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20 Dec

Mecca’s Jo Horgan Looks Beyond ANZ for Growth –

Jo Horgan has spent the last 25 years constructing the business she founded, Mecca, into Australia’s largest prestige beauty retailer.

But as she notches greater than 20 years of growth and success, Horgan has little interest in taking a victory lap.

As a substitute, she’s using the chance to set a giant, daring goal — or BHAG (big hairy audacious goal) as she would say — for the following 25 years: global domination.

“We would like to be the world’s most loved beauty destination,” said Horgan, during a wide-ranging interview with Beauty Inc. “We’ve learned during the last 25 years that in case your customers absolutely love what you do and the way you make them appear and feel, and so they need to be a part of that community, you’ll prevail. Regardless of what.”

As audacious because the goal may sound, don’t bet against her, say those that know Horgan best.

“Jo Horgan is just like the Biblical King David of Israel who slew Goliath with a slingshot,” said Leonard A. Lauder, chairman emeritus of the Estée Lauder Cos. who first met Horgan when he toured her stores during a visit to Australia in 2000. “Jo was brave enough to establish shop in Australia,” he continued. “Not only that, day-to-day, 12 months by 12 months, she built her brand in such a way that it’s today one in all the most important beauty retailers in Australia. I love her tremendously.”

Jo Horgan

Josh Robenstone/WWD

“Jo is filled with enthusiasm, positive and high energy, which infuses Mecca with that very same spirit,” said Masahiko Uotani, chief executive officer of Shiseido. “Mecca has been very successful in creating and delivering latest ways for ANZ consumers to experience beauty and an equally strong e-commerce presence.”

The numbers bear out the accolades. Today, Mecca operates 109 stores in Australia and Latest Zealand and has a 25 percent share of Australasia’s 4.2 billion Australian dollar prestige beauty market; its business has grown tenfold within the last eight years since archrival Sephora arrange shop and doubled during the last three years of COVID-19 — despite its home-base, Melbourne, being under lockdown for longer than some other city on this planet.

Inside Mecca’s Sydney flagship.

“It’s pretty incredible, what she’s done,” said Mickey Drexler, the renowned retailer who headed up Gap and J. Crew and is currently CEO of Alex Mill, who was introduced to Horgan by Lauder greater than a decade ago. “I like how smart she is in business, which the outcomes speak to, and she or he is all the time searching for the following opportunity.”

Horgan’s vivacity also permeates her approach to the business. She’s funny, self-effacing and likes to laugh, a giant picture thinker who’s in a position to set a strategic vision for the business, rouse the teams with a rallying cry and execute impeccably. “She is filled with life, she has incredible energy and she or he is completely obsessed with her business and the wonder industry,” said Francois Nars, whose namesake brand has been sold at Mecca because the starting and is today the top-ranking brand there. “She also has great taste, which translates into all of the hassle she put into constructing Mecca. It was built on quality, great editing of the brands she carries and exertions.”

Despite her success, Horgan hasn’t lost her touch with shoppers — and it’s this that has led to her incredible success to date and can proceed to pave the best way as she moves forward. “What sets Jo and Mecca apart is their deep understanding of the client, and the consumer-centric approach they deploy across all features of the business,” said Charlotte Tilbury, MBE. “It goes beyond sticking brands on a shelf; the whole lot about Mecca’s identity, from its in-store design to its omnichannel concentrate on education, ladders as much as the concept of democratizing beauty for each customer.”

Jo Horgan

Jo Horgan

Josh Robenstone/WWD

Here, as she prepares for the following phase of growth, Horgan reflects on Mecca’s role in the wonder landscape — and her plans for what’s next.

How does it feel to rejoice 25 years in business?

Jo Horgan: Amazing. Especially because in the course of the first 12 months, I kept pondering of the statistic that nine out of 10 businesses fail in 12 months one, so I knew I had higher be pretty focused on how I differentiated myself from the common. It’s incredibly exciting and exhilarating and barely astonishing to look back on an action-packed 25 years of events, activities and incredible milestones. It’s the memories of the people I’ve done this with, how we’ve built it together and celebrated the highs and huddled in the course of the lows which have made it incredible to date. And I do say to date, because I’m now the following 25-year horizon and knowing what’s possible gives me enormous confidence for what Mecca can achieve in the following 25, with all the learnings and brand relationships we have now, and with the ambition, grit and determination that we have now to redefine the best way beauty is presented to consumers.

