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Demsey is continually filtering the new developments he picks up around the world, and has successfully applied many of those lessons to MAC. “If you look at MAC, most of the successes we have around the world, there is generally a flagship store that we own, which is not a beauty concept, it’s a fashion concept,” he says. “The decision to make MAC into a retailer was a defining tenet that to this day matters for the brand.”
Demsey actually began his career in retail, clocking time at Bloomingdale’s, Macy’s and Saks before joining the brand side. He points to recent phenomenons such as pop-up stores, flash sales, underground stores and crowdsourcing as factors that are changing the way he approaches the sector. “Retailing is becoming interesting,” he says. “People want to go to new environments and discover new things. People don’t just want to be sold product. They want brand experiences. They want feelings. They want to have a good time.
“The forms of commerce and communication and luxury and prestige and aspiration are starting to blur,” he continues. “It’s incredibly exciting and incredibly tricky. It’s a very fine line between what’s prestige, what’s masstige, what’s mass and how they cross over.” Out of the blurring must come extreme focus. “In the midst of all this clutter,” he maintains, “you must go back to the brand story. A long-term business isn’t sustainable unless you’ve got a strong brand story and can keep telling it in new ways and keep it fresh over and over and over again.”
Like his sister brand Clinique, Demsey has successfully tapped into the power of national television advertising to tell the Estée Lauder story. (“If you would have told me four years ago that the big news in marketing cosmetics was broadcast, I would have been surprised,” he deadpans.)
Another fundamental change he grapples with balancing is the incredible fragmentation of media. “You used to be defined by whether you advertised or didn’t advertise, or whether you were a word-of-mouth brand or not, or if you were on a paid for media basis or an earned media basis,” he says. “What community, online and YouTube have done is level the playing field. Just having a lot of money doesn’t mean you’re going to win the communications game. Strategic media tactics — in terms of breaking through the clutter — and ideas and brand stories matter a lot.”
One such brand story is Smashbox Beauty Cosmetics, the Hollywood-based makeup brand the Estée Lauder Cos. acquired in May 2010 for a reported $200 million to $300 million. Demsey had long known its founders, Dean and Davis Factor, the great-grandsons of makeup legend Max Factor, and helped spearhead the acquisition. “I thought Smashbox had a unique opportunity to institutionalize the Hollywood makeup position, which has been lost,” he says. “I also liked that they’re in the distribution that most of my brands are not. I know that people who buy my brands also shop in those channels,” he continues, referring to Smashbox’s primary outlets, such as QVC, Sephora and Ulta. “The development of Smashbox and the changing distribution patterns in terms of what you consider prestige to be, or multispecialty retailing, is an important evolutionary step in terms of the Estée Lauder Companies’ approach to an important segment of the market.”
Demsey also sees huge potential for Smashbox in Asia, where it is virtually non-existent. “In the time we were associated with Stila, the one part of the world where it was very successful was Japan and Hong Kong and Taiwan, and that was not a Hollywood position the way that this is,” he says, “so I know that a Hollywood position done correctly is commercial.”
Above providing the potential for another brand-turnaround success story, Smashbox — which also encompasses a photo studio and for which celebrity pho- tographer Davis Factor continues to be a creative force — most of all epitomizes the personal and professional passions that drive Demsey. An ardent photography enthusiast whose extensive collection lines the walls of his Upper East Side town house, Demsey is driven by the coupling of the creative with the business. (To wit: In one swoop, he recently bought four pictures during a day of management meetings.) “Fred Langhammer [Lauder’s chief executive officer from 1999–2004] used to say that nothing good comes without growth,” Demsey muses. “This is not just an exercise in branding. It’s the convergence of business dynamics, creativity, intuition, marketing and brand development. The reason why I love my job so much is the left-brain, right-brain thing,” he continues. “To be successful today, you have to be able to do both.”
The Demsey Doctrine: 5 Key Points
I Want My MTV: Popular culture drives mass consumption. Being plugged in— to movies, music, art, style, celebrity—is crucial.
Shock and Awe: Big ideas (like Tom Ford for Estée Lauder) can make an instant difference in a business where perception and reality are closely aligned.
Beauty Is Aspiration. Period: Demsey’s not selling lipstick. He’s selling the universal desire to be beautiful that exists across all price points, all retail channels and all geographies.
Fun and Games: Women shop because they like to have new experiences—not because they need a new product. Retail must deliver a memorable moment.
The Level Playing Field: In a world of fragmented media, all brands are equal.