Without magic: Estee Lauder's success story
'30.01.2019'
Source: U-jew
Assessing the success of large corporations, we usually look not only at financial and statistical indicators. A truly tremendous success is global popularity, a significant contribution to the development of the industry and, of course, a definite revolution that a company produces in the lives of millions of people. This is the company that Este Lauder has created - an incredible woman who turned the world of cosmetics, making it exactly as we know it today.
Este, whose real name is Josephine Esther, was born in a poor neighborhood of New York City 1 on July 1908, into a large family of Jewish immigrants, says U-jew. The girl was Rosa Mentzer’s ninth child, born already in her second marriage. Her father was Max Mentzer, a native of the Slovak town Holice. Little is known about the childhood of the future cosmetics queen; for a long time she hid her biography, right up to the date of birth. But in 1985, the book “Estee Lauder: Without Magic” was published, revealing to the public many secrets of a successful business woman. This book describes the childhood of young Este, her admiration for her mother, as well as those dreams that persistently led her to the realization and realization of her destiny.
The journey from a big dream to a grandiose global business began from the moment when, after World War II, her uncle John Shots came to the house of the Lauder family. The man was a dermatologist and had a passion for creating a variety of creams for the face and body. This occupation instantly captured 6-year-old Este. And her uncle, with the enthusiasm of a real teacher, revealed to the girl the secrets of cooking the creams he developed.
Up to this crucial moment, the girl realized her aesthetics by decorating the windows of her father’s shop. There she gained a taste for trade, and also made her first business discovery: success in sales is possible only with confidence in the quality of the goods sold. This rule has become fundamental in building its business.
Growing up, she entered Newtown High School and graduated with honors. And her uncle is still conjuring over his recipes and new formulas right in the kitchen. She spent hours watching his work, helped him in many ways, took over the experience and soon prepared her first cream herself. This new product was the first product of the Estee Lauder brand that did not exist yet - the girl began to actively distribute her work among her friends and classmates. She painstakingly worked on new ingredients to create the perfect cream, gaining not only experience, but also confidence that her desire to give every girl the opportunity to be beautiful and the introduction of organically safe products in self-care is her life purpose.
A serious push forward to her dream, Este received unexpectedly. The girl came to do her hair at one of the salons in New York, where the owner of the salon noticed her beautiful, radiant skin. In response to the compliments, Lauder, with her passion inherent in her, told about the cream developed by her, thanks to which she manages to maintain this condition of her skin. The owner became interested in the product, and a month later in this salon a presentation of wonder products for all the clients took place, after which Este presented the cream samples to everyone present. The product was so much liked by the clients of the salon that in less than a month the Estee Lauder cream was already sold in most of the salons in New York.
To maintain interest in their product and also expand the circle of customers, Lauder organized free demonstrations of her cosmetics. She went to beauty salons and offered clients to try their creams right in the hairdressing chair. It was she who came up with the testers familiar to everyone - it was no longer necessary to blindly choose a cream, playing the lottery “would fit / not fit”.
All these commercial moves were incredibly successful, as many women needed changes in the cosmetics industry. And Estee Lauder was the first to take these needs into account.
Sales were growing, and the artisanal lab, organized in the kitchen of an entrepreneur, could no longer cope with the increasing demand. Therefore, already married Este, bought a small empty room, reconstructed it, bringing it to a suitable condition, and transferred all production facilities there. In the hall of the room, it was decided to arrange a store, where all manufactured products will be displayed. The laboratory worked without days off, and Este and her husband worked even at night. Buyers devastated the shelves at an incredible speed, lining up even in a queue, waiting for a new batch of this or that cream. It all said that it was time to officially launch our own company on the market, not at home or amateur level, but as a full-fledged player in the field of cosmetics.
At 1946, the Lauder couple founded Estée Lauder Cosmetics Inc. Since they were independently engaged in all areas of the "life" of the company, they had to share responsibilities. Naturally, Este took over the marketing, and Joseph took up finance.
The well-organized work of the enterprise went uphill, sales were growing, but the range of products was small. The line of facial skin care consisted of only four products: a cream for problem skin, a cleansing oil, a rich multi-purpose cream and a nourishing lotion. Also Estée Lauder Cosmetics Inc. offered a narrow range of decorative cosmetics - face powder, turquoise eyeshadow and bright red lipstick. The girl understood that it was necessary to expand the range, but this was not the initial task of the young businesswoman. In order to loudly enter the cosmetics market, first it was necessary to give their product wide popularity not only in New York.
Therefore, first of all, the packaging for cosmetics was developed and thought out to the smallest detail - the choice fell on turquoise color and restrained design. And Este was right in this, the jars of her design harmoniously fit into the interior of even the most luxurious bathrooms.
