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Mecca Cosmetica’s Chief on Building the Store of Tomorrow

Jo Horgan described services as a “key unlocker” to the future of brick-and-mortar retail, as they translate into increased traffic and higher sales.

Over the past 21 years, Jo Horgan has built Mecca Cosmetica into a beauty wonderland — and powerhouse. It’s now Australia and New Zealand’s largest prestige beauty retailer, with more than 100 stores and a booming dot-com business, but she’s not stopping there.

Resilience and agility are part of Mecca’s strengths. Within 24 hours of lockdown, online consultations were established and communication touch points skewed toward digital. Sixty percent of the retailer’s pre-COVID-19 business migrated online, and within a month it was 80 percent.

“When you consider we were only doing 15 percent of our business online prior to COVID-19, it was an incredible shift,” said Horgan, speaking with Jenny B. Fine, executive editor, beauty, WWD and Beauty Inc.

Mecca ensured its employees financial support, stuck with its payment terms for its brands and shifted its education program to the virtual realm, with more than 120,000 hours logged.

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The strategy worked. “We maintained our customer-employee satisfaction rating of 77 percent,” said Horgan.

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“The upshot of all this was that we had positive sales year-on-year for 10 out of the 12 months last year, and we ended [2020] up plus 10 percent, versus an industry as a whole which was down 8 percent,” said Hogan.

Moreover, such results were achieved without discounting.

Although Mecca’s stores were closed for a short while, Horgan still believes in the retail experience. “Brick-and-mortar truly is alive and kicking,” she  said. “Footfall levels are actually returning to pre-lockdown levels. It’s clear that customers are wanting this human touch and physical experiences.”

For Horgan, growth lies in blending digital and physical retail in compelling ways. “The real question becomes: How do we truly innovate?” she said. “How do we provide that unique Mecca customer experience online, the same way we do in store? That for us is going to be the game-changer.”

In Sydney last November, smack in the middle of the pandemic, Mecca opened its largest store. At 19,275-square-feet, it’s also the southern hemisphere’s biggest beauty seller. Thirty-five percent of the three-story space is dedicated to services. These include “first-class airline seats” for mini facials, plus services related to injectables, fertility, ear piercing, hair, nutrition and brows.

“We are trying to redefine what beauty means,” said Horgan, noting that services generate more than 20 percent of the flagship’s sales. She described services as a “key unlocker” to the future of brick-and-mortar retail, as they translate into increased traffic and higher sales. “Our occupancy rate is 88 percent to date, which when you consider how many services we’re offering is extraordinary.”

Some of the flagship’s services will be rolled out elsewhere, such as the facial pods, while master classes with founders like Gwyneth Paltrow and Gucci Westman are livestreamed to other stores, for instance.

Meanwhile, helping grow brands remains key at Mecca. “Having brand exclusivity isn’t enough. It’s what you do with the brand that matters,” said Horgan.

Mecca manages each aspect of an exclusive brand, from shipping to distribution, education and marketing, a model Horgan maintained is more valid than ever. “It provides certainty for brands, customers and us as a business,” she said.

She noted that NARS Cosmetics, a Mecca exclusive for 23 years, is Australia’s second-largest prestige beauty brand, but that the model works for emerging names, too. “We have new brands who are coming into the market and have immediate access to 25 percent market share, a full supportive model because of this exclusivity,” said Horgan. “They could never get that customer another way.”

A lot of runway remains left for Mecca in Australia and New Zealand, she maintained, while sights are being set abroad.

Mecca recently entered Tmall Global in China, and the question now is whether the retailer expands into brick-and-mortar in such a country.

“Or do we say: ‘We’re also number one in Australia online, and is there opportunity for us to explore different markets digitally first?’” mused Horgan. “The world’s a big place.”

For more, see:

Mecca Brands Opens Its Largest Australasian Store in Sydney

Australia’s Mecca Brands Launching Chinese Flagship With Tmall Global

Temperature Checks and Face Shields: Mecca Brands’ New Normal