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In order for companies to lead tomorrow, their executives have to embrace aspiration and go where customers are leading them, John Demsey emphasized.
“Our future relies on building on the pioneering aspects of what was done yesterday, the realities of today and the aspirational hopes of tomorrow,” said Demsey, group president of the Estée Lauder Cos. Inc., speaking at the WWD CEO Summit here. “Aspiration is the thing that keeps us going and opens up even greater potential for the future.”
To do that successfully, it’s necessary to be aware of how fragmented and fast-changing the worldwide market is and to “read between the Tweets” to find the opportunities, he said.
And aspiration is all about building dreams, said Demsey. “Jean-Paul [Agon, L’Oréal chairman and chief executive officer] last night referred to the fact that he believed, as I do, that the beauty industry is fundamentally different than many consumer product industries in that we actually fulfill women’s aspirations,” said Demsey. “We are in the business of creating products, creating concepts, creating experiences that make people feel better and make them experience intangible feelings of happiness and acceptance.”
However, unlike past decades, the industry can’t expect to dictate those dreams to consumers, he said. “Instead we must discern and define them on a regionally local, relevant basis,” Demsey said.
To keep ahead of the trends, Demsey suggests immersion in local markets whenever possible. In his global travels, he always procures “a stack of high-end international fashion magazines, a stack of local fashion magazines, a stack of paparazzi rag sheets and I turn on the equivalent of MTV. And I sit for a couple of hours and just try to absorb what’s going on and then I go off to my market visit. It’s important to put yourself in the context of where you are because those are the people who buy our products.”
Growth lies within the aspirations of emerging populations and communities around the world, as in Russia, China, Brazil and India, he said. As well, he said, “we’re using a powerful combination of our brand’s inherent DNA and our inherent ability to tell great stories and to harness the aspirations of today’s consumers to drive our success, whether it be online, through television advertising, print advertising or great editorial or in-store experience.”
Demsey used MAC Cosmetics as an example. “When I first started at MAC in 1998, the company didn’t have the cash flow to run any advertising, but what they did have [was] the insight to hire makeup professionals and to establish a powerful core DNA of community and a community of artists around the world,” said Demsey. “That DNA, with its roots in makeup artistry, theater and fashion, embracing its impassioned diversity of all ages, all races, all sexes and its sense of community gave MAC’s popular culture authenticity.”
The brand was also quick to embrace social media. “MAC was able to take a look at subgroups in small communities, embrace them and understand the power of small groups working together to become a bigger voice,” he said. “As a result, today MAC has more than 3.2 million Facebook fans, over 100,000 Twitter followers and the YouTube channel passed five million viewers in March….This is a brand that evolved over the course of 14 years from $100 million wholesale business to what industry sources claim is almost $2 billion today.”
These days, he said, marketers face challenges from a whole new range of distribution channels, from specialty stores to Sephora, e-commerce, QVC and curated sales sites. “Content lives absolutely everywhere, from bloggers to YouTube to comments on a Facebook page. New platforms like Pinterest and SparkRebel give everyone the power to have style authority….And it has become such a mash-up, it’s even more challenging than ever for global marketers,” said Demsey.
The key to fueling momentum for tomorrow is combining the tapped-in storytelling with established marketing principles and a sound business model and business strategy, he said. “We have seen no singular road map to success,” said Demsey. “Our challenge is to keep [the beauty aspiration] interesting along the way, keep it relevant, to keep delivering experiences and to make people feel special and to tap into their deepest desires. And if we want to do that, we just can’t look at the beauty business. We can’t stand apart or above or outside. We need to be plugged in, in real life, with real people and popular culture, which holds the key to my belief that modern-day aspiration is the driver of our future growth.”