What’s your assessment of the worldwide beauty business today and Mecca’s place in it?

J.H.: The business is just as exciting and exhilarating a ride as Mecca. It’s ever changing, ever innovating. Should you take a look at 25 years ago versus now, the retail landscape has totally modified, the brand offer and category offers have multiplied out of sight, the players have diversified. Today, the client is all-ruling. And the best way customers interact with beauty has fundamentally shifted. They will access all information and all products, so retail is polarizing into either transactional convenience or absolute human connection, personalization and community. Those are the 2 extremes that can prevail into the long run.

The opposite exciting thing is that beauty was color, skin and fragrance, and that has not only expanded into hair and body, but into health and wellness in a broad ranging and comprehensive way. That’s also going to revolutionize the industry.

What has enabled Mecca to be so successful?

J.H.: Mecca has been left alone in a corner of the globe, out of sight, out of mind, to essentially do what it must do and desires to do. Because of this, we’ve been in a position to construct a completely customer obsessed proposition from the outset and have been in a position to provide you with a totally unique brand management model. We see our role as acting as a lightning rod, where we take the brand DNA and deliver it on to customers, and since we see ourselves as absolutely liable for constructing each the brand equity and the sales performance, we’ve been in a position to achieve this to this ever-growing and captive audience. We’ve crafted a globally unique model that’s proven where it’s equal parts customer obsession, brand service and team engagement. Would we have now been in a position to do this if we were under the attention of everybody? I don’t know.

What percentage of the brands you sell do you act because the local affiliate for?

J.H.: Nearly 95 percent of our sales are done with brands which are exclusive and sit within the Mecca brand management model.

It’s a winning formula for the brands, for purchasers, for the team. Many brands have the next brand rating on this market than they do in some other market on this planet, including their home market.

We even have, without query, the world’s most educated team. We spend over 4 percent of our turnover on education and engagement. A latest team member gets over 200 hours of education of their first 12 months. Ongoing team members receive about 80 hours to 100 hours.

Mecca spends 4 percent of its turnover on staff education.

Esteban La Tessa

There are other ways by which we spend money on our teams. We take a look at them as an entire — how can we educate them to be one of the best versions of themselves. That features financial literacy, positive psychology, health and wellness. We bring our managers and sales team together twice a 12 months and get extraordinary speakers, like Julia Gillard, Australia’s only female prime minister. Lots of them are running businesses that could be $5 million, $10 million, $50 million doors. They’re running larger businesses than most managing directors in Australia and it’s our responsibility to organize them for that and ensure they are going to thrive.

Was education all the time a key a part of your strategy?

J.H.: After we opened our first store, we had a two-week education session for the three team members in my front front room. I used to do education sessions for 2 hours every second Tuesday night. I passionately believed that the flexibility to bring human know-how, empathy and connection to each interaction was what brought products to life. I all the time tell the team, a lipstick is a lipstick is a lipstick until you breathe life, hopes and dreams into it. That’s telling the story of the founder, of why they got here up with that name, who’s used the product on the runway, use it. That’s what makes you’re feeling like one million dollars while you put it on. The connection.

How has your vision of what Mecca is/might be evolved during the last 20 years?

J.H.: I look back and on the one hand, the vision seemed so lofty that I’m going, “What was I pondering?” The vision was to revolutionize the wonder industry and switch the best way customers interact with beauty on its head. The opposite side was a little bit more realistic: to have 10 stores doing $30 million in sales throughout the first five years. We verbalized our vision and purpose very early on. Our big hairy audacious goal was to be Australia and Latest Zealand’s number-one beauty destination whatever it takes. Our purpose — why we roll off the bed and select this one thing to do above all other life selections — was to make people look, feel and be their best.

Now that you just’ve achieved the goal to be the largest in ANZ, what’s next?

J.H.: To mark our twenty fifth, we went to see Jim Collins, the writer of “Good to Great,” because I’ve been an absolute devotee since I first read his book in 2003. Our goal was to kick the tires and test our BHAG for the following 25 years — is it right, is it realistic, how can we get there, do we have now the suitable business model, the suitable approach?

