Today's consumer is more attuned to value, performance and the experience of product purchases, according to Fabrizio Freda, the president and CEO of the Estée Lauder Companies. Freda addressed representatives of the beauty industry at a sold out Newsmaker Forum presented by Cosmetic Executive Women (CEW) on January 28, 2010 in New York City.
The presentation, Leading Through The Changing Face of Beauty, was introduced by Carlotta Jacobson, President, CEW, who said, “Fabrizio Freda is a key figure in the beauty industry and I am honored he will address the relevant issue of change at our Newsmaker Forum.”
Mary Murcko, Publisher, Prevention, set the stage for the presentation, noting, “Forward thinking and creativity are hallmarks of the Lauder Companies and we recognize Mr. Freda’s ability, since he joined the company, to cultivate the best opportunities and champion creativity.”
Fabrizio Freda, president and CEO of Estée Lauder.
A Man With a Plan
Jill Scalamandre, moderator, and CEW chairwoman, led the discussion, introducing Freda as an “über change agent,” and someone who loves to challenge the status quo. Freda said, “I’ve always believed in change. Change is the essence of progress. I’ve learned that changing the status quo is the most important thing a leader can do.” He continued, “When you look reality in the eyes, you see the opportunities for change, but not change for its own sake.”
“Once change is defined and you have looked reality in the eyes, you can create a new vision,” said Freda. “This recession has been very tough on all of us, but has also been an opportunity to do the change we had to do anyway, and accelerate those changes. It put a big emphasis on protecting financial solidity,” he noted.
Freda, who said he wanted to publicly thank William Lauder for being an amazing coach for him, noted that alignment was a key concept in orchestrating change.
“Every geography, brand, function, was required to write its own strategy based on the total strategy of the entire company, and understanding the key dynamics of consumers from Australia, Brazil and all different countries around the world was key to strengthening the company,” he said.
Freda, who noted that the original founder of the company, Estée Lauder, had the ability to listen to the consumer, said that the scale and dynamics of business have shifted.
“Now, with consumers in China and all around the world, the scope has changed.” Freda said, “We hope to bring the best mix of talents together and become a truly global company.”
Freda discussed the newly sensitive consumer of today, who was more attuned to value, performance and the experience of product purchase, stating, “I don’t think this is a new normal. It could be for the next year or two, but the consumer in North America has learned the lesson of value. In the future, with the way we speak to consumers and present the entire value presentation, we can see the consumer continuing to seek the customized experience. I see this as a mission to build a different value experience for the consumer with service and education.”
Freda emphasized the value of learning to apply makeup at a MAC store, and the degree of “high touch” service women receive and appreciate in the prestige cosmetic market.
In addition, digital communication will be playing a greater role, as Freda stressed the importance of the Internet in bringing the message to consumers.
“The digital world is a two-way communication. Advertising is one way to speak to consumers. Digital will make the consumer much more in control,” he said.
But changes aren't limited to the U.S. Internationally, the consumer is changing around the world, according to the speaker.
“More middle class consumers are entering the market in China and they are going directly to high end cosmetics," observed Freda. "Their ability to afford these products is growing.”
He noted that in Europe, the economic conditions are as tough as North America, with unemployment, and other similar changes. Elsewhere, Freda is more optimistic about Turkey, calling it a rational market, and he noted that Brazil was totally different from other countries, with huge consumption in the mass market.
In discussing qualities of leadership, Freda acknowledged the importance of strategic thinking, being able to connect thoughts to the future, and creativity. Regarding balancing lifestyle and career, Freda said, “What I inherited from William Lauder is an amazingly talented organization with talented women. The issue is to make the talent happy. I am committed to listening, and I am listening to women in focus groups around the world. That will be the next step.”
Freda, who added that he reads magazines and data from all different countries, presented a keen interest in keeping as close to the consumer as possible, and recognizing and utilizing the company’s talent, to ultimately make it a truly global entity.
Additional information may be found at: www.cew.org.