Estée Lauder is the founder of a world-famous cosmetic concern. Fragrances, perfumes, and cosmetics produced by the concern are sold in many countries. You could even say that, in a way, this billionaire has become to the cosmetics industry what Sam Walton is to commercial activities - and maybe even more. Like him, she focused on innovative solutions, especially in the field of direct marketing: her main weapons were free samples, demonstrations, and promotions. Estée Lauder's influence on the cosmetics industry is unquestionable.
The exact date of birth of Estée Lauder, and more specifically of Josephine Esther Mentzer, has never been formally confirmed. The most common date is July 1, and for the year: it is speculated that she was born in 1906 or 1908 in Queens, New York. As she wrote about her age in her autobiography: this is the best-kept secret since the Allied invasion of Normandy (Cross, p. 243). When asked about her age, she liked to say that it didn't matter.
Her parents, Rose Rosenthal Schotz and Max Mentzer were from Hungary and Czechoslovakia respectively, Max Mentzer owned a hardware store where his daughter even had the opportunity to arrange display windows. Estée Lauder was the youngest of their children. She attended a school not far from her father's store and graduated from Newton High School in Queens. She inherited her middle name from her aunt, and its colloquial sound - Esty - evolved into the well-known French version of it.
Estée Lauder first encountered the beauty business thanks to her uncle, Dr. John Schotz. He was a chemist who came from Hungary to the United States in 1900. He had his own company, New Way Laboratories, which he founded in 1924. It is said that he even prepared his cosmetics in the kitchen of the Mentzer family in Queens, which his niece was watching. Estée Lauder worked at her uncle's company as a saleswoman until the 1940s, selling, among others, his then-famous Viennese cream. Soon, however, she was about to start selling her own fragrance compositions.
On January 15, 1930, she married Joseph Lauter, son of Austrian immigrants. Over time, he changed the wording of his surname to the original, family name, i.e. Lauder. In 1933 their first son Leonard was born. Interestingly, at that time, Estée also dreamed of an acting career, she even tried her strength by playing at the Cherry Lane theater in New York. However, this passion lost out to her passion for cosmetics, and she was doing better and better in this industry. Estée and Joseph's paths temporarily parted ways, reportedly in part due to disagreements over Estée's successes. On April 11, 1939, the couple divorced, and Estée left for Florida with her son. However, three years later, when Leonard fell ill with mumps, they decided to go back together. Later, on December 7, 1942, they got married again, so that, as Estée herself said, they would not be separated for more than a few days. This year, their second son, Ronald, was born. In 1946, she and her husband founded their own company, Estée Lauder Company. At the beginning of their journey, they owned "only" $50,000.
In February 1944, she established her own office. Shortly thereafter, she won a concession to sell at the Bonwit Teller supermarket to sell on Saks Fifth Avenue. However, Bob Fiske, head of the Saks cosmetics division, refused to grant her a license, saying there was no demand for Estée Lauder's products. She herself, therefore, decided, as Jayanta Nanda writes about it, to create a demand. The cosmetics produced by her were distributed during the event at the Waldorf-Astoria hotel, and in the future, it was to often use various types of shows. Bob Fiske had to revise his attitude.
This was the first example of Estée Lauder's use of direct marketing. She finally obtained the license in 1948, and Robert Fiske's first order was for $800. At the launch of the sale on Saks Fifth Avenue, she sent out gold-lettered invitations to key customers in the store, letting them know that a free cream powder would be included with each purchase they made. Her cosmetics stocks (cosmetics, perfumes) sold out in just two days.
In 1950, she established cooperation with Nieman Marcus located in Dallas, Texas. Another example of the use of direct marketing by Estée Lauder was the actions taken by her when the BBD & O agency dealing with marketing activities refused to organize her advertising campaign. So Estée Lauder decided (using a mailing list from Saks) to send out free samples of her cosmetics by post, which was to serve as an incentive to buy them later. Later, it only improved its marketing methods, introducing various types of innovative solutions and promotions. For example, when buying its products, you would get a free gift (Nanda, pp. 251-252). The strength of Estée Lauder's marketing activities is also her advertising slogans. One of her famous advertising slogans was: "Time is not on your side, but I am."
On the one hand, in marketing, she largely focused on direct contact with potential clients, believing that it was more effective than any advertisement, e.g. in a newspaper. Mary Cross mentions in this context her famous "three-part" marketing motto: "Tell-A-Gram, Tell-A-Phone, Tell-A-Woman" (Cross, p. 246). Ordinary word of mouth was a tool she used extensively. On the other hand, she tried to use famous women to promote her products. For example, she sent samples of the Duchess of Windsor and the then Hollywood star Grace Kelly. She assumed, not unreasonably, that both the public comments of such women and the conversations they had with their friends would increase the number of her clients. It is possible that she did not hesitate to spontaneously create events to further increase the recognition of her brands. Mary Cross supposes it might not be a coincidence that she spilled Youth Dew perfumes at the Lafayette Gallery in Paris - such spectacular fragrances must have attracted customers.
