Thia Breen became the Bonne Bell buyer for her father’s drugstore when she was but an eighth grader, and the beauty business has been in her blood ever since. An executive who has combined her sharp intelligence with a well-developed appreciation for organization and an innate sense of fun, Breen has risen steadily through the ranks of the Estée Lauder Cos. Inc., accruing many firsts in the process—first female national sales manager for Aramis, first national sales manager for Origins, first to ignite the Lauder brand’s business in China. Today, as group president of North America, she oversees the company’s largest region, which represents more than 40 percent of global sales. Here, Breen talks about soaring skin-care sales, the rise of the multicultural consumer and how the huge global brands she oversees have mastered the art of thinking local.
What’s your assessment of the North American beauty market? We are thrilled to be part of very robust prestige beauty growth. For the second year, prestige has outpaced mass. We’ve seen a bit of a slowdown from last year, but still strong growth in terms of prestige.
What is fueling the growth? Skin care has been the predominant winner versus mass. That is a huge growth vehicle. Makeup, however, is the largest category in the U.S. We’ve seen great growth there. Fragrance growth has slowed, but it is still very important—if you don’t play meaningfully in December in fragrances in the U.S., you’re not going to win in those other two categories.
Where do you see the most opportunity? Skin care. It is part of our growth vehicle on a global basis and certainly we see it in the U.S. as well. We’ve had tremendous success with a pull strategy. If you harken back to Clinique Even Better Clinical or Estée Lauder Advanced Night Repair, it’s been tremendously effective for us to gain share against mass. We have seen a lot of consumers come in from this type of advertising and trade up to prestige. It is interesting in skin care, because we see the success at the Clinique Dramatically Different Moisturizing Lotion level and at the La Mer level. It is really across a breadth of price points.
What does that tell you? People want to preserve their youth and they know that skin care is an important component of looking good and looking healthy. Younger consumers are also more invested in skin care in a significant way. Early on, they are talking about antiaging. It is also a multicultural customer. The Latina customer is very involved in beauty, particularly skin care.
What does the industry need to pay attention to most in the year ahead? The growth of the multicultural consumer. By 2020, multicultural women will represent 40 percent of the U.S. female population and 50 percent of the under-25 population. Those are significant changes. That’s not in 20 years. That’s in seven years. We have to be aware of what she is looking for—it’s not just about shades anymore—and we have to make sure we’re serving her. We also have to ensure we are serving the growing boomer segment.
We call it “granularity of growth.” It’s not just, “We’re going to do this and everyone is going to love it.” We slice it into which category, which consumer, which subcategory is important to her. Looking at women 18 to 54 is just not enough anymore.
What are consumers looking for today from a department store experience? People have always loved the breadth of selection. Certainly we’ve seen this with our national partner, Macy’s. While they talked about a national Macy’s, their granularity of growth was in the My Macy’s program and understanding that a particular Macy’s in Minnesota needs something very different than one in Atlanta. Being able to customize your offerings to serve a local consumer is important. We’ve got global brands, but the consumer is always local, no matter where we are. Department stores understand they have to serve a local consumer and that can mean different things to different stores. Based on the numbers we see reported, consumers are voting for that. Where do you see room for improvement in the department store landscape? As we talk about the changes in the population, we have to be very aware of what these changes mean to them, in terms of assortments, offerings, advertising. Staying a step ahead of this fast-moving consumer keeps us very much on our toes.
Moving on to the rise of the beauty specialty store, how do you assess who you partner with? Are they additive or cannibalizing traditional channels? Sephora has been a great addition. When they first came, we didn’t understand them, really. We weren’t sure how this would resonate in terms of this major department store market that we had in the U.S. They’ve done a very good job. How do we determine how we’re going to play? As with everything in our portfolio, distribution remains the jewel in the tiara. Where we are going to sell our products is the most important decision we make. Those are brand-led decisions. Some brands might deem it a terrific opportunity and for other brands, not ready for that.
