By  on June 1, 2007

Nearing its 40th birthday, Clinique is aiming to grow by returning to its youthful roots and tapping into the power of nontraditional media.

The brand was founded in 1968 as a dermatological skin care line and ranks number-one in U.S. department store sales for women's facial treatment and color cosmetics. According to The NPD Group's figures for calendar year 2006, the brand did $1.2 billion in retail sales overall in the U.S., with $452 million done in women's facial treatment and total makeup sales of $600 million.

But even the strongest of brands needs a periodic freshening-up, especially when faced with a growing crowd of upstart doctor brands — and Clinique global president Lynne Greene is determined to do that with a new youth-oriented spin on its venerable Three-Step skin care line and an accompanying Internet initiative; a new consultant education program being piloted late this summer, and a retooled counter design.

"Our mantra is cherish the past, but invent the future," said Greene. "We are inventing the future of Clinique with the same touchstones that Clinique was originally founded upon. We clarified what those touchstones were, and decided how they should be amplified for the future."

Those touchstones, said Greene, are simple: dermatological heritage; allergy-tested and 100 percent fragrance-free; youth accessibility and appeal, and the unique client experience.

It's that last point that Greene calls "the very heart of Clinique," and the leading edge of a group of initiatives. Dubbed the "Clinique Unique Client Experience," it will include extensive counter redesigns and an educational program that the firm is calling Consultant Accreditation, designed to boost the skill level of the people selling the brand in stores. Consultant Accreditation is a three-tiered program, which has been reviewed by Dr. Norman Orentreich, the founding dermatological consultant to Clinique, and his wife, Dr. Catherine Orentreich, as well as by Weill Cornell Medical College — where the brand has established the Clinique Skin Wellness Center — to improve consultants' expertise on skin physiology.

"The dermatologist, for Clinique, is what the backstage is to makeup artist brands," said Greene. "We work with these dermatologists all of the time, and we're working to magnify that proposition. We're amplifying it with the relationship of the Clinique Skin Center at Weill-Cornell Medical Center — we have research programs with them, we have the center. We're also working with them on the education program we're doing with The Clinique Unique Client Experience."The brand has also just signed a deal with the Translational Research Information Center in Kobe, Japan, for a similar program. "We're always looking for new things to say about the skin, and new ways for our clients to use existing products," said Greene. "That's why we do a lot of the medical research that we do, and why we do the dialogue with the dermatologists."

The program — particularly the associate-development prong — already has several high-profile fans, especially Bill Dillard, chairman and chief executive officer of Dillard's Inc. During a rare interview Tuesday, Dillard called the brand's new customer experience program "exactly the right thing," and said he committed to be a part of it less than 10 minutes into the brand's presentation to him.

"This program is helping people to better themselves," he said, adding that Dillard's has had a similar program in place for the past several years in other departments, including men's furnishings. "Herb Kelleher [co-founder of Southwest Airlines] once said that to take care of your customers, you have to first take care of the people who serve them. We believe that if you give people better jobs, they are less likely to feel that they need to move on. That is especially true in cosmetics. The cosmetics business is about service, and if we're going to sell cosmetics effectively, we have to have great salespeople selling them. We need to give customers a reason to buy from us and not from drugstores."

That's increasingly important in a consolidating retail market, not to mention one that is attempting to reduce its reliance on gifts-with-purchase. When asked if brands could completely exit the gwp market — long a staple for top department store names like Clinique, sister brand Estée Lauder, and the L'Oréal-owned Lancôme — Dillard replied that it wasn't likely, although reducing dependence on them certainly is. "Our industry gets hung up on g's, but they don't do anything for your long-range business," said Dillard, noting that they don't build consumer loyalty in the way that programs like Clinique's do. "But no one who's big in g's can completely get out of that business. Instead, if you can reduce the percentage from, say, 25 percent of the business to 20 percent, that's significant."Jane Lauder, senior vice president of global marketing for Clinique, agreed. "This isn't about gift-with-purchase. We're not opening with a new gift and doing [all the business] in a single weekend. We wanted to take a different approach, one that would grow our business for the long term."

Dillard's, Macy's and Bon-Ton will begin rolling out the program in August. Confirmed locations are Dallas and Cleveland with Dillard's and Chicago with Bon-Ton. Macy's will put the program in 11 stores in Long Island, New York: its units in Roosevelt Field, Smithaven, Massapequa, Manhasset, Huntington, Valley Stream, Hicksville, Commack, Bay Shore, Douglaston and Hampton Bays.

