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Real Relationships Power the Beauty Industry

Nancy Jeffries
Shiseido Cosmetics America CEO Heidi Manheimer and Bloomingdale

Heidi Manheimer, CEO of Shiseido Cosmetics America, and Michael Gould, chairman and CEO of Bloomingdale’s, discussed strategic business partnerships at the September 2013 CEW Newsmaker Forum.

On September 19, 2013, Cosmetic Executive Women (CEW) presented a Newsmaker Forum featuring two icons of the industry—Heidi Manheimer, CEO with Shiseido Cosmetics America, and Michael Gould, chairman and CEO of Bloomingdale’s. The presentation, titled, "Strategies for Profitability: Michael Gould and Heidi Manheimer Talk Business," was held at New York’s Harmonie Club, and it provided a look at the corporate partnership that has been a success for both companies, as well as a glimpse into the creative minds of two leaders, who according to CEW president Carlotta Jacobson “are quite unusual.”

Jacobson said, “This event wasn’t easy to organize, as neither of our guests like to be in the limelight.” That said, she noted, “Michael Gould and Heidi Manheimer are well-regarded in the beauty industry for their strong leadership skills and outside-of-the-box thinking, and success hasn’t really spoiled them. They are both no-nonsense executives, and they both have hearts of gold.”

Jacobson also thanked the evening’s sponsors, including WWD, Firmenich, Arcade Marketing, Beauty Inc, Winston Beauty, DSM Nutritional Products, Array Marketing Group, Applause Printing & Graphics, Kaplow Communications, and Digital Therapy.

Jerry Vittoria, president of Firmenich, North America, recognized the evening as “an event devoted to thought leadership, that would further the professional lives of beauty achievers.” He said he loved the back-to-school feel of the event (except without the homework), and noted that it is an important forum to come together in ways that are inspiring to us all.” Gould, who he said is often referred to as one of the most inspirational leaders in the industry, and Manheimer, who is the first American woman to be named CEO of Shiseido Cosmetics America, would surely be an inspiration to those in attendance.

The Retail and Consumer Equation

Jill Scalamandre, moderator, chairperson of CEW and senior vice president of the philosophy brand and Coty Prestige Skincare, kicked off the discussion with a focus on the role of retail experience in the beauty industry. Manheimer—who began her beauty career at Bloomingdale’s, held integral roles at Barney’s New York as VP and divisional merchandise manager of cosmetics, fragrances, and apothecary, and was appointed CEO at Shiseido in 2006—said, “Everything is consumer driven, and being a buyer and servicing consumers provides a unique perspective.”

Gould, who got a taste for retail after a brief stint at Abraham & Straus, began his tenure as CEO at Bloomingdale’s in 1991 and has seen the greatest period of transformation and growth in the store’s history, provided a philosophical perspective. He said, “There are so many great brands in this room, and what we put in our bag tonight is a product from Shiseido, a couple from Bloomingdale’s, and a packet of parables.” These represented such writers as Charles Swindoll, who emphasized the importance of attitude; Abraham Lincoln, on resilience and careful listening; Richard Stengel; and Nelson Mandela, whose “Eight Lessons of Leadership” have apparently been a guide for Gould.

Mandela, who overthrew apartheid and created a nonracial democratic South Africa by knowing precisely when and how to transition between his roles as warrior, martyr, diplomat and statesman, was a master tactician. Clearly, Gould is a supporter of the ability to put yourself in other people’s shoes, and it has served him well in business. “I learned it can’t always be a win, it can’t always be a loss,” he said, applying the leadership concepts he values, such as leading from the front, but not leaving your base behind; knowing your enemy; keeping your friends close and your rivals even closer; remembering to smile; and remembering that nothing is black or white.

Manheimer related the value of a retail background saying, “First and foremost, you need to ask, ‘Are your core values reflected in your brand?' When someone has been in that house [referring to the retail venue], you learn what the customer is expecting,” she said. Gould also noted the importance of keeping things fresh. “We’re always changing. In the past we had our store—no Internet, no international opportunities like we have today. Things have changed,” he said.

“The consumer is everywhere, and you have to meet them everywhere,” Manheimer said. “To get a win-win for both Shiseido and Bloomingdale’s you really need to work with the store. Figure out what’s important to them. It goes back to our two brands, Shiseido and Bloomingdale’s, and we think we share the same consumer.”

Manheimer noted that for Shiseido, the company’s backbone is service, and facial service is key to the company’s credo. “Bloomingdale’s taught us that the service is important, but for Shiseido the service and the makeovers have a different component in store. They are used at Bloomingdale’s to educate the consumer as well as provide a service,” she noted.