Simultaneously with conducting marketing activities, Estée Lauder developed its cosmetics offer. The fragrances of the perfumes produced by the concern are certainly known. In 1953, the aforementioned Youth Dew perfumes appeared on the market, in 1965 the Aramis line for men was introduced, 1978 was the time of White Linen, and in 1985 another famous line, simply called Beautiful, entered the market. There was also an increase in the number of places where you could buy Estée products that had "crossed" the border of the United States. In 1960, the first foreign point of sale was opened, it was located in Harrods, London. In the following years, more points began to be created in South America, Australia, Germany, France, Japan, and Belgium. Estée Lauder Company even managed to enter the USSR, which happened in 1973, and to the People's Republic of China in 1993.
For a long time, Estée Lauder tried to maintain the family nature of her company. It only gradually withdrew from direct management of the business. For example, in 1972, she transferred control of the company to her son Leonard. The family nature of the company did not change until 1995 when the company went public and the founder retired. Ronald did the same in 1999, after 27 years as president. On April 24, 2004, Estée Lauder died. She was 97 then.
However, the Lauder family still owns a significant number of shares, and over the years both her sons Leonard and Ronald, her daughter-in-law Evelyn, grandson William and great-granddaughters Aerin and Jane were involved in their activities over the years. Currently, the CEO is William Lauder, Leonard Lauder is in the company as retired president, Ronald Lauder is the president of Clinique Laboratories (interestingly he was also the US ambassador to Austria for some time, he also worked for the Pentagon), Jane Lauder - executive vice president.
Estée Lauder herself has had many successes. The French government awarded her with the Order of the Legion of Honor. US President Richard Nixon wanted her to become the US ambassador to Luxembourg, but she refused. She was included (as one of the few women) by Forbes magazine in the list of the 400 richest Americans. In turn, in 1998, "Time" placed her as the only woman among the 20 most influential people of the twentieth century. In her life, she successfully competed with other women who promoted their cosmetics brands, fragrance compositions and who started their activity even before herself. Examples of such women include Helena Rubinstein, born in Krakow, and Elizabeth Arden.
The financial results of the company established by Estée Lauder are spectacular. In 1968, the company had revenues of $ 40 million, the first billion reached in 1985, while in 1999 it was already 3 billion, and in 2008 the revenues reached 6.4 billion. Estée Lauder brands are Aveda, Bobbi Brown, Clinique, Flirt, Donna Karan Cosmetics, Aramis, La Mer, Tommy Hilfiger Cosmetics, MAC, and Origins. Many of them were simply taken over by Estée Lauder. This was the case with MAC in 1994-1998, Bobbi Brown and Aveda in 1997, Stila Cosmetics in 1999, and Jo Malone in 2000.
These products are sold in over 130 countries, so the fragrances produced by Lauder Companies are known in most countries of the world. More than half of the company's turnover comes from the Americas, 1/3 in Europe, the Middle East, and Africa, and just over 10% in the Asia-Pacific region. In 2008, the Estée Lauder Companies "was responsible" for 45% of luxury cosmetics produced in the United States and 20% of such cosmetics in Europe and Australia.
At the same time, the giant responsible for the famous fragrances created by Estée Lauder was repeatedly involved in charity activities. He financially supported the renovation of the Weralski Palace, and on the other hand, the construction of playgrounds in Central Park in New York. It declares itself as a company that does not test its products on animals unless required to do so by law. On the other hand, as is the case with probably every financial giant, the Estée Lauder Company is not entirely free from controversy. As Julie Willet recalls, when the campaign for safe cosmetics was carried out in 2005 in California, the Estée Lauder Company lobbied against actions aimed at introducing legal regulations that would oblige cosmetic companies to inform about the use of all toxic chemical ingredients in their cosmetics.
Bibliography:
- Careers in Consumer Products. 2008 Edition, Wet Feet, San Francisco 2008.
- M. Cross (ed.), 100 People Who Changed 20th-Century America, ABC-Clio, Santa Barbara 2013.
- R. Grayson, Estée Lauder. Businesswoman and Cosmetics Pioneer, ABDO Publishing Company, North Mankato 2014.
- J. K. Nanda, Management Thought, Sarup & Sons, New Dehli 2006.
- J. Willett (eds.), The American Beauty Industry Encyclopedia, Greenwood, Santa Barbara 2010.
- The official website of Estée Lauder Companies https://www.elcompanies.com and its Polish version: www.esteelauder.pl, accessed: 13/08/2021.
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