"Clinique is really going back to its roots with this program," said Rob Smith, executive vice president of merchandising for Macy's. "They're putting a lot into the experience for the consumer, and making it the best possible environment for her. We need to focus on the experience to continue to keep our customers coming back to department stores. Clinique has always been strong in education for both sales associates and customers, but this program takes it to a new level. It gives customers a reason to come back to Macy's."

The program will roll out throughout the fall. "We also have education managers going into additional cities," added Greene. But the complete counter redesigns will take time to reach all doors. "We will roll out 50 doors [of Clinique's 2,200 U.S. doors] this fall, so people can see how it is, and next calendar year, have the numbers to determine where we'll go next. We would try to do 15 cities next year, and another 15 cities the following year, and so on," Greene added.

The brand is choosing to do the rollout city by city to maximize impact, said Greene. "We're the Queen Mary, not a rowboat," Greene cracked. "It's going to take time."

But it will be time well spent, she believes. "We wanted to change the relationship between the Clinique customer and the Clinique consultant," said Greene. Rather than trying to shove products at a consumer from behind a counter, the new design features a consultation area, called the Diagnostic Center, which puts both adviser and customer on the same side of the counter. "The customer is also looking at products at eye level," Greene added. "The transaction becomes, 'let me tell you about your skin, and let me tell you the products that are right for the things you want them to do.' It's not the product of the day — it's very much about custom fit."One of the ways that Clinique differs from its competition, said Greene, is the brand's ability to draw in customers aged 18 to 24 years old — not traditionally an age group which shops in department stores. "There aren't many people who can say that they're partners with the retailers in bringing that age group in through the door," said Greene. To that end, the brand is launching Acne Solutions, a version of its Three-Step Program that is designed for customers with chronic acne. While the brand has versions of Three-Step for normal, oily and combination skin, Acne Solutions marks the first time that the brand has created a version of the program targeted at a specific skin condition.

The line, launching in July, is built on four prongs: exfoliation, antibacterial/microbial, antiinflammatory and basic oil control, said Janet Pardo, senior vice president of global product development for Clinique. "When you're treating the acne, you have to be very aware of what's going on with the rest of the face —namely, a lot of irritation and inflammation," said Pardo. "We started putting these formulations together using a combination of various types of therapies, including salicyclic acid and benzoyl peroxide. We also found that it's important to prescribe a regimen of products — no one product is going to do it all."

The first product, Cleansing Foam, has 2 percent salicyclic acid, as well as antioxidants. "It is very low in surfactants, so it's gentle on skin. The second step is our Clarifying Lotion, which also has 1.5 percent salicyclic acid and a lot of antiinflammatory ingredients. We also put some powder in the formula, which deposits the salicyclic acid onto the skin and mattifies it. The last product, Oil Free Moisturizer, has 2.5 percent benzoyl peroxide. The most important thing that we learned is that you don't have to have 10 percent benzoyl peroxide. All that does is irritate the skin. We found that this combination gives the skin the proper amount of hydration while treating the acne. Healing shouldn't have to hurt."

Cleansing Foam is priced at $17.50 for 4.2 ounces; Clarifying Lotion is $13.50 for 6.7 ounces, and Clearing Moisturizer is $16 for 1.7 ounces."It's about authority for us," said Lauder, noting that she expects Acne Solutions to strengthen the brand's influence in skin care. "Acne is never going to be the biggest business ever; certainly, we could launch an eye cream and do three times as much [in sales] but this is about authority. We want to illustrate that we are the place to come to no matter what your skin issue."

And, Greene added, Clinique will do that for entry-level prices. "Price accessibility has always been very important for that younger consumer," said Greene. "In 1968, Three-Step retailed for $21. If we had followed inflation for the last 38 years, it would now be $117. But we are that brand who is there for the department store to bring in the younger customer."

Globally, said industry sources, Acne Solutions could do as much as $30 million at retail in its first year on counter. About half of that figure is expected to be done in the U.S.

In the U.S. alone, the Three-Step skin care franchise is said to generate retail sales of more than $180 million yearly. The 39-year-old franchise grew 6 percent last year. Acne Solutions could add $30 million to that total globally, with about $15 million of that figure expected to be generated by retail sales in the U.S. "Two out of every five treatment products sold is a Clinique product," said Lauder, "and Three-Step alone would be the number-two brand in unit sales if we separated it out from the treatment business as a whole; Clinique would still be number one. But there's a lot of distance between the next brands."

While Greene concedes that Clinique isn't now — or will it likely ever be — a supertrendy brand, she argues that the brand's customers don't want it to be.

