BERLIN — Estée Lauder wants to change perceptions in Germany.
This story first appeared in the January 5, 2004 issue of WWD. Subscribe Today.
On a recent four-city tour through Europe, Lauder’s top brass — including the Estée Lauder Cos.’ group president Patrick Bousquet-Chavanne, who oversees the flagship brand, and Aerin Lauder Zinterhofer, vice president of global advertising for the brand — touched down in Berlin between stops in Paris, Milan and London. But, whereas the focus in the other cities was primarily on Lauder’s new fragrance, Beyond Paradise, in Berlin, the objective was to help break the company’s “skin care-only” image.
“We have to erase some older conceptions and preconceptions prevalent here about the brand,” Bousquet-Chavanne said. In Germany, especially, “Estée Lauder is known as a treatment house.” But, if you look at the company’s business worldwide, he noted, sales are more or less evenly split among fragrance, makeup and treatment.
Lauder is now working to strengthen the brand’s two other pillars — makeup and fragrance — in the German market. Makeup is a particularly effective tool to communicate newness, Bousquet-Chavanne suggested. Indeed, according to Sonia Michon Floc’hlay, vice president and regional brand director in Germany, Lauder already has moved from number five to number three in the market. “And we’re almost number two in sell-out. It’s already happening,” she said.
Pure Color is said to be the best-selling Lauder lipstick in Germany, but the company expects the global launch of Electric Intense Lip Crème in February to significantly push the category further.
“We don’t have a major fragrance [business] here,” Bousquet-Chavanne acknowledged. He said Pleasures did “OK, but not as good as we wanted. But Beyond Paradise will be a substantial launch.”
Another important tool for Lauder’s German brand refocus will be at point-of-sale. “It’s vital for the Estée Lauder brand that the new brand aesthetics come through at POS,” Bousquet-Chavanne stated.
Lauder will unveil its new counter design at KaDeWe in Berlin in March or April 2004. “It’s the same generation of design as in Selfridges, and will be a beacon for the brand in Germany,” Michon Floc’hlay commented.
“We’re trying to put more money behind it with some really good events at POS in 10 cities or so, so that consumers don’t just hear and read [about it], but can also touch the brand.” On the drawing board: a surprise event for the Electric lipstick launch, as lipstick is an “easy stopper for consumers,” she said.
Germany may still be one of the top 10 beauty markets in the world, according to Bousquet-Chavanne, but it’s also “one of the most challenging markets for prestige cosmetics. It’s the market with the slowest growth rate from 1998 to 2003.”
The troubled German economy, he said, has “impacted consumer consumption in general, and the prestige beauty industry has had a few challenges. Obviously, a lot of retailers like Douglas are focusing more on mass than class, and it’s essential that they redirect their attitude.”
For Michon Floc’hlay, this problem dates back to the days after the fall of the Berlin Wall. “When East Germany opened up, there was a rush to cosmetics in the mass market. And our retailers, including perfumeries, opened to mass and didn’t concentrate on prestige. Now everybody’s waking up to how important class is.” She pointed to the First in Beauty club of high-end perfumeries founded last year. “They’re showing we’re special, and now more [perfumeries] want to enter that circle.”
Bousquet-Chavanne also sees light on the horizon. The good news, he said, is that “Germany is bound to rebound. The country has gone through five difficult years, and the beauty business has been affected.”
Nevertheless, he predicted that in 2004, Europe, including Germany, “will feel the benefit of a U.S. recovery and the euro-dollar parity problem will change.”