Ulta is uniquely positioned, in that sometimes they are in secondary marketplaces. Ulta gives you good alternatives to finding prestige brands in a very convenient setting.
When Lauder bought Smashbox, one of the reasons given was the brand’s strength in Sephora.What have you learned from them on a corporate level? Everybody at Smashbox thinks about their merchandise on a gondola. We are not quite as familiar with that way of thinking. At Smashbox, they understand that everything that goes on to that gondola has to be productive. We’ve learned a lot in terms of how to edit the offering, keep the most productive stockkeeping units, how to arrange them. Smashbox taught us how to allow customers to navigate and service themselves. They have taught us how to evaluate high touch in a gondola situation.
What emerging channels hold the most opportunity? We have a very big business online, between e-commerce and digital and mobile, and in many instances the customer goes there first. We know that many younger consumers enter into a brand digitally. We have to think about that being her first impression of the brand or the product. We spend a lot of time and effort in insuring that our sites are very well done, easy to navigate and understand.
We also have quite a few freestanding stores—over 500 in North America. That is a great expression of the brand. We have a lot of discussion about how we can become better retailers and make sure the experience is just perfection. A brand’s freestanding stores need to be an amazing experience.
There are 500 now. How many do you see by 2015? We continue to look at opportunities, but I don’t think you’ll see significant expansion.
You’re a born retailer—literally. What advantage does that give you? It’s been a great advantage. I always think of the customer first. It’s how I grew up in the drugstore. I add a few more zeros to the business, but still, that whole idea of, “Do we have what the customer wants? Is she coming back?” Although we’re involved with over 25 brands, it still is one customer at a time.
The other thing is that I love retail. I love retailers. I love going to stores. None of that has ever become old for me. At a recent meeting, I saw our brand manager from Hong Kong and I said, “How is Rita doing?” She said, “Rita! How do you remember Rita?” Rita was the business manager at Sogo Causeway Bay.
I think about the people who represent our brands, the beauty advisers and makeup artists, and if anything has to be right in the equation, that is it. There can be supply chain issues and we might have missed an advertising date, but if what happens at the counter between the consumer and beauty adviser is really good, that’s what we live for.
What drives you? I’ve always wanted to be good at what I do. I want to be successful at what I do. I love to work and I love not to work. I tend to be pretty efficient. I like the people I work with. I really don’t have bad days.
How would you describe your management style? I like to ensure that I surround myself with top talent. By doing that, I can offer counsel should and if they need it. I don’t overly manage my team. But that takes top talent—you have to ensure you have the right people in the right places, and I do.
What do you look for when you hire? It’s important that people are able to collaborate with others. We have a complexity in our roles, whether you’re dealing with supply chain or human resources or legal or our corporate strategy group—we have lots of different support teams that can help you be more successful in your role and it takes a pretty collaborative effort to ensure everything goes right on your brand. It’s good when people have a personality that gets along with lots of other types of people, because we certainly have them here. And high performance. I want people who want to win.
Is now a good time to be in beauty? Great time! We just were looking at the growth trends for prestige beauty in the next five years, and if you take the low side of it, with a lot of risk, and the high side of it, it is still going to continue to be a very robust business. I would much rather be fighting for market share in that kind of situation than trying to slug it out in a zero-growth situation with my esteemed competitors. We are all going to be fiercely competitive, but there is going to be good strong growth in prestige beauty in the years to come.
Thia Breen is the group president of North America at the Estée Lauder Cos. Inc., overseeing the U.S. and Canadian affiliates. She joined the company in 1977 as an account executive for Clinique, and has since worked on a number of brands, including Aramis, Origins and Estée Lauder. A native of Benson, Minn., who grew up working in her father’s drugstore (she was the Bonne Bell cosmetics buyer at the tender age of 13), Breen returned to the retail side of the industry in 2003, when she became senior vice president of cosmetics and fragrances for Federated Stores, which included Macy’s and Bloomingdale’s. She returned to Lauder in 2005 as president of the company’s namesake brand, and was named president of North America for the company as a whole in 2009. She was promoted to her current position in late 2012.
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