"We're not ever going to be a funky makeup artist brand," said Greene, perhaps referring to corporate sister MAC Cosmetics, whose entry-level department store price points compete with Clinique for dollars. "We are what we are. You need to be true to who you are, because if you try to put on a phony face, everyone in the world is going to know that. Our clients like to be pretty, but with a natural look. I'm not going to tell you that you're going to be funky when you walk out of here, but you're going to have a pretty, natural, soft look, and you're going to have colors which won't irritate your skin. Over half of our customers who buy color from us say that it is because it is allergy tested and fragrance-free."Another major shift for the brand is the amount of capital that it is devoting to online and nontraditional marketing and advertising. While none of the executives would discuss figures, industry sources estimated that the brand will spend about $5 million in the U.S. on advertising and promotion for Acne Solutions. Greene wouldn't discuss numbers, but did say that only about 30 percent of the advertising and promotional budget would be spent on traditional — i.e., national print — advertising.

Instead, the brand is heading heavily into the online sector to get the word out about Acne Solutions. "The majority of our efforts will be online," said Alicia Sontag, vice president of North American marketing for Clinique. The campaign will include banner advertising, an online game which involves flying dots meant to evoke acne leaving the scene quickly; working to make sure that the brand comes up quickly in acne searches, and a viral marketing campaign for which Clinique is partnering with Alloy.com, the leading online youth destination site.

"As an industry, we're now catching up to a type of marketing [i.e., Internet advertising] that other industries now see as 'traditional' advertising," said Sontag, adding that a viral marketing campaign dubbed Clinique Beauty Boot Camp is also being developed with Alloy. "Our goal is twofold. We know that when consumers learn about acne, they trust their friends. So we wanted to get these products into the hands of people who will use them, and want them to tell their friends."

The Beauty Boot Camp will involve 2.5 million e-mails to Alloy and Clinique customers, 30 million impressions through banner ads, and inviting consumers to enter the Beauty Boot Camp. "We'll select about 10,000 people to send Acne Solutions sets to," said Sontag. A channel on Alloy devoted to the line will allow users to blog and chat about Acne Solutions.

That type of interaction is critical, as Sontag observed earlier this year. "We have to follow the direction in which the consumer is evolving," she said. "For instance, our young consumers are spending 26 percent of their time online and 63 percent watching broadcast TV. What we've seen is that there is a stark contrast between campaigns with one media element versus those which are surrounded by animation: the Internet, in-store, radio, TV. If you do that, it's successful. Otherwise, it's not enough to break through the clutter."Not to mention, Lauder points out, "You're reaching far more people [via the Internet], yet for less of a cost. It's the place where we think the most growth will come from."

Still, even with something of a youth push, Greene has no intention of alienating any of Clinique's users. "Our clients fit the bell curve — we have clients who have never used anything but Clinique, and are now taking their 15-year-old daughters to the counter to introduce them to Three-Step," said Greene. "From an image point of view, Clinique's target is an 18- to 24-year-old. But what's very important to us is that we also have products for that consumer who has been loyal to us for all of those years, like Repairwear."

The national magazine ads for Acne Solutions, coming in August, will be something of a departure for the brand. Rather than the brand's artistic and iconic Irving Penn shots, Clinique is running what Greene calls "equity ads." They are heavy on type and science and small on art. "They're literally just talking to the consumer about the heritage and the touchstones of Clinique. They feature big shots of Clinique product —no faces — and conversational copy. Our client is smart. She likes to learn new things."

"We've been running black- and-white equity advertising in newspapers, but we wanted to take it to the next level," said Lauder. Allergy-tested, fragrance free — a tenet of the brand which is repeated on every product and carton created by Clinique — will also get an advertising push with an equity ad with the headline "One is a big number at Clinique." The thinking behind that, Lauder explained, is that even one customer having an allergic reaction to a Clinique product necessitates heading back to the drawing board with that item.

After the current initiatives are launched, Clinique will turn its attention to its key September launch, the Supermoisture Makeup foundation collection. "The idea is that it's a foundation that thinks like a moisturizer," said Lauder. "It's not just about shade or coverage; it's about how skin reacts."

As well, Greene announced that the brand has founded the Clinique Nursing Scholarship Program, which is designed to address and bring attention to the huge shortage of nurses in the U.S. "It's a natural fit with our dermatological heritage," said Greene. In addition to offering scholarships to promising undergraduates, the brand is also offering recipients paid jobs at Clinique counters during and after their schooling. While the first winners will come from the New York area, Greene has aspirations of eventually taking the program global. Lauder will be its spokesperson.

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