Jo Horgan

Jo Horgan

Josh Robenstone/WWD

Our goal for the following 25 years is to be the world’s most loved beauty destination. One thing we’ve learned is that in case your customers absolutely love what you do and the way you make them appear and feel, that in the event that they need to be a part of that community, you’ll prevail, regardless of what.

Define “world” on this context.

J.H.: It was each exhilarating and barely daunting to have the magnifying glass on the map of the world, to go from hovering over Australia and Latest Zealand and to step back and back and back, and go — wow, the world is a giant place.

What does that mean for us? It means we’d like to border our approach in another way and say — if we have now a suggestion that appeals to customers and that customers love, which appears to be the case, then it’s our responsibility to take that more broadly.

How will you approach narrowing down markets?

J.H.: We’ve all the time tried to shoot bullets before firing cannonballs, test and trial, make small bets before really going for it. That might be our approach. We’ve done that in China, with cross-border commerce, and that has been illuminating.

We launched in August 2020, in the course of the pandemic, and have learned some super useful things. You have to have Chinese nationals running the business and we do.  You have to have boots on the bottom to know the market.

What hasn’t worked isn’t with the ability to visit and to speed up the plans at the speed we would love to, and having really lumpy data attributable to all the COVID-19 restrictions.

Are you Europe and the U.S.?

J.H.: Europe is a thriving market and we might clearly have to think about it together with other markets and that’s the phase we’re in. We feel we have now an idea that resonates incredibly strongly with customers and that drives brand equity and performance.

The U.S. is an unlimited market and a holy grail market and so many brands make the pilgrimage and the road is suffering from those that have faltered and failed, since it is extremely competitive. As we glance to see where we launch, we’ll attempt to ensure we decide environments by which we have now the best confidence by which they are going to thrive.

Right away we’re on the lucky stage of wonderful open horizons for our dreams, hopes and aspirations to fly so we will find the fertile ground inside which they’ll land.

Mecca has some strong brands of its own. Do you see these as step one to conquering other markets by raising brand awareness?

J.H.: Our entire focus is customer-centric and our owned brands have been built to fill gaps that we don’t feel we will fill otherwise. Our signature line was originally built so we could do manicures and pedicures, and have product that we could get in bulk that matched at a back-bar level the kind of product we were offering in our cosmetics realm. We then moved into sun care, since it is so highly regulated in Australia, and it built from there.

Mecca Max was also a transparent need. We had a young aspirational customer who desired to participate with Mecca and the worth points weren’t accessible enough. We were clear we didn’t need to cannibalize existing business, which we haven’t. It is definitely the number-one customer recruiter into Mecca and a really different customer profile. Our ability to trade them into Mecca’s broader offers has been one other silent winning lever.

Mecca’s sun-care line has been a win.

Have they got legs internationally?

J.H.: I prefer to think if we put our minds to creating product that’s worthy of our customers, we might must set ourselves a normal that it could be worthy of consumers anywhere.

Are they a vital a part of the strategy for global differentiation? As we’re within the strategy of pondering what we must always do, anything that differentiates us is a lever.

Our intention has never been to make the signature lines enormous powerhouses when it comes to sales and share. It has all the time been to be additive to our global portfolio that gives one of the best in beauty. Our role is to ensure our customers have the whole lot they need for a comprehensive shopping experience.

So constructing and driving our signature line business has not been a priority. Keeping our brands and customers completely happy is the priority.

How would the affiliate model work on a global level?

J.H.: We’ve got to throw the whole lot up into the air and work out what our strongest levers are. I feel our strongest levers are our obsession with the client, our ability to construct an awfully knowledgeable and engaged team who provide a totally differentiated experience and to offer a shopping environment that feels more like a house interior that you just would like to hand around in versus a transactional retail environment.

How do you consider the role of the shop today?

J.H.: I feel retail goes to go further to seamless transaction on the one end and absolutely completely experiential on the opposite. Mecca sees its role as providing a highly engaging, multiple touchpoint experience that’s personalized to every customer in store.

Yes, after all a customer can run in and self-navigate and process it quickly and so they can do it through click-and-collect or limitless aisle or use their app. But every business has to have a soul and know what it might probably absolutely excel in, and for us, it’s providing customers with this all-consuming experience.