The next step was the distribution of products through the networks of large shopping centers, and the first such giant was the Sachs store on 5 Avenue. Having carefully studied the behavior of customers at the entrance to the store, Este chose a place to the left of the entrance for her cosmetics, but the main PR move was the declared gift when buying any product. Nobody has done this yet. And it had the effect of a bombshell. The queue for Este products was in the morning, she was dismantled instantly, and also ordered in advance. The turnover was serious, and the popularity grew to unprecedented size. As a result, after a few weeks, Estee Lauder cream and cosmetics appeared in all major stores throughout New York. By 50, Estee Lauder Cosmetics was opened in other US cities - the Marshall Field, I.Magnin, Neiman Marcus and Bonvit Teller stores.
The time has come to expand her product line and Este started with bath oil - the most essential care element for girls of all ages. This novelty, called Youth-Dew, went on sale in mid-1953. The new product was positioned as something irreplaceable in the bathroom of every girl, which means that everyone had to afford to buy it. Hence the incredibly democratic price of oil - only $ 8,5 per bottle. Advertising for the product was even more provocative than the price - the image of a naked woman praised feminism and attracted everyone's attention. Success came immediately.
During the first week after the start of sales, more than five thousand bottles were sold, the oil became a bestseller. This meant a huge income - it brought the hostess $ 30 million a year.
Of course, no success is complete without a calculated business plan. At the head of the company's business strategy were built novelty and exclusivity. Even then, guided by attracting new customers, the official slogan of the company was approved. At the opening of the next store on the eve of the new 1954 of the year, the assembled audience first heard the expression “start the new year with a new face”. It was a direct hit.
America was finally conquered, and Lauder aimed at the cosmetic market in Europe. To conquer the restrained and cold to all American Europeans could only be a strong social position. At that time feminism, the movement of "green" and high fashion were gaining momentum.
In 1956, Este Lauder decided to launch a luxury face cream for $ 115, the sale of which in the first year brought the company more than a million dollars. In support of the movement against the environmental crisis, the company creates the Clinic collection - the first full-fledged and fairly wide line of cosmetics focused on reducing skin allergic reactions. The commercial success was overwhelming. For ten years, revenue grew 45% annually, turning the midsize company into a real empire and making Este Lauder the richest self-made woman in the world.
All this time, an incredible entrepreneur in every way promoted the already popular product. Spectacular advertising, parties in honor of another novelty, private elite events and general open master classes with gifts and free samples of cosmetics - all this raised the name of Estee Lauder to the top of success not only in the USA and Europe, but worldwide. Her cosmetics appeared in stores in Hong Kong, Canada, Australia, Russia, and sales increased to $ 14 million.
In 1992, the direction of beauty and personal care, which has always been the main one for the company, was added by no less important - the preservation of health. Thanks to daughter Este, a foundation was established for the early detection of breast cancer. This prompted the idea that early diagnosis could save lives, and it was decided to make the pink ribbon known to everyone as a symbol of the fight against breast cancer. In 90, it was sold at every Estée Lauder Cosmetics store.
By the end of 2003, the amount raised was no less than $ 10 million, and to date, the fund has raised almost $ 65 million.
But not only charity was a new and promising line of business for the company. Absorption is a really big step in development. In 1995, Estee Lauder acquired a controlling stake in one of the main makeup brands - Make-up Art Cosmetics (MAC), after which, just three years later, the entire company came under its full control. The next absorbed company was the line of professional cosmetics Bobbi Brown, then a fairly stable, but little-known brand “Aveda”. All these acquisitions only increased the well-being of Estée Lauder Cosmetics. Financial indicators were already at the level of the leading global brands and were approaching $ 3,5 billion. Such large-scale growth and successful business solutions helped the corporation to take the first place in the US beauty industry. The statistics in 2000 were incredible: Estée Lauder Cosmetics owned at least half of the prestigious cosmetics market worldwide, 55% of the makeup and skin care market, and the figure in the perfume niche was slightly less than 30%. Today, Estee Lauder's name is no longer a firm or a company, but a global corporation, which includes 29 brands sold in more than 150 countries.
In 2004, Estee Lauder died, but the business continued to thrive thanks to the skillful management of her son and daughter-in-law. The corporation remained a family one, for which Este fought so hard. Sales in 2016 amounted to $ 11,26 billion, while the company's profit now reaches $ 7 billion.
She showed by example that a woman should not choose between a career and a family, these two seemingly incompatible areas Lauder easily combined, only strengthening her position in the world market.
The heritage of Este is not only a grandiose corporation that breaks records in financial performance. She introduced into the world, albeit a small, but a revolution. She turned women's attitudes towards self-care, changed the world of marketing and showed by example that in this world nothing is impossible.
“Everyone can and should tune in to success. This is the most effective way to achieve your goal. I myself clearly imagined my success - and turned it into reality ”- Este Lauder.
