Product Managers Who Want To Look Good Can Learn From Estee Lauder

by drjim on January 24, 2011

It's How Your Product Looks To Your Customers That Really Matters

It’s How Your Product Looks To Your Customers That Really Matters

As a guy, what I know about women’s make-up can pretty much be written on one side of a file card. With a lot of space left over. However, as a consultant to lots of product managers, I’ve always been very impressed by cosmetics products. They are a simple product that a lot of advertising makes seem very valuable. It turns out that the long global recession has hit cosmetics companies hard also and so their product managers are doing something about it – they are changing how they sell their products…

How Make Up gets Sold Today

Cosmetics is a big, big business. I’m not sure how large the market that your product plays in is, but the U.S. beauty market is a $58.8 billion (yes, that’s billion) market. However, the global recession knocked about 9% out of this market last year and so the product managers are starting to scramble.

It turns out that 1/3 of a cosmetics company’s revenues come from the products that are sold at department stores (remember them?) This has always been a great place to sell make up; however, times are changing.

Big Changes Are Coming To The World Of Make Up

Competitors are starting to show up. This competition is coming from both cheaper brands that you can find at drug-stores as well as niche brands that are getting big marketing pushes.

As though that wasn’t enough, the customers who buy make up are also changing. Younger customers really don’t like the way that make up has traditionally be sold at the big department stores. There you have to wait in line for a “consultant” who then tries to up-sell you on many other products. Oh, and the price of everything is hidden – you have to ask to find out how much things cost. This doesn’t set well with the young women who make up much of the market these days.

Estee Lauder’s New Plan

Estee Lauder is a company with three major brands that you may recognize: Clinique, Estee Lauder, and MAC (I even recognize the brands!) Their product managers have decided that they need to change how their products are sold in department stores if they want to have any hope of remaining relevant in the future.

First things first – to make changes in how your product is sold in a department store, you need the store’s cooperation. In the past, making a major change in a set of products that is one of the most profitable parts of a department store would create a lot of resistance from the department store. However, thanks to the recession, the department stores realize that something has got to change and are willing to play ball.

So here’s a fun fact for you: 80% of the women who use mascara replace it at least 2-3 times a year according to a survey done by the NPD Group. When it comes time to replace their make up, the younger customers really want to touch and play with the make up products. Estee Lauder product managers realize this and so they are redesigning how make up products are presented in the department store: they have easy access to the products and they can try them on before making a decision.

Time is a precious resource for all of us. The Estee Lauder product managers have come to realize that they need to make the shopping experience different for customers who have different amounts of available time. They’ve added an “express lane” to their displays so that women who know what they want can get in and get out quickly. They also offer areas where women can browse the different products and, for the customers who want it, they offer an area where customers who want a full beauty consultation can settle in for a visit.

What All Of This Means For You

As product managers we all wish that our product was as highly desired as women’s make up is. Even if we don’t work in this market, we can still learn a lot from the changes that the Estee Lauder product managers are making to how their products get sold.

As the characteristics of our customer base changes (e.g. they get younger), we need to adapt to how they want to shop for our product. The way that we used to do things may no longer work. Estee Lauder’s product managers have discovered that their customers want to be able to touch and play with their products instead of having company employees hovering over them all of the time. Additionally, respecting how much time our customers have could make it easier for them to buy from us.

Watching what Estee Lauder does and learning from their actions can go a long way in helping product managers better meet their customers needs. Take some of the same actions and who knows, your products might come out of this looking even better than they do today…!

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: Do you think that you can sell your product to both young and older customers the same way?

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What We’ll Be Talking About Next Time

Ah, conference calls / video calls – it’s a love / hate relationship that product managers have with this staple of the 21st Century workplace. Sure they are a great way to pull together a team that is working remotely, even in other countries, but there sure are a lot of drawbacks to trying to manage a product using these tools. If nobody has ever told you how to use conferencing technology correctly, then maybe we should have a talk…

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