How has that been manifested within the Sydney flagship that you just opened during COVID-19?

J.H.: The Sydney store is about 18,000 square feet, thrice the dimensions of our biggest store and nearly eight times the dimensions of our average store. We had to construct it without with the ability to visit it once because we were in lockdown in Melbourne.

We were clear about what we desired to offer. Yes, we wanted the easiest in color and skin and fragrance and hair and body, and we were clear we wanted to tease out the perimeters and say what’s beauty about now? It’s also about health and wellness, about experiences.

Mecca’s Sydney flagship measures 18,000 square feet.

That helped us say — OK, in color, we’re going to haven’t only our entire offer, with big makeup stations on the bottom floor for applications, but we’re going to have our Beauty Lab where 12 people can have half-hour beauty lessons on the hour every hour, just like the Apple Genius bar. We even have a studio on the primary floor where you may have makeup done whilst having your hair and nails done at the identical time.

With skin, we have now semi-private booths, where you may have boosters, half-hour walk-in sessions, but we even have three skincare rooms upstairs, where we do the whole lot from injectibles to dermal therapies to peels. Our customers want the dermatological treatment, they need the product, they need the fast fix.

Based on this, we’re launching MeccaAesthetica as a stand-alone trial in Melbourne. It’s our tackle a dermal clinic, with retail up front, chairs within the front for the shorter treatments and bigger rooms for full derm treatments.

Going back to Sydney, we put hairstyling in and that has grown right into a burgeoning business of its own. With health and wellness, we have now a naturopath who is available in. We had a top spa do a three-month incursion so that they can connect with clients.

We predict beauty can be becoming a really social environment, so we put in a Pommery Champagne bar. Then we said, can we expand this through to jewelry as adornment, so we’re doing piercings, solderings, engraving.

Mecca is becoming more of a gifting environment, so we have now an entire gift bar, where you may select different papers and ribbons and wrappings. We actually tried to think through every way a customer desires to interact with product and types.

Early next 12 months, you’ll open a good larger store that’s 40,000 square feet in Melbourne. What did you learn?

J.H.: In its first 12 months, the Sydney store easily surpassed our goals, and it just shows that for those who give customers what they might not ever know they need, but for those who give them something they love, they are going to follow you. That has given us enormous confidence for Melbourne.

To fill 4,000 square meters successfully you might have to be curious by nature, beauty obsessed, willing to check and trial and willing to go on the market to seek out the wonder truffles and nuggets hidden wherever they might be.

We’re taking an agile approach, because we’re very cognizant that the wonder landscape is ever changing at warp speed — and it’s our job to predict where it’s going and to ensure we will continually adapt and evolve to all the time be ahead of the market.

If you began, the brands were really the differentiator, and now that the distribution landscape is democratized, the experience is.

J.H.: I feel it’s really fascinating. Over time it became clearer and clearer what you might be, what you usually are not, what your customer proposition is and needs to be, what you must double and triple and quadruple down on, and as competition enters a market, it makes you focus much more in your differentiators and the way you create the tightest, most compelling relationship together with your customers.

Transactional retail was never our bag, but over time we have now pushed the boundaries on experiences and our customers have followed us on that march, where 35 percent of our space in the brand new flagships are service-oriented offers, because that’s what our customer wants.

The following piece within the puzzle is that because there are such a lot of brands launching and multiplying, your ability to edit the lineup and your standpoint becomes much more critical, as is your ability to annunciate its differentiating aspects. The precision of knowledge you present and the best way by which you achieve this becomes a critical a part of the curation process.

So, having the brands develop into the baseline of your offer and it’s what you do to bring them to life, the experience, the team, the content and the best way by which you understand your customer and the way sticky you may make your relationship together with your customer, that becomes the differentiator.

The one reason for us to expand more broadly is that if we genuinely imagine we will provide a differentiated and more compelling experience to customers and platform for brands. That’s at the guts of what we obsess about each day.

There’s a lot volatility today in macro terms — the economy, culture, politics, etc. What impact is that this having and the way do you mitigate it?

J.H.: We feel we’ve weathered really significant events to this point — we needed to tap dance through a world financial crisis in 2008 once we were much smaller. We needed to pivot and pivot to the purpose of pirouetting through the pandemic. Because the macro headwinds come to buffet us, if we follow a laser-like focus to listening to our customers, and we’re agile in our response, we’ll look to weather those headwinds.

