The boss of Estée Lauder WILLIAM LAUDER ex­plains how his com­pany main­tains cos­met­ics sales in an ever-changing mar­ket

#Legend - - Renown / Game Changer -

THE EX­EC­U­TIVE CHAIR­MAN of Estée Lauder Com­pa­nies Inc is William Lauder, grand­son of the late Estée Lauder, the founder of its brand. Lauder is also co-chair­man of the Breast Can­cer Re­search Foun­da­tion and a guest lec­turer at the Whar­ton School of the Univer­sity of Penn­syl­va­nia. Here, he tells #leg­end about how the world of cos­met­ics is changing.

How is Estée Lauder ad­dress­ing the needs of male con­sumers?

The men's busi­ness in our in­dus­try has been an emerg­ing op­por­tu­nity for 60 years. Men are dif­fer­ent shop­pers now, and we have to find a dif­fer­ent ap­proach. We are more con­fi­dent and ex­pert in un­der­stand­ing how women shop, where they shop, why they shop, what they like to shop for. Men's shop­ping pat­terns are very dif­fer­ent. One of the things we do know is that men are great fol­low­ers. The best way to get a man to like your prod­uct is to get that prod­uct into the hands of his sig­nif­i­cant other in some way, shape or form.

Male cos­met­ics aware­ness is higher in Asia than Amer­ica or Europe, would you say?

There's a some­what dif­fer­ent dy­namic in Asia. A larger pop­u­la­tion of ur­ban men are far more con­scious of their style and how they care for them­selves than their con­tem­po­raries in the An­glo-Euro­pean world. So we take a dif­fer­ent ap­proach. We've seen, for ex­am­ple, that hair is a far greater ob­ses­sion in Asia than Europe or Amer­ica, for men in par­tic­u­lar. So we pay at­ten­tion to that and we've got brands that ad­dress that, such as M·A·C. Clin­ique Skin Sup­plies for men and Lab Se­ries are also two lead­ing men's treat­ment brands.

Korean skin­care is Hong Kong’s cur­rent ob­ses­sion. How closely do you watch South Korea?

If you go back about 30 years, Ja­panese brands were very much in fash­ion. Look at the arc of de­vel­op­ment in the re­gion and you had Western brands en­ter Ja­pan, and the

Western brands did well, be­cause the Ja­panese con­sumer didn't con­ceive of the do­mes­tic brands as be­ing as good. Then the do­mes­tic brands started to im­prove. Now, in Korea, the same thing ap­plies. The lo­cal brands are ris­ing to the com­pe­ti­tion and the con­sumers rise with them. You see the same kind of mar­ket de­vel­op­ment in China, ex­cept that it's a much faster cy­cle.

How much is tech­nol­ogy the agony or ec­stasy of to­day’s mar­ket?

We break tech­nol­ogy down into two dif­fer­ent words. You have tech­nol­ogy around form and feel – in other words, serum, lo­tion, creams – and the Asian con­sumer in gen­eral is very con­cerned about the feel of the prod­uct. That hap­pens with en­vi­ron­ment and weather. Hong Kong in June and July is sticky, so a heavy cream that works in North Amer­ica will not work here. At the same time, Bei­jing in win­ter is cold and dry­ing. We look at tech­nol­ogy not only from the stand­point of the en­vi­ron­ment but also the form and feel to the con­sumer. We are con­stantly look­ing for what's new, what's bet­ter and how we de­liver to that con­sumer. If you're not try­ing things, you're not re­ally suc­ceed­ing. Seventy per cent of ev­ery­thing we sell was launched more than three years ago, even though, for most of us on the brand side, 80 per cent of our brain­power is spent on what we're launch­ing be­tween now and the next 24 months. While we're look­ing for­ward, the con­sumer in­side the store, seven out of 10 times, is buy­ing what she knows. But she won't come un­less we stim­u­late her in­ter­est with some­thing that's new.

What is Estée Lauder’s most iconic prod­uct?

In this re­gion, Es­tee Lauder's Ad­vanced Night Re­pair cream: a sin­gu­lar prod­uct and the big­gest sin­gle prod­uct fran­chise in the world.

Ex­plain the M·A·C phe­nom­e­non and how it be­came such an in­flu­en­tial prod­uct.

M·A·C was one of the first make-up artistry brands that the con­sumer had ac­cess to. The founders did things 30 years ago that now we take for granted. Back then, they were eye­open­ing and quite con­tro­ver­sial. M·A·C had a store in Green­wich Vil­lage, New York, on Christo­pher Street. And there was al­ways a line out­side and the door­per­son to keep con­trol of con­sumers was a cross-dresser called Lady Miss Bunny, who was a six-foot-one man, dressed like a woman, with a big wig and ev­ery­thing else. It was out­ra­geous, but that out­ra­geous­ness caused a lot of at­ten­tion. They re­ally were the first to try a sort of dif­fer­ent, non-tra­di­tional ap­proach. The brand didn't ad­ver­tise in the sense of for­mal ad­ver­tis­ing but had a very strong po­si­tion around the M·A·C AIDS Fund, which sold to con­sumers and gave 100 per cent of prof­its to the fund. If you go back to the 1990s, that was clever. It was about the con­sumer and make-up artists and their uni­verses. The first spokesper­son the brand hired for ad­ver­tis­ing was RuPaul. You know, here's a six-foot-four African-Amer­i­can man dressed as a woman with no holds barred, a per­son­al­ity off the charts. And if you just stop and con­sider it now, that

was, sort of, the M·A·C thing. Hong Kong was the first Asian mar­ket in which we launched M·A·C – in 1995 in Times Square. The brand took off be­cause of its unique ap­proach and it main­tained that status, which is hard for a brand that is so ubiq­ui­tous. When we first ac­quired it, every­body asked what we were do­ing. What's re­ally nice is we've hit US$440 mil­lion raised for the M·A·C AIDS Fund. It's one of the largest, if not the largest, AIDS fund, in terms of giv­ing money away.

