By  on June 14, 2006

William Lauder said good retailers want beauty brands mostly for their consumer connection.

I'm just a humble brand keeper," William Lauder, president and chief executive officer of the Estée Lauder Cos., declared. The simple opening phrase was a response to the assertion of Limited Brands chairman and ceo Leslie Wexner that he is "just a humble shopkeeper."

Lauder continued that he is also a brand buyer and creator. Throughout his talk, he weaved in the obligation of brands to elicit an emotional response, and he challenged his industry peers to view their brands through the lens of the consumer.

"Most of us in this room feel passionately about our brands," he said. "The challenge we have is getting our consumer passionate about our brands."

Lauder talked of the "chicken-and-egg syndrome" between the brand and the store, and of the armwrestling that too often determines what brands go to which retailers. He noted the representation of a brand in a great store is important for success, but that the passion a brand exudes to the consumer is paramount.

But it takes an objective eye to ensure that the consumer will see the creativity in the company's product concept. Borrowing from Billy Crystal's classic character Fernando Llamas from "Saturday Night Live," Lauder said the temptation is to look at a project and say, "You look marvelous, you're such a wonderful lipstick." He cautioned that consumers, bombarded with new products, don't always share the marketer's love affair with the lipstick.

In an industry that offers consumers the same product, such as a lipstick, for a range of between $2 (?1.60/£1.10) and $32, Lauder commented that prestige companies win by offering a "wonderful experience" of full service in a high-end store. He noted the company found that, when it raised Crème de la Mer's luxury price point to $190 from $150, demand for the skin cream actually increased at Saks Fifth Avenue.

"It doesn't make sense," he said. Trying to untangle the consumer's logic, Lauder added that there are price bands within the mass and prestige markets where the shopper feels comfortable. "If the price is too low for what they are getting, they say, 'Something must be wrong.' If it's too high, they say, 'Well, it's just not worth it.' We're in a business that reinforces a consumer's wants, not needs."

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