As you’ve grown, how have you ever maintained that agility?

J.H.: Jim Collins enunciated the spirit of Mecca when he said our mantra is get up, breathe, innovate. It’s so deeply embedded in our DNA that when people join Mecca, they’re barely stunned by the whirling dervish nature of continual evolution and innovation, and the willingness to try various things and the pace that the organization runs at. The downside is it’s more chaotic than other organizations.

Our philosophy is to try many various things in a small way and see what sticks, and once you actually understand, then fire the large cannonball. Certainly one of our mantras is Fail Fast, Fail Forward. We are saying so much that if we’re not failing at things, we’re not pushing ourselves hard enough. We share our failures as a badge of honor of learning, in order that nobody else makes the identical mistake and we will bank it within the knowledge vault of Mecca and it helps inform future tests and trials.

It’s also acknowledging that as you get larger, you do have to bring a more disciplined approach to be certain that innovation stays within the business, so we have now an idea innovation team working across the whole lot from services and repair providers through to categories to totally latest concepts.

Then it comes back to the disciplined march of with the ability to roll it out and execute it effectively across your suite of stores to ensure the innovation touches every customer and sweeps up every brand ultimately, shape and form.

How would you describe your leadership style?

J.H.: One, I attempt to plant a flag as to where I feel all of us should go. Two, I attempt to surround myself with incredible individuals who have the agency to debate whether that’s the suitable flag and once we agree we’re all in, I watch them go forth with profound admiration for what as a team is completed and delivered. The opposite thing is I try and produce an actual sense of optimism and a belief that there’s a way, we just collectively have to seek out it.

I attempt to ensure we have now a very good time on the best way through. Beauty is supposed to be fun and fabulous and empowering. That’s what we’re meant to supply our customers, so if we will’t live that ourselves, what are we doing?

A way of fun runs throughout the culture.

Sometimes I take advantage of the analogy that my role is to act because the ice smoother in the sport of curling. I feel like everyone seems to be on the market attempting to get their stone to hit the goal and my role is literally to shine the ice in front of their stone so madly that, though at times I could be a hot sweaty mess, if I do my job properly their pucks hit the goal.

How has your role within the business modified as its grown? What’s your primary focus today?

J.H.: I even have three “rocks” at any given time. Currently, the primary is Mecca’s culture and that has develop into much more vital coming out of COVID-19, at a time when there’s culture erosion because we could literally not get together for 2 years.

Getting people connected, back into stores and the support center, really deepening the cultural beat of Mecca, ensuring persons are engaged, completely happy, flourishing and thriving, is my first rock.

The second is how does Mecca find a very differentiated approach to digital. How do we alter the sport in digital.

The third is the Bourke Street Melbourne flagship. It’s an unlimited undertaking, due to the dimensions, the quantity of innovation, the number of consumers and the sales that we’re targeting, and, much more importantly, the profound impact it might probably have on our overall portfolio of stores.

What are you digitally?

J.H.: Our mission is to humanize digital. What which means for us is to ingegrate the incredible service our hosts offer in store and work out do this within the digital arena. We also have to integrate digital into the in-store journey, and blur the lines between physical and digital. The last piece is how can we improve the booking journey, the pre- and post-appointment care and make services more personalized.

Because the business continues to grow even larger, do you intend on remaining independent?

J.H.: A real advantage and key differentiator is that we’re independent. During tough times like 2008, we didn’t have to react by reducing investment or cutting staff — we didn’t have quarterly results to report or private equity partners. Those moments allowed us to essentially speed up our stickiness with customers. We also love what we do — it’s exciting and exhilarating and we feel a way of purpose and contribution. That’s pretty irreplaceable.

You’re receiving the Beauty Inc Pete Born Impact Award. What do you’re thinking that your primary impact has been?

J.H.: What I attempt to do day in and day trip is to point out that it is feasible to run a female-empowering business in a positive, upbeat, fun way and exhibit that you just don’t must tackle the normal stereotypes of run a business or lead. You may bring your whole barely flawed, barely zany, barely learning-as-you-go self with all the optimism and joy and curiosity and slight astonishment of where you might be — with you. And you may be all of those things as you are taking this wild, wild ride.

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