Behind all the glamour of Estée Lauder’s powerful brands — Tory Burch, MAC Cosmetics and others — is the spirit of a beautiful, strong-headed woman, who handled a $5-billion empire as confidently as she took care of her perfect skin.
The making of Estée Lauder
Estee Lauder was born Josephine Esther Mentzer to parents of Jewish-Hungarian descent. Like most girls of her time, she had more than a passing interest in beauty and make-up since a young age. However, that is where the similarity ended. Her affinity for marketing complemented her interest in cosmetics, which she had picked up thanks to the entrepreneurial household she grew up in.
Born to middle-class parents, Lauder started working at her father’s hardware store at a young age. And it was here she learnt the art of promoting a product by working on its outward appearance — her father used to gift-wrap nails and hammers for customers on Christmas to increase sales.
However, when her uncle moved in to set up a laboratory inside an empty stable, Lauder fell in love with his concoctions and creams, because they appealed to her deepest desire of wanting to look eternally beautiful; she adored his recipes to create cosmetics and would readily volunteer to be his dummy for new face products. Her tenure at his chemist shop taught her not only to concoct new lotions, but also how to properly apply them on someone’s face. This learning held her in good stead when demonstrating samples she herself had made to potential customers in the years to come.
The ultimate marketer
Once at a salon, a hairdresser complimented Lauder on her perfect skin and asked her the secret behind it. The next day, Lauder promptly demonstrated the four products made by her uncle that she used. Impressed by her skill and knowledge, the salon allowed Lauder to sell her products to their customers.
Though Lauder was raking in good money, it was nowhere near established competitors, such as Dior, D&G and Chanel, in terms of market share and volume. Understanding the need to target a bigger audience, she forayed into the supermarket space — her first deal was with Saks Fifth Avenue for $800. Once the deal was secured, Lauder and her husband took it upon themselves to manufacture the bottles at night and sell their ‘jars of hope’ during the day. Their hard work paid off handsomely — the consignments were sold out within two days of their launch, paving the way for many more orders from hundreds of other supermarket chains.
Another pioneering concept she introduced was a ‘gift on purchase’ to entice customers to buy more. Now an industry standard, the ‘gift on purchase’ tactic also allowed Lauder to test new products and judge women’s reaction to them before launching the same in the market.
Despite a great product, Lauder never shied away from marketing her wares to the fullest. When she was refused a chance to sell her ‘Youth Dew’ at an upscale salon, Lauder “accidentally” spilled the bath oil on the salon floor. As soon as the fragrance wafted around, eager customers jumped over each other to grab a bottle. With sass and class, she always closed a deal, however hostile the prevalent circumstances seemed. Decades before social media became mainstream, Lauder ran word-of-mouth marketing campaigns. Her oft-repeated mantra was “Telephone, Telegraph, Tell a Woman.” She relied on the high quality of her products to dazzle her audience to spur sales on.
Breakthrough success and joining the elites
Lauder steadily shored up her product line and earned a long list of customers in the process. Her breakthrough success came in 1953 with the launch of Youth Dew, a revolutionary bath oil that doubled up as a perfume. At that time, American women applied perfumes by the drop, partly because of their exorbitant prices and partly as a luxury gift reserved for anniversaries and weddings. Lauder completely turned it around with Youth Dew — women could now apply fragrance by the bottle without worrying about their husband’s finances. Its scent was touted as the “closest to heaven” and established a legion of followers of the Estée brand for Lauder.
Sensing the need to expand her market, she diversified into men’s perfumes, too, by acquiring Aramis and selling the fragrance under the Estée umbrella. Her aggressive acquisitions continued — by 1980, the Estée Lauder group owned 20 brands, including market heavyweights MAC Cosmetics, Clinique and Tory Burch.
Lauder strongly believed the instinct to look beautiful as a natural desire of any woman, and capitalised on it to sell more and make millions of women around the world look good in the process. Not only the masses, she also made acquaintances with the royalty, heads of states, as well as Hollywood. She counted Nancy Reagan, Prince and Princess of Wales, and the Prince of Monaco among her close friends.
And finally, a doting mother
Lauder shattered the glass ceiling by becoming the first self-made female billionaire. She was also the only woman honoured in TIME magazine’s 1998 list of the “20 most influential business geniuses of the 20th century” and conferred the French Legion of Honor. But most importantly, Lauder was a proud mum of five and, subsequently, grandmum of nine. She gave adequate time to her family as well as integrated them into the family business.
The Estée Lauder family still owns 87% of the company, and the day-to-day operations are run by her heirs. A role model for billions of working mums, Lauder always kept the flag flying high, whether it was in business or at home.
Anant Gupta is a Business Intelligence Analyst at KPMG.
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