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Charles B. Strauss, 61, is just months away from ending his 37-year career in the mass consumer products industry. As president of Unilever Home and Personal Care North America, he most recently has been overseeing an $11 billion enterprise that has taught him his final lessons in the industry, which include how much further major corporations need to grow in order to reach today’s complicated and overinformed consumer.
Strauss’ career began in a much simpler time. After earning a BA at Dartmouth College and an MBA from Columbia Business School, where he majored in marketing, Strauss joined Procter & Gamble in 1967, where he acquired marketing and brand management skills. He later moved on to other companies, including International Playtex, the Marketing Corporation of America and Gagliardi Brothers, an affiliate of H.J. Heinz.
His 18-year career at Unilever began after he joined Ragu Foods as president and chief executive officer, which Unilever acquired in 1986. Subsequently, he served as chairman and ceo of Langnese-Iglo GmbH in Germany from 1989 to 1992, and was then appointed president and ceo of Lever Brothers Co., New York.
In what is likely his last interview as an executive, Strauss shares his views on what will keep the beauty industry dynamic in the years to come, as well as what will separate the innovators from the dinosaurs.
WWD: What is the biggest change in consumer shopping habits/wants/needs since you entered the beauty industry? What do you attribute this to?
CS: Consumers are shopping differently. They are moving away from some of the more traditional ways of buying fashions and beauty products, away from department stores, and we have seen that over the past five years. There has been significant growth of the mass marketing operation, with Wal-Mart, Target and Costco as examples, and also an increase in online shopping, which grows every year. I think consumers are getting information from many more sources, and as a result, are much more demanding. I believe they are far more sophisticated than they have ever been. They have more choices and, as a result, I think they make them more intelligently. I think consumers are more discriminating and more self-confident. They have more individual tastes, which you see with their different fashion choices and different looks: Today they know they can use many different products; today you see them changing hairstyles and hair color.
They have more individuality, and I think that means marketers of brands in health and beauty aids need to be much more quick to respond to trends.
WWD: Dove has emerged as one of Unilever’s — and the industry’s — most celebrated brands, as it has successfully penetrated different categories, becoming a megabrand. What makes a brand ripe for expansion? Why do you think consumers have embraced Dove?
CS: I have been involved with Dove for most of my career, even in other countries, and I have watched as it has moved across borders and product categories. Dove is quite an old brand to have continued being successful in the beauty business. It was launched almost 50 years ago in the U.S. as a cleansing bar, and like many successful brands it started with a successful formulation: It does not contain soap; it cleanses in an unusually mild way.
It was successful from the beginning. But the curious thing is that it continued growing every year over the last 50 years and I’m not talking about all the other products, I mean the basic Dove bar has continued to grow. Fifteen years ago, Unilever lost its patent protection and since then we have had a number of companies use the technological formulation that Dove has but that has not stopped it from growing. Often a brand will start with success, but then it gets to what that brand is all about, and what keeps it going is something else. I think it’s a special relationship with the consumer. We worked very hard to do that.
Loyal users still use Dove because they trust it. Dove is all about trust and doing what it says it does in a very simple, straightforward way. It always had technical superiority that was supported by medical data but we never marketed any of those claims. It was all about real women, no actresses, telling other women about their real experiences with Dove in their own way. That communication continued over the years and across borders and has built an enormously successful franchise and loyal base of users. Whether we are talking about Dove cleansing in the U.S. or Dove hair care in Japan or Dove deodorant in Brazil we do it in the same way, with real women in their own words. It gets to what I call what a brand is all about.
To date Dove is a $2.5 billion global retail brand sold in about 80 countries and it has been growing at double-digit rates for well over a decade. Can you do that with any brand? No, but it’s not about being a bar soap or a deodorant or hair care product. It’s about being a product that delivers what it says in an honest, easy and relevant way. That’s what Nike does. That’s what Tide does. I wish we had more of them.
WWD: How important do you think the male consumer is to the beauty industry in the next five years?
CS: The male consumer today, as in the past, is not as important to the mass or prestige beauty industry as women. That’s just a fact. Just look at the numbers. Even though women are half the population they are far more important in spending money in the health and beauty aids category. But having said that, there is significant growth in the underdeveloped male usage of health and beauty aids. No doubt about it, it’s important to recognize that men are different than women and need to be treated so. I think it’s challenging to have brands that are going to try to appeal to men having been built on a female franchise. But it’s not impossible.
Calvin Klein’s Eternity was built initially appealing to women as a fragrance, but the message, which is about eternal love and loyalty between a man and a woman, is appealing to both so we were able to build a very successful franchise for both. If you want to build a strong franchise among men you need a brand that delivers a message and a product and an experience that is meant for them.
For example, we considered using an existing deodorant or fragrance brand to appeal to young men who were our target for a new deodorant we wanted to launch but we found that they wanted their own brand speaking their language. I got a lot of advice about how it was impossible to launch a new brand in the U.S., and to use Degree or Suave to appeal to this target.
The cost of launching a mass personal care item here is between $50 million and $100 million, and that’s just the first year, and you really need to commit to a new brand for three years. But we made the decision to bring Axe deodorant here and it now exceeds $150 million at retail in the U.S. Axe is about a $350 million brand worldwide.
WWD: Skin care is beauty’s hottest category. How well poised is the mass beauty industry to compete with prestige players? What do you think mass is lacking?
CS: The mass beauty industry is doing very well, in fact, more skin care products are sold in mass than in prestige. In North America, skin care sales have been growing over 10 percent for the last decade. And all the major players have been very active in this area, Unilever, L’Oréal, Johnson & Johnson, P&G. They are fighting it out.
Mass doesn’t need to take cues from prestige trends anymore. That was more true five to 10 years ago than it is today. In 1989 Unilever concluded that to be successful in skin care we needed to be in prestige and it’s one of the reasons we bought Calvin Klein fragrances and Elizabeth Arden. With Calvin Klein fragrances we certainly had success; Elizabeth Arden was not a successful acquisition.
You don’t need to be in prestige skin care to be a healthy, viable growing mass skin care business. From a technology standpoint, our skin care scientists and labs are second to none. We have learned how to creatively innovate skin care. We have brands that can carry us into any segment that maybe in the past we didn’t think could, like Dove and Ponds. You can move mass brands up into segments that certainly are just as good if not better than the high price point products sold in traditional prestige outlets. I know that because we did the clinical testing and we have learned to match technology with the characteristics consumers want.
WWD: In terms of marketing, how important are nontraditional venues, such as the Internet, to driving sales? Will anything ever replace TV/print ads?
CS: I think nontraditional venues are vitally important and I think the brand marketer who thinks they can continue relying primarily on marketing programs using the typical mass media broadcast TV and national print campaigns will be the dinosaurs of the future. Consumers have so many different ways of getting information; we need to be creative and bold in reaching them. I am concerned for Unilever and other marketing companies. They need to be a lot more creatively ambitious.