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Douglas’ Tina Müller: Building a Better Platform

The executive has catapulted the premium beauty retailer in the digital age.

As chief executive officer of Douglas Group for the past three years, Tina Müller has revolutionized Continental Europe’s number-one premium beauty retailer into an online powerhouse.

Müller is a beauty industry veteran, having spent 18 years at Henkel, lastly as corporate senior vice president, chief marketing officer and regional president West Europe.

“It’s a fascinating business,” she said of beauty. “It’s very purposeful, because beauty has something to do with recognition, self-confidence. It’s not only about outer beauty, it’s also about inner beauty. By making a life more beautiful, it’s also improving our society and the world.”

Müller was so captivated about beauty that she wrote a book on it, called “Zum Jungbleiben ist es nie zu spät” (or “It’s Never Too Late to Stay Young”) in 2014.

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But she has also stepped outside of her comfort zone, overseeing strategic brand and product management at car manufacturer Opel.

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“It’s really useful at one moment in time to do something completely different,” she said. “At least in a different industry.”

Müller, who is German, studied economics there and in France. For her master’s degree, she wrote a thesis on the brand Dralle Beauty that was acquired by L’Oréal, giving her a first taste of the business.

She’s been smitten ever since.

How would you describe your overall vision for Douglas?

Tina Müller: We want to be the number-one beauty platform in Europe. By platform, I really mean in the digital way, because it’s not anymore about multichannel or omnichannel business. It’s the next step—where we move into a platform economy. We did that step a year ago, when we opened our digital marketplace in Germany. That’s where we connect and curate between our customers and the brands. We are sitting somehow in the middle of that platform. Our vision is to serve our customers in the best way to make their life more beautiful, and give them everything they need to live their own kind of beauty.

On that platform, we have mainly two pillars. One is the e-commerce business—our own online shop and then the marketplace. The other pillar is our stores. The interesting move is that it’s not two channels. We integrated them on one platform. It’s one holistic customer journey.

What does Douglas’ digital-first strategy involve?

T.M.: When I started, we came up with our strategy, which was called #forwardbeauty. The hashtag was very much on purpose, to make sure that the whole company needs to digitalize and not only the e-commerce business. For that, the approach was to say: “OK, we are market-leading, and we want to behave like a leader in terms also of innovation and leadership, and beauty is the essence of our business.”

We’ve updated our strategy to #forwardbeauty.digitalfirst. Why digital first? Because we see more and more that consumer behavior is changing. It’s going much more online. So already in 2018 we put e-commerce in the center of our strategy, but we had several pillars connected to the house. Now, we move from the house to the platform. So it’s not different pillars, it’s every channel is now sitting on the same platform in a holistic way.

We have some key enablers in that strategy, which differentiates us from the competition. There’s the assortment. When I started we had something like 25,000 products, which we sold in our 2,400 stores and online shops. Now, we have 100,000 products. They’re sitting on the digital platform—one part in our own online shop and the other in the marketplace. The assortment is really key, because our goal is that whatever you want and need to enhance your beauty, you should find it at Douglas.

Corona was a digital accelerator. We had 40 percent new customers for our online business and have seen up to 70 percent sales growth in our e-commerce business during the pandemic. Even after the first lockdown it’s very high growth. And now, with the second wave, I expect even more people will get used to the online channel.

What are some of the early executions of the digital-first strategy, and what’s to come?

T.M.: When we opened our marketplace last year, the result was so great that we decided to roll it out quickly to all the other European markets. We are now in the rollout plan. It will come soon also to France. It’s already rolled out to Austria. We go now from country to country. During [the coronavirus pandemic] we are offering much more shopping, entertainment and curation.

We introduced Douglas live shopping. It’s kind of a home-shopping channel, but not in the traditional way. Every week we have sessions with a brand. Last week, for example, it was MAC, with a makeup artist for MAC doing a tutorial. You can immediately buy through that live shopping event the related products.

That goes beyond a normal selling show. It’s about learning, experience, service and tutorials. We see a huge demand for that, and it’s easily done virtually.

We produce content in our own studio here to inspire and serve our customers.

We are working very closely with influencers also when it comes to live shopping. That’s more than just selling products in an e-commerce shop. That’s also Douglas’ philosophy—to enter in a very close relationship with the customer.

Another hot topic for us is personalization. We work with millions of data points, and it’s based on artificial intelligence. We are building our own algorithms to personalize and move into a one-to-one marketing approach.

With our app, customers get a completely personalized shop and inspiration based on all the data points we have from a single customer, and also from the complete customer databank with this machine learning behind it from which we learn and then we personalize. The effect is that the conversion rate goes up significantly.

We are hiring more than 100 tech people for headquarters, because we in-source the knowledge a lot now. It’s our inner knowledge—how we work with data, set up the algorithm, work with artificial intelligence. That’s something which we want to keep in-house and not rely only on external sources and agencies. So we are building our own hub for technology in order to make Douglas even more competitive.