The Brand DNA

“We like to say, Bloomingdale’s, a place like no other,” said Gould, noting, “If I really have great people, that’s the correlation with a great business. Ninety-nine percent is reliance on the good people you have. First and foremost it has to be a culture where the people come first. Great people and great product are the key combination. You can like our DNA or not, but we’re of the moment.”

“Have you seen Brueghel’s paintings?”, asked Gould. “There’s a lot of energy going on. I’m not going to out-design Neiman’s, but the more exciting the store is, the better the experience, and the better the online experience is going to be. But, once you’re in the store, the sights, smells and senses have to be engaging. You have to rely on relationship building within the store to make it exciting,” said Gould.

Continuing, Gould asked, “How do you make the store the event place it is and be credible?" He cited the importance of having great brands, products and programs, like the current Beatles project in store, or Space NK initiatives. “It’s about information giving, and we are doing something that translates excitement to the customer.”

According to Manheimer, Shiseido shares a common denominator with Bloomingdale’s. “Shiseido is over 140 years old and was built on facial service. Our website enhances the relationship because the consumer already has the information about the products. The real goal is not whether the product is bought in the store or online. It is that the consumer wants to get the product whenever and wherever they can,” she said. She noted that Shiseido’s growth is also seen on their retailer’s site. “What we see is a real desire on the part of our consumer to be in touch with someone who knows what they need and want.”

Gould explained how important emotional, intellectual and psychological involvement are to engagement. “What we do in the store to get people involved is important. How do you make it better? For me, it’s all about involvement.” Manheimer noted the challenge of turning a transaction into a relationship, asking, “If we do these events, how do they translate into repeat visits? How do we drive the business through relationships? That’s what we are trying to do, for example, with our beauty advisors.” Gould said part of the challenge was trying to find out how to really maximize the abundant information they have in the store.

“While there is a level of loyalty already established, we want to find the new customer, as well as make sure the customer wants to come back. It is also key to know how to deal with the consumer. Having key people who know what hospitality is and can offer it to the consumer is very important,” said Manheimer.

Scalamandre noted that statistical findings suggest millenials will outspend baby boomers by the year 2014, asking how do we keep current? Manheimer said, “Shiseido has launched a brand new line, called the Ibuki Collection, to a brand new consumer, which is designed specifically to address the unique skin care concerns of millenials, women ages 25 to 34. We are also doing a collaboration with Bloomingdale’s.” Ibuki, which translates as inner strength, consists of a collection of products designed to correct imperfections, strengthen skin’s resilience, and help fortify the skin on a cellular level, combating visible pores, blemishes, and uneven skin tone.

Gould agreed that new customers are important, but that nurturing all customers is an imperative. He cited the Parable of the Mountain, offered in the evening’s information packet, which relates the story of Lao-Li and the great master, Hwan, in ancient China. Here, the view from the top of the mountain, Mount Ping, is different from what one sees at the bottom of the mountain. Gould suggested the importance of bringing this lesson to life. “What you cannot see can be seen from a different part of the mountain,” he said.

Gould reiterated that this is one of the problems of leadership. “You have to see it from two different angles. There are always two sides to everything. It costs me five times more to get a new customer than to nurture an established one,” he said. And he added, 38% of Bloomingdale’s shoppers last year bought beauty. “What are we doing to nurture that? It’s not complicated. To be someone’s friend is different from being someone’s sales associate. This is part of our thinking. It becomes a relationship, not just a transaction. If the customer trusts us, how do we take the opportunity to nurture this? We need to nurture the customer. The online people think the in-store people are dinosaurs. But, we need each other. With a brand like Shiseido, or Dior, for example, we need to ramp up that business to get more of these customers into the store."

Legacy for the Industry

Gould also noted that, in addition to the important legacy left by your parents to you—and your hope to leave the same—on a personal level, there is also a business legacy. That, said Gould, “Is to remember, there is no ‘I’ in team. I know I have the best team, not just in beauty, but across the board.” Quoting Jack Welch, former chairman and CEO of General Electric, Gould said, “I control two things, human capital and money capital. That’s what it’s about. I hope my legacy will be that I gave people an opportunity to be more than they thought they could be.”

He said that while 14 new executives were slated to start work at Bloomingdale’s this coming week, it was important to remember that a new phase of their education was beginning. “Your education didn’t start with your Harvard degree. Today a new education starts. Life is an endless process. It doesn’t have a summit. At Bloomingdale’s our culture helps people grow.”

And Manheimer said, “I also have the best people, and as for a legacy, I hope I make a difference in someone else’s lives. If I could have made a difference both personally and professionally in someone else’s lives that would be my biggest hope.”

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