Had a glitch earlier, let's do this again! Estée Lauder CSO on why consumer activism matters in redefining retail

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In episode one, we’re joined by Nancy Mahon, CSO at Estée Lauder Companies, to explore the fusion of beauty, sustainability, and community engagement.

Discover how initiatives like the iconic Viva Glam and Back to Mac reflect Estée Lauder Companies commitment to social impact and consumer activism. Learn about their sustainability goals, from greener packaging to responsible sourcing, and how they leverage their scale for positive change. 

Nancy reveals the strategies for collaborating with stakeholders and suppliers to implement sustainable practices and discusses the importance of education, partnerships, and iteration.

This episode will provide insights into investor responses and the importance of corporate transparency in the quest to become a greener company. “Purpose” isn't just a buzzword for Estée Lauder Companies but a guiding principle shaping the landscape of retail and sustainability.

In conversation with Nancy Mahon

This transcript has been edited lightly for clarity.

Keesa Schreane: I am so excited today to have our guest, Nancy Mahon, the Chief Sustainability Officer at Estée Lauder Companies. She serves on the CEO's executive leadership team and on the Estée Lauder Companies (ELC)—we'll refer to the company as ELC from here on out—their inclusion and diversity council. Nancy, welcome to the show.

Nancy Mahon: I'm glad to be here. As we talked earlier right before the show, I'm a big data nerd. The field that you focus on is so important and moving so quickly, so excited to be here.

Keesa Schreane: Absolutely great. We are clearly in the same community; this is fantastic. I want to start off with one interesting thing. and preparing for the interview, Nancy, I didn't realize how many companies that Estée Lauder Companies was the umbrella for so many brands. MAC is one of them. I can remember years ago, there was a really cool Viva Glam campaign that featured Mary J. Blige, Lil' Kim, and Elton John. It was just amazing. You really saw it everywhere. Seeing hip-hop legends and being a black woman, seeing black women being such a huge part of a campaign, really spoke volumes. I want to start off with that campaign because I think a lot of folks recall that and saw the impact that it made. Talk to us about Viva Glam as a social impact use case. What were the KPIs and did you all manage to meet those in the campaign?

Nancy Mahon: I think, in many ways, Viva Glam is one of the OG purpose-cause campaigns in the industry. What was great is I was lucky enough to lead that campaign for 10 years, and the beauty of it was that it was really part of the commercial model. I think one of the exciting things about purpose in consumer goods companies and for-profits is that we're able to, I think, in a creative way, grow the business as well as grow the good work. I spent a lot of time in private foundations and also in nonprofits. If you do the math, we are never going to resolve the world's biggest problems without companies really being at the table. What's great about the MAC Viva Glam concept, which I'm sure you know 100% of the selling price of one of their products, Viva Glam, goes to support HIV and AIDS and also women and girls now, the purpose has expanded.

What was great about the model was it was really born as MAC was born, and the idea was that they wanted to give back to the community. Particularly in those days, sadly, many of the professional makeup artists were drag queens. Many of them were gay folks, and many of them had gay allies. At the time, the epidemic was really ravaging the people who built the brand and the people who patronized the brand and supported the brand. The idea was, hey, we can grow this great brand at the same time that we can do good in the world. Why the model was really brilliant was 100% is very clear. We spent a lot of time thinking now, particularly in retrospect, on a go-forward basis, how does purpose show up at retail? One of the things we see again and again is that consumers care that we care.

They might not necessarily pick that cause to give the money to, but if you are being transparent about the cause that you're giving to and they can see their direct impact, they will definitely participate. What was great is as that brand grew, the cause grew, and the brilliance also of the model, as you mentioned, is it wasn't gloom and doom. Honestly, it was joy, it was sex, it was fun. We used makeup artists, we used at the time, mostly singers. What we found was that Grammy winners and various singers showed up and did the things that their bands and their great singers recommended that they do, so they had huge fans. That was a way that we could propel new people into the store, and we were able to attract them. We were also able to track who is the Viva Glam consumer.

What we found was that consumers bought a lot of stuff, were super loyal, and came back a lot. When they came back, the size of their, what we call the basket, was bigger. We also, at the same time had a companion program called Back to MAC, which was essentially kind of a recycling program, a reclamation program, which was also a loyalty program. Because essentially, if you had six empties, you would come back, and you would get something for free. A lot of what we do here is really thinking about how we grow purpose, how we create purpose, and how we take purpose that is already ingrained in the brand and grow it. The bottom line is that the law of supply and demand states that you can buy lipstick anywhere. You want a great color, you want great quality, and you want to believe in the brand. For talent, you can work anywhere you want to work. Why work with us?

That was a couple of the pieces, and it was really a great joy. I always say I'm actually a lawyer by training, but I feel like I got my MBA at MAC because I understood that if we only sold Viva Glam, we were going to go out of business. We had to sell Viva Glam Plus. In those days, and then still now, they do what is called face charts, which is if you get your makeup done, I don't know if you've ever had that experience, but sometimes you go get your makeup done, and you walk out, and you're like, "Damn, I don't really remember exactly what they used where." The face chart is where they, as they're doing your makeup, put down what products they're using. For lipstick, you can also sell a lip liner, you could sell a gloss, you could sell a conditioner, and then that way, you can kind of reconstruct your own look.

I'm never quite as good as a professional makeup artist, but it was a real pleasure. In fact, at one point, the folks from Red came to visit us and said, "We want to expand this model to other categories." We're like, "Great, go for it." We're in the lipstick lane, and we're good at that. It was an incredible way to learn about purpose. Also, I think what I loved about it was it was very democratic. It's like a form of consumer activism. If you're buying a purpose product, you're making a statement. We've seen again and again that incrementally, consumers are willing to pay more when purpose shows up and when their funds go to good causes. We've also, which has been great, is we've now brought that work to a lot of our portfolio brands. Our brand, Origins, does a lot of great work around water. La Mer does a lot of ocean and ocean cleanup based upon their great ingredients of kelp. Bobbi Brown has been focusing on women's empowerment. We really are focusing on how purpose shows up at retail and how we power the brand and power the good work.

Keesa Schreane: One thing that I keep hearing from you, and this is really fantastic, is about consumer, consumer-centric consumers. We gave the consumer a voice here. I want to hear from you, what are consumers? Have you been talking to consumers since that point up until now about sustainability more broadly? What has been the sentiment? What are you hearing? Talk to us about the evolution from what you heard then to what you heard now and how that might play out in other areas of the business.

Nancy Mahon: We partner very closely with our Consumer Insights Division. We have a whole team of folks at Lauder who specialize in that. What we've done is we've worked with them to essentially mainstream purpose questions as well as questions around sustainability. Also, I think our consumers are also consumers of their investors. What we've seen is as women and young people have become more and more investors and also, obviously, consumers, we see they want to express their values in the products that they buy. We see a big uptake around Viva Glam. What we do see, for instance though, is people are not going to buy a product that they don't like because it's a purpose product.