Can­cer is a big con­cern in the phil­an­thropic world of Estée Lauder.

Yes, there's the BCAF, the Breast Can­cer Aware­ness Fund. It was founded by my mother, and we've been do­ing it for 25 years. It's some­thing we do first and fore­most be­cause 95 per cent of our con­sumers are women. Sta­tis­tics re­veal that one in eight women will be di­ag­nosed with breast can­cer dur­ing their life­time. That's mil­lions of women and the dis­ease touches mil­lions more. Seventy-five per cent will live. Twenty-five years ago, if you were di­ag­nosed, you had a 75 per cent chance of sur­vival. Now, that num­ber is over 93 per cent.

What do stu­dents ask about when you lecture them?

The same is­sues as younger con­sumers are look­ing at: sus­tain­abil­ity, an­i­mal test­ing, the ef­fi­ca­cious­ness of prod­ucts. In many cases, con­sumers are ask­ing that we be as en­vi­ron­men­tally friendly as pos­si­ble, or as good ci­ti­zens as we pos­si­bly can be. But the con­sumer in gen­eral is not nec­es­sar­ily will­ing to com­pro­mise on qual­ity. At the end of the day, the con­sumer comes back to a prod­uct that works.

What has hap­pened to lead­er­ship in a world where Mil­len­ni­als and Gen­er­a­tion Z have a more in­de­pen­dent or less hi­er­ar­chi­cal view of work­ing for their em­ploy­ers?

A fas­ci­nat­ing ques­tion. To­day's Mil­len­nial em­ployee is a very dif­fer­ent per­son, with dif­fer­ent needs and de­sires. If you look at the younger Mil­len­ni­als, they have dif­fer­ent stan­dards from their late co­horts in their late 20s, who now have kids, and may stay home, and may have a mort­gage and some status and in­come. Psy­chol­ogy and phi­los­o­phy have changed. For ex­am­ple, take breast can­cer. Many Mil­len­nial con­sumers don't want to just work for a com­pany. They want to work for a com­pany that's also a good cit­i­zen. They want to be proud of the com­pany they work for, not just be­cause of its busi­ness suc­cess. A lot of our time and ef­fort is de­voted to find­ing ways to un­der­stand that psy­chol­ogy. So we do lots of things that res­onate with that pop­u­la­tion. It's called Look Good Feel Bet­ter, cre­ated by the Amer­i­can Can­cer So­ci­ety. The psy­cho­log­i­cal frame of mind is very im­por­tant. We are over­sub­scribed for vol­un­teers, five to one. That tells you a great deal about what's mo­ti­vat­ing them. And they use tech­nol­ogy in the so­cial me­dia space. They are not shy about shar­ing dis­sat­is­fac­tion with their lead­ers. An­other dif­fer­ence: no-one blinks when a stu­dent says, “I'm go­ing to start my own com­pany”. These days that stu­dent may be one of 10 in a class of 50, as op­posed to pre­vi­ous times. The level of ed­u­ca­tion has risen, com­pe­ti­tion for spots is grow­ing and these stu­dents are be­com­ing more and more aware of that. They try to build up their CVs. There is com­pet­i­tive mo­ti­va­tion. But what makes a per­son a great boss hasn't re­ally changed: how to mo­ti­vate, how to coach and train. The era of the heroic chief ex­ec­u­tive who pulls the en­tire or­gan­i­sa­tion is not as im­por­tant as the chief ex­ec­u­tive who is the spir­i­tual leader of the or­gan­i­sa­tion.

What trends can we ex­pect in the next 10 years in the cos­met­ics busi­ness?

In 10 years' time, what we know to­day will be mean­ing­fully dif­fer­ent. That's both in the form of prod­ucts, tech­no­log­i­cal evo­lu­tion, forms of re­tail. Think of the in­flu­ence of e-com­merce al­ready and buy­ing from your smart­phone. The Ama­zons, Alibabas, TMalls, WeChats be­come more ubiq­ui­tous and de­liv­ery of your prod­uct be­comes more rou­tine ev­ery day. The stores will be­come more like show­rooms, and they'll say, “All right, this is your size. I have it in these two colours now but I've got six other colours in the ware­house and I'll have it de­liv­ered to you later to­day.” So think of the re­tailer as the oc­to­pus which has lots of arms go­ing in many dif­fer­ent di­rec­tions. In­stead of them hold­ing all that in­ven­tory in each arm, they're hold­ing it more cen­trally. There will con­tinue to be an evo­lu­tion of that in­stant sat­is­fac­tion: buy now, get later to­day. And the con­sumer will think that's a nat­u­ral part of their shop­ping ex­pe­ri­ence. The con­sumer has changed faster than the re­tailer imag­ined. Cer­tain re­tail­ers have be­come a lit­tle too com­fort­able in their uni­verse and be­come too com­pla­cent.

The re­tail­ers strug­gling now are the ones who thought the con­sumer was theirs for keeps.

“There will be an evo­lu­tion of that in­stant grat­i­fi­ca­tion: buy now, get later to­day. The con­sumer will think that’s a nat­u­ral part of their shop­ping ex­pe­ri­ence” WILLIAM LAUDER

Left: Estée Lauder’s best-sell­ing Ad­vanced Night Re­pair cream Right: William Lauder, ex­ec­u­tive chair­man of Estée Lauder

Left: a M·A·C cam­paign Be­low: Ad­vanced Night Re­pair cream

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