Online Exclusives

Ahead of Her Time

By James Zilenziger, Assistant Editor | November 30, -0001

Estée Lauder built her empire retailer by retailer.

Born Josephine Esther Mentzer, Estée Lauder’s success as a businesswoman during the mid 20th Century is a testament to the power of perseverance. What began as a small company with four skin care products is today a major enterprise with 26 brands sold in more than 150 countries. However, as a daughter of two immigrants, Estée Lauder came from simple beginnings. She lived above her father’s hardware store with her mother in Queens, N.Y. and first took interest in beauty products when her uncle came to live with her family in her high school years. Her uncle, a chemist, created velvety skin creams in the kitchen and then in a laboratory in a stable out back, and Estée originally involved herself by selling the skin care and make up to beauty salons. While women sat in beauty salons under hair dryers Estée would demonstrate the products. Soon she expanded her marketing skills to beauty shops, beach clubs and resorts.
 
In her early 20s she met Joseph Lauder, a businessman in the garment industry, and in 1930 they married. By 1946 Estée and her husband established The Estée Lauder Company and in 1948 Estée persuaded the bosses of New York City department stores to give her counter space at Saks Fifth Avenue.
 
Yet Estée understood that in order to expand her product she would need to go beyond the counter of Saks Fifth Avenue, and so she launched the Company’s personal High-Touch service. Through the High-Touch service she sought to explain the products to individual women and initiate the Gift with Purchase promotion by giving samples of different products with a purchase. As she traveled across the country to meet buyers she encouraged women who liked her products to tell their friends. One of her most famous promotional mottos became “Telephone, Telegraph, Tell-a-Woman,” and by 1953 she introduced Youth Dew, a bath oil that became a major success and reached sales of 5,000 units a week.
 
Estée Lauder died in 2004, but her company continues to enjoy tremendous success.
 
It Runs in the Family
 
 
Leonard A. Lauder, son of Joseph and Estée, joined the company in 1958 after graduating from the University of Pennsylvania Wharton School. At the time the business earned $800,000 annually but through Lauder’s implementation of new innovative sales and marketing programs sales climbed to $14 million in the early 1960s.
In particular, major changes occurred first in 1960 when Estée Lauder expanded internationally by opening an Estée Lauder account at Harrods in London, and the following year it opened an office in Hong Kong.
 
Product development also took off in the 1960s and 1970s. Estée Lauder joined Rubenstein, Arden, Revlon and Cosmetiques in a race to develop skin care creams like those found in Europe. Estée Lauder introduced Re-Nutriv composed of a blend of 25 ingredients.
 
Other lines introduced include Aramis, a male fragrance blended from citrus, herbs and spice to evoke a woodsy scent, and Clinique, a skin care product. Clinique’s national exposure came via an interview between Vogue veteran Carol Phillips and dermatologist Norman Orentreich entitled “Can Great Skin Be Created?” A huge response followed the publishing of the article and soon Phillips accepted an offer from Leonard Lauder to develop the Clinique line. Sales climbed to $40 million by the end of the 1960s.
 
Leonard was named president of Estée Lauder Inc. in 1972, and in response to competition from Revlon, Estée Lauder launched both Soft Youth Dew and a spicier oriental version called Cinnabar in the fall of 1978. Around the same time the skin care line Prescriptives entered the market and was promoted as even more high-tech than Clinique.
 
 
Taking the Lead
 
By 1983 Estée Lauder had reached a billion dollars in sales and earned the spot as the premier cosmetics company, and today it continues to lead in the cosmetics, skin toiletries and fragrances industries. According to Greg Polcer, Executive Vice President, much of the continuing opportunities for growth come from a refurbishing of the way current supply chains are managed. With a greater increase in attention to issues like environmental care and human rights, Estée Lauder continues to demonstrate to customers that the championing of good practices will lead to even better products.
 
A glimpse at Estée Lauder’s future goals includes a reduction of greenhouse gas (GHG) emissions per unit of revenue by 20% by 2015 (using fiscal year 2008 as a baseline), and already as of fiscal year 2011 Estée Lauder reduced GHG emission by 16%. Such reduction comes as a result of improving energy efficiency and by installing more renewable energy like the extra photovoltaic generating capacity at the Estée Lauder site in Melville, NY.
 
Other improvements to Estée Lauder Company incorporate the recent commitment to the Sustainable Packaging Cosmetic Roundtable that aims to share the best environmentally sustainable practices in the industry. In 2012 alone Estée Lauder recycled approximately 77% of waste from manufacturing and distribution operations, and through the EPA’s WasteWise Program, Estée Lauder is working toward its goal of zero waste by 2020 at manufacturing and distribution sites.
 
Through working with suppliers, packaging materials, where feasible, come from post-consumer resin (PCR) plastics, glass, metal and paper. All wood fiber in packaging is either from recycled pulp or from sustainably managed forests. In addition, sixteen of Estée Lauder’s suppliers use renewable energy when manufacturing packaging components for products.
 
Estée Lauder’s reputation for excellence extends beyond environmental stewardship and includes high recognition for health and safety, employment and philanthropy. In the field of health and safety, Estée Lauder has received the British Safety Council Award for the 25th consecutive year for achieving a lower-than-average accident and incident rates in their industry. The Minnesota Star Certification places AVEDA’s safety program in the top 34 in the state, and the National Safety Council Awards gave two AVEDA facilities and two Estée Lauder Company facilities awards from the National Safety Council for low rates of injury and illnesses involving days away from work.
 
In China, Mexico, Israel and South Africa the Estée Lauder Company received recognition as one of the best places to work with an emphasis on the emotional engagement of employees in four areas. In addition, the Award of Courage from The American Foundation for AIDS Research (AMFAR) was presented to Estée Lauder for achievements in the fight against HIV/AIDS.
 
New Products
 
Today, under the leadership of current Executive Chairman William P. Lauder and President and CEO Fabrizio Fabrini, annual sales approach $10
billion. With over 20 brands, Estée Lauder boasts a host of new products in the past year. Some of the newest products in the skin care field include Turnaround Overnight Radiance moisturizer, Moisture Surge Intense and Repair Uplifting Firming Cream and Revitalizing Supreme Global Anti-Aging Cream.
 
In the makeup industry Estée Lauder has recently released Repairwear Laser Focus All-Smooth Makeup, Lid Smoothie Antioxidant 8-Hour Eye Color, Pure Color Cheek Rush blush and MAC RiRi Summer. New fragrances include Estée Lauder Sensuous Nude and DKNY Golden Delicious.
 
Estée Lauder also continues to make deeper inroads abroad in countries like China by adding an entirely new brand. At the end of 2012 Estée Lauder introduced a hybrid East-meets-West beauty line called Osiao (pronounced O-Shao). This new skin care brand contains Chinese plants like ginseng and other traditional Chinese medicines and thus gives consumers a sense of being local. The brand was developed after researchers spent several years extensively studying different types of Asian skin. As the company’s fastest growing regions, the Asia-Pacific region reported sales of more than $2 billion. China alone represents the Estée Lauder’s third largest market and accounts for about $500 million in annual sales. Skin treatments are currently the most important category to Asian consumers and hopes are that Osiao becomes a significant brand that spreads throughout Asia over time. 
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