
“There were so many joyful moments,” she tells WISH. “One was seeing customers speechless as they came in. By about the third session [the tickets were sold in three-hour blocks], as people walked in after they had been queuing outside, all the Mecca team members started clapping everyone into the space so the guests
felt like rock stars from the beginning. I even had people I know tell me their kids thought it was The Best Day Ever. It was just crazy.”
This is when Horgan realised Meccaland was the future. In a retail environment constantly under attack from online stores as well as global giants like LVMHbacked Sephora, a beauty festival was the experience that customers wanted. “There was an absolute pennydrop moment for me,” she says. “Here was the future of retail as entertainment – it is not in a store and we are not providing transactional sales experiences. But this is what the customer wants in this day and age.”
And Horgan, 49, should know what the customer wants. She opened her first Mecca Cosmetics store in Melbourne while she was still in her 20s, led by her instinct that the beauty consumer wanted something more. Born in London, Horgan spent the first 14 years of her life in Wimbledon before her parents decided to pack the family up and go travelling. They settled in Perth and she did an arts degree at the University of Western Australia before heading to Boston to do a masters in communications. She had plans to become a journalist in London, until she was introduced to a different type of communication: direct to consumer.
“I stumbled into a marketing course and was absolutely fascinated with mass communications and marketing and how you connect with broad swathes of people,” she says. “But I felt there was a different way to communicate with women about beauty. I was fascinated with the field but I felt there was another way.” What irked Horgan the most was the way the cosmetics industry talked down to customers. In advertising that meant a photograph of a woman, a product and some scientific-ish claims. That was backed up in department stores by a sales representative telling you about that product and that brand, but nothing else.
“I felt it needed to be more of a dialogue rather than a didactic monologue of talking at a customer – not even talking to a customer, just stating in a very static way: this is the beauty industry, this is what we are saying and this is what you need to do,” Horgan says. “I felt that power needed to go back into the hands of the consumers. It needed to be playful and fun and experimental and I didn’t think it could be playful, experimental and empowering if you didn’t have access to lots of different brands [in one location].”
Horgan joined cosmetics giant L’Oréal as a brand manager in London; she was thrown in the deep end with high expectations, which she says helped kindle her entrepreneurial spirit. She moved back to Australia with L’Oréal a few years later, this time settling in Melbourne. She immediately noticed the disconnect between the “vibrant, confident, progressive and articulate community” she was living in and what was going on in the cosmetics retail sector. She decided she had to act. “It was one of those needs-must moments,” she says. “How do I create something that I would like, my mother would like and everyone else around me would like? That is how it started.”
Just as Horgan was contemplating doing something different, there was, as she describes it, the “biggest shift in the cosmetics landscape” in decades. The industry had been dominated by a few big corporations, but small independent make-up brands were emerging as they could access quality manufacturing for the first time (that had previously been done only in-house by the major players). “There was more opportunity to take your idea and have it created,” she says. “And so you had all these make-up artists who had a credible outlet for their creativity and they were able to offer product and communicate in a completely different way to consumers. This was snapped up by multi-brand concepts like Fred Segal in Santa Monica and Barneys’ Apothecary in New York. When I walked in, I could just see there was a beginning of a movement. My luck was that the cosmetics industry in Australia was a greenfield opportunity.”
Horgan spent the next six months flying to the US, Japan, the UK and France to convince these new niche independent brands to let them sell her product in
“Here was the future of retail as entertainment – this is what the customer wants in this day and age.”
Australia. It was a tough gig. “You look back on it now and you start laughing about the ludicrousness of it all,” she says of her determination at the ripe old age of 27. “First of all I had to get in to see them. I just rang and rang and rang because this was the days before email. Two brands later told me they only agreed to see me because they felt sorry for me and the other one said I was chewing through their answering machine at a rate of knots so it was just easier to see me.”
Many of the emerging cosmetic companies were still tiny and did not have the resources to launch in Australia (some had only a handful of stores and most were not even in Europe or Asia). This made Horgan change her original business model from focusing on “customer-centric end-point” to one where she would do everything for the brands; be the sales representative, brand manager and distributor. One by one they signed up and the Mecca Cosmetica model was born; staff would work across all international luxury/niche brands in one “high touch” boutique where customers could experiment with the products and expert staff would provide makeovers and tutorials.
Horgan opened her first store on Toorak Road in South Yarra on December 16, 1997. She was just 29 and had sold a tiny house she had bought after graduating from UWA to fund it. Mecca celebrated its 20th anniversary last year and is on track to open its 100th store in Australia and New Zealand by the end of this year. The beauty empire now has Mecca Cosmetica stores as well as Mecca Maxima stores (aimed at a more mainstream market) and stores within Myer. The customer loyalty program – called Mecca Beauty Loop – is hugely popular among consumers and Mecca has gone into cosmetics manufacture itself, producing a number of different beauty and skincare lines.
Horgan will not comment on how much the company makes each year (as it is privately held by her and her husband and co-CEO, Peter Wetenhall) but does say Mecca has recorded a 45 per cent average growth each year for the past five years. Mecca’s latest annual report lodged with ASIC shows the company’s revenue was $287 million in 2016, up from $189m in 2015. Meanwhile market research group IBISWorld puts Mecca as the second biggest speciality beauty player in Australia’s highly fragmented $4.2 billion cosmetics and skincare industry (which doesn’t take into account department stores or supermarkets), with 2.5 per cent market share. It is only behind Priceline, which holds the top spot at 7.5 per cent.
“I absolutely did not think I would be here,” Horgan says of Mecca’s success. “I didn’t think 20 years down the track at the start. I had a five-year business plan and I thought if I got to that, I would be very happy and celebrating just being in business for five years. People said you would be lucky to do one store in Melbourne and one store in Sydney, there is just not the demand for this sort of product in Australia. But I think people were underestimating the value of the experience. The product is integral to Mecca’s offer but I think the customer experience when they go in and the sense of control they get and the ability to become an expert immediately is pretty important.”
So what happens post-Meccaland? What does Horgan do with her epiphany about the future of retail as entertainment? First, she says, it is about giving the Meccaland experience to all customers. The limitededition products will be available in all the Maxima stores as well as some of the forms of entertainment (like a disco night in each state to celebrate the success of the beauty festival). “One of the things we will also be doing is actually allocating 30 per cent of our space now to experiences as opposed to retail,” she says. “We think that is the right move.”
She also has a rather unusual reminder to keep pushing Meccaland – and Mecca – forward, and it looks at her every day. “There was a literally life-size glittery unicorn at Meccaland and I said can we please have that for [head office],” she says. “Because life is not complete without one.”
“I rang and rang. Two brands later told me they only agreed to see me because they felt sorry for me.”