TOKYO — It may have had humble beginnings with just one store in Melbourne, but according to Jo Horgan, founder and co-chief executive officer of Mecca Brands, her company is on track to become Australia’s largest beauty retailer by the end of the year. During her presentation, she outlined how she and her team meet the changing needs of consumers both online and off.
Horgan shared five of her business mottos, which she calls “Mecca maxims” and which have guided her decision-making throughout her career. One of them is “adapt or die,” which points to Mecca’s ever-changing store formats that have morphed since the company’s founding based on consumer needs. In addition to its e-commerce site, Mecca currently operates three retail concepts: curated, high service beauty boutiques on high streets; high-energy beauty playgrounds in malls, and one-stop beauty shops in department stores. The company’s business has quadrupled in the past five years, and it is the exclusive retailer in Australia for some of the world’s most well-known beauty brands.
Mecca has adapted to the changing market by listening and responding to customers and changes in their interests and consumption habits. This includes offering a variety of services in its stores, including professional makeup application, makeup tutorials, master classes, corporate master classes and more.
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“We dreamt up these experiences to deliver the holy grail in physical retail: instant gratification for the customer,” Horgan said. “We are basically upending the principles of retail space management. We’re taking 30 percent of our productive selling space, which we pay massive rent on, and we’re turning it over to a higher-cost-to-service, lower-return activity, but we hope to increase customer engagement and in turn customer loyalty.”
Engagement is a word Horgan used often during her presentation, particularly when speaking about Mecca Max, one of the company’s private-label beauty brands. The brand targets “beauty junkies” and leverages social media marketing and bold messaging to target plugged-in, Millennial consumers.
“For the launch we hit the digital airwaves, reaching 23 percent engagement levels, the highest seen in beauty in Australia ever, resulting in YouTube doing a case study on the initiative,” she said. “So far it’s worked: Mecca Max achieved sales of over $20 million [Australian] over Mecca Maxima’s 40 doors within the first 12 months of launching.”
Mecca’s efforts to target and cultivate a community of engaged beauty fanatics has paid off: it has an active customer base of more than two million people — impressive considering Australia’s population is just over 24 million — and its hashtag #MeccaBeautyJunkie has some 110 million posts on Instagram. Horgan said that it has engagement levels that are 70 percent above the industry average.
But it’s not just customers that Mecca values, but its own staff as well. Another of Horgan’s maxims is “our people are our power,” evidenced by the fact that Mecca Brands was named one of the top five “Best Places to Work” in Australia four years running.
“Mecca’s culture is my personal passion project, because I believe a highly engaged team is the secret to retailing success,” Horgan said. As an example, she said that during Mecca’s 20th anniversary last year, she personally celebrated with every team member in every state of Australia.
Asked by audience members about what Mecca’s next steps might be, Horgan talked about the opportunities that exist now that the company is in reach of becoming the largest beauty retailer in Australia. One area of opportunity is expansion beyond Australia and New Zealand, but Horgan said that, while the possibility exists, it is filled with questions.
“I think there are so many ways to go internationally now. We’ve focused very clearly on Australia and then New Zealand because they were very easy and logical markets for us to enter into,” she said. “As we look further afield, we don’t know the local real estate market, we don’t know the local labor market and it does become more complex. So for us, we have to weigh up, is that realistic? How would we go about it? Or as we develop our own brands, is that something we should take internationally? Or should we build our profile online first and then look to drive retail from that?”
Horgan said that, while Mecca has focused very clearly on female customers until now, another area of opportunity lies in men’s grooming.
“We have have not made a foray into the men’s market yet,” she said. “Interestingly, it looks like the first way we really will connect with the male market is through this male makeup artist movement that is happening, and that’s something that we’re really participating in. In terms of the more traditional male grooming market, it is on our radar screen because as we do head towards a 30 percent share in Australia, we have to think, how do we now extend? So there’s no question there’s a huge opportunity, and another one that we need to get cracking on.”