What else are you doing to support the new online shopping habits?

T.M.: You need an excellent search function to find what you need, and excellent inspiration. We give this inspiration with our newsletters, which are targeted to certain beauty groups, segments and target groups. When the click rate is higher, the opening rate is higher and then the conversion rate in our shop is much higher.

With the 44 million beauty card customers, we have even closer relationships and know even more about them. So we can segment them differently and target them even more individually.

How has the Douglas consumer base changed during the pandemic, aside from there being more shoppers online?

T.M.: An overall trend we see in the market is in up-trading. The average basket became higher, and that’s not only online. We also developed our assortment strategy much more into the skin- and hair-care categories. Douglas historically was always very strong in the perfume category.

How else has your product selection changed?

T.M.: Products come not only from the inner core of the selective markets…we are also now introducing a lot of mass-market brands. We’re not only concentrated anymore on beauty categories, but moving beyond beauty in terms of lifestyle by selling now on our marketplace jewelry, accessories, handbags and also starting with some fashion. That’s really quite interesting, because it leads to a lot more traffic on our platform, and the brands can benefit from that.

What is the role of brick-and-mortar going to be?

T.M.: The goal is not just to sell products anymore. What makes brick-and-mortar unique is the experience. We call it also “touch and feel,” because that’s the moment when you can really experience the products, get consultation and service. You want to smell a perfume, to see a foundation on your skin—especially when you buy a new product, when it’s not about replenishment. When you want to discover.

Inside Douglas' Berlin flagship
Inside Douglas’ Berlin flagship. Courtesy of Paul Schimweg/Douglas

The strongest factor is the human interaction with our beauty advisers. We know, for example, that 80 percent of our customers who go to one store never go to another Douglas store. They are very loyal to that one shopping location because they are very loyal to the one beauty adviser. That makes the store somehow unique.

Our strategy is to concentrate on flagships in different clusters. There’s specifically one cluster which became very successful: it’s the luxury store where we offer a specific product assortment which is very high-end and also very exclusive, because one part of our assortment…is exclusive brands, and the other is our own brands.

We have developed our own brand business a lot during the last three years, and not only as a price-entry category into the premium category.

The Douglas collection is the bread-and-butter for our own brand business, but we’ve also developed other new own brands. We created a new company for that. It’s a brand incubator, which is called Ultimate Skin Aesthetics GmbH. It’s a company in a company.

We very successfully introduced a German doctor brand to the market, which is called Dr. Susanne von Schmiedeberg. We also introduced a beauty nutrition brand called Inner Beauty. The name is the concept. So we’re crossing the border to health and to nutrition. Douglas also introduced a young brand recently, One.Two.Free! in the clean beauty segment. This portfolio makes us incomparable to the competition, because you can only find those at Douglas. And for the own brands, we have an over-proportionately high margin. So it also contributes to our profitable growth.

The One.Two.Free! brand
The One.Two.Free! brand. Courtesy of Douglas

How do you see wellness impacting the overall product mix?

T.M.: It goes from beauty to wellness to inner beauty to health: That’s the journey over the last years, because everybody understands that the foundation of being beautiful is also being healthy. Health has a lot to do with how we behave, what we eat, how fit we are, how much sport we do—and it gets now into a holistic concept.

That all is now coming together. We started to cooperate with online platforms selling pharma products without prescription—pharma cosmetics and also specifically nutrition. It’s really a booming market. We see a high acceptance by our beauty customers to shop in those categories also.

What is your philosophy regarding the brand matrix?

T.M.: “If it’s not at Douglas, you can’t find it elsewhere.” That’s the target. We are working towards this, but we are not yet there. With 100,000 products, we are getting there, step by step. Our target is to really have the brands in our assortment coming from everywhere in the world. We work with specific trend scouts, also in the independent brand field.

There are a lot of founder brands. We have a start-up challenge here in Germany at the headquarters, where we invite young founders to present their brands. Then we help them to market the brands. We give them a platform, coach them and introduce their brands in our assortment. We also support them on our own media channels.

How would you describe your leadership style?

T.M.: I would say it’s strategic, entrepreneurial and purpose- or value-driven.

We worked a lot on the Douglas purpose. It is to make life more beautiful. But we came up with the second sentence, which goes definitely beyond beauty: For a world where everybody feels seen, heard and valued. We do this not only to beautify people or to give them the means to become more beautiful, but really also we want to contribute to a world where everybody feels seen, heard and valued, and that has a lot to do with diversity and inclusion.

That’s also something that influences my leadership style. The way you respect others, value others and treat others. Leadership is giving an organization a vision and a clear strategy.

What’s the biggest lesson you’ve learned in your career?

T.M.: There is one sentence which influenced me from a former leader in my life. It was: “If you can’t find a way, make a way.”