The Grayson Report
MOST HISTORIANS will tell you that it akes at least 50 years before you can get a true perspective on
events. Sometimes it takes even longer; note
the recent flurry of books on the Founding
Fathers. What can practitioners in the beauty
industry learn from the past? Does history
repeat itself? Or has the business climate
changed so much that all the old“rules” no
longer count? Have we all changed so much
that what was the norm years ago is ludicrous today? Think of the Hays Office, a
“voluntary” movie censor group, which
would allow a couple in bed only if she had
a wedding ring and if there was one foot on
Now, let’s take a look at the past five
decades of the industry to see what lessons
can be learned as we look to the future.
Although the modern era of the beauty
business began in the mid-1950s, Revlon
was already there, having launched the first
Suzanne & Bob Grayson
Suzanne and Bob Grayson are respected, professional marketers,
having spent their careers with the
leading companies in the beauty
industry before starting their successful consulting business in the
Their consulting clients have included Avon, Bristol-Myers, Estée Lauder, Procter & Gamble, Revlon and
Cover Girl, among others. They reside in San Juan
Capistrano, CA and maintain an office in New York
City. For more information, they can be reached at
pigmented, non-dye nail enamel in 1937.
Revlon became the top-selling cosmetic
brand in the mid-1950s, driven by the huge
and immediate impact of TV’s “$64,000
Question.” Estée Lauder started with skin
creams, but was propelled by Youth Dew
Bath Oil (1953), the high-impact/high-value,
long-lasting star product (more of what she
bought it for), and the GWP powerhouse.
It’s important to note that most great
companies were started with single, star
product and/or star drivers. Look where they
all are today (see chart p. 44)! Alberto-Culver
started with VO5 Hot Oil Treatment and was
scooped up by Unilever this year, largely because of it latest star product line TreSemmé.
Bare Escentuals’Bare Minerals was driven to
new heights on QVC by Leslie Blodgett before the company was acquired by Shiseido
in 2010. Christina Carlino did the same for
Philosophy, which was purchased by Coty
Noxell launched CoverGirl in 1959 with
a three-shade medicated makeup line. Together with Noxzema, Noxell created a winning formula. P&G usually only buys top
brands and acquired Noxell in 1989.
Maybelline’s mascara business, which
includes Great Lash, lured L’Oréal in 1996.
Today, when you include Lancôme, L’Oréal
dominates the world mascara business.
Neutrogena began as a translucent soap
bar in 1954, and this star that launched a
thousand products landed at J&J in 1994.
And if it weren’t for Smashbox’s primer authority, Estée Lauder would have never noticed! The message is: star products build
traffic, brands and companies.
Before the modern era, the business was
dominated by entrepreneurs who founded
the industry—Elizabeth Arden, Helena Rubinstein and Francois Coty. All were essentially fiefdoms run by strong leaders.
Personal rivalries added to the thrill of winning. Max Factor and Perc Westmore were
the first makeup artist brands, emanating
from the Hollywood glamour era.
Two powerful trends sprouted in the late
1960s and changed the face of the industry.
First came the emergence of mass distribu-tion/self-service, along with the shift from
independent drug to chain drug. Second
came the growing power of women work-ing/spending and wanting/needing to look
good. This burgeoning of beauty as a real
business, started the third trend.
Drug Culture Impacts Beauty
In the 1970s, drug companies began acquiring beauty firms in a search for growth. The
early mismatched acquisitions were doomed
from the start: Lanvin-Charles of the Ritz to
Squibb; Maybelline to Schering-Plough;
Arden to Eli Lilly; Max Factor to Norton
Simon to Playtex; Rubinstein to Colgate. The
buyers simply didn’t, or didn’t want to, understand the culture and tempo of the
beauty business. The buys were opportunistic, not strategic, and merely a way to get on
the acquisition bandwagon.
Revlon picked up a badly distressed Factor, (what did Playtex know about beauty?)
along with Charles-of-the-Ritz to fill out a
double bed—in which they both promptly
fell asleep. Savoring the taste of the higher
margin beauty business, P&G snatched Max
Factor from Revlon in 1991 and made Mr.
Perelman’s day. In fact, P&G was originally
after both Revlon and Factor, but the latter’s
greater global presence, combined with a
lack of trust in Revlon’s blue suit/buy-out
management, was a deciding “factor.” Besides, look at the great gift-with-purchase:
SKII technology from Max Factor Japan!
As the drug companies became disillusioned with their beauty acquisitions, they
began divesting them in droves: Arden and
Faberge went to Unilever, along with Calvin
Klein and Chesebrough-Ponds, which ultimately ditched Prince Matchabelli, Cutex
and Aziza. Maybelline was sold to L’Oréal,
Neutrogena went to J&J, and Helene Curtis
went to Unilever. All foreshadowed the
changes to take place in the new century.