Mecca: 20 years and 100 stores later
When beauty entrepreneur Jo Horgan opened her first luxe Mecca store in South Yarra in Melbourne, she aimed to disrupt the cosmetics industry and put the customer at the forefront. It may be more than 20 years later, but Horgan is continuing to innovate her business to this day.
It’s well-known that physical retail is struggling, but you’re opening your 100th store this year. What’s your thinking behind that?
Digital and devices are here to stay, so I’m thinking, “One, how do I plug that into the physical experience and two, how do I ensure the physical experience is adding to the digital experience?”
The great news for us is that from the beginning, 21-and-a-half years ago, it was never about the transaction in our stores. If you think about physical stores back then, it was the only place where you could buy things. Whereas Mecca’s philosophy has always genuinely been about engaging, entertaining and educating anyone who walks through the door.
We’ve been able to build on that concept. And in this new world, for customers to come in-store, it has to feel like they’re walking into something really interesting and fun. They need to feel like they’re getting something out of it that they can’t when they just go online.
Taking that into consideration, we’ve put 30 per cent of store space towards interactive experiences, because the transaction is just a byproduct of that customer engagement.
So we now have the Beauty Lab. You book online for complimentary classes on different topics, then you go into the Lab with a group of six or eight, and a makeup artist or fragrance specialist takes you through the steps. Yes, you can watch it on YouTube, but in these classes, you get to try the product at the same time, there are support team members around and you can talk to your neighbour. There’s an incredible sense of community that builds up – that’s been a lightbulb moment for us in terms of what customers are looking for.
We’ve increased our number of makeup application spaces. We introduced skincare chairs, so you can come in for lessons. And we’ve expanded our roster of services within makeup artistry from 15-minute makeup shots to 45-minute lessons where you can learn everything from full glam to how to do a smoky eye through to when you want a nude lip, what do you do with the rest of your face? How do you get glossy skin? It’s amazing how trends move, so it’s about how our customers can stay up to date.
Then we have beauty play bars where you can just play with products yourself. That’s one thing that we’ve really doubled down on in this age of digital. The second thing we’ve doubled down on is our team members on the floor. They have always been the secret sauce to Mecca. It’s almost counter-intuitive, but we have more than doubled the staff-to-customer ratio versus the industry.
We spend over 2 per cent of our turnover on education, so we make sure our team members are able to truly add to the knowledge that you’ve already gleaned online, because there’s an enormous amount of information out there. Eighty per cent of people research online before coming in-store.
I think the team also truly believes in their purpose and are really committed to making sure the customer has an incredible experience, so they add in humanity, interest and connection. Those things help us enormously.
On top of that, we are continually introducing new things to our product lineup and amplifying what’s exciting. We’re continually putting different items together, and it’s great fun to try them. The thing about makeup is it’s fabulous to try. The thing about skincare is there’s nothing quite like someone else putting it on you.
So I think those things put us in good stead. We’re also super focused on how to make the process as snag-free as possible. And we really work on the operations behind the scenes, so that checkout time is super quick, returns are not a problem at all, and [your product] can be packaged up how you want to make it a truly customised experience.
Last year, you launched a big beauty festival, Meccaland. Paint me a picture of what that was like. It was in a crazy warehouse where Justin Bieber had his after-party in Melbourne. You walked up this alleyway, there was Meccaland paraphernalia everywhere, dancers, and unbelievably loud music.
You came through this curtain of iridescent streamers; you walked into this main space and all the Mecca teams were dancing, cheering and clapping you in.
You’d walk around, and there were all these brand installation areas everywhere. Stila had an enormous glitter globe, where you literally stood there while glitter went around you, like you were in your own instant snow globe.
They created a unique product just for Meccaland. There were samples, and they were talking about the product, and it was fun. Then there was a ball-pit and a glitter unicorn in the Two Faced booth. You walked into a huge space with a massive rainbow and clouds and there was the glitter unicorn. In the YSL space, they had an international guest and they were doing crazy tattoos, and on and on and on.
Then there were fabulous drag queens and [performance art duo] the Huxleys were in pink glitter suits and there was Mecca merch – the caps and the ’80s bomber jackets.
What were some of the insights you gathered from last year’s event?
Last year blew us away – we just could not believe the response to Meccaland.
We sold out the 7000 tickets in 15 minutes, but we could have sold 80,000 tickets – that’s how many people tried to book.
And you thought you could only sell 7000 tickets!
We were really scared! But when the customers got there, they were extraordinarily engaged. They interacted with every aspect of Meccaland – all the different brand installations, the influencers and the interactive and educational workshops we had going on. Ninety-eight per cent of people who came actually transacted.
It was such an exciting time for Mecca because the teams could see how much the customers just loved everything we were doing. It was honestly electric and I think it was a brand-defining moment. If you looked at the stats, one in two women in Australia saw it on social. It had over 70 million impressions the four days it was on. It catapulted Mecca to have the second-highest engagement rates globally in cosmetics. There were so many aspects that worked incredibly well.
Now Meccaland is back for a second year and it’s heading to Sydney this time. This year, we’ve gone, “Right, let’s assume we were on training wheels last year and now we’re ripping them off and going on a super fast motorbike!”
So this year, we’ll have 15,000 people, 50 brands. We’ve got collaborations with Instagram TV and YouTube and we’re going to stream it live. Last year we had five influencers, this year we’ve got 30 local and global influencers. We have the Mecca face-off competition, where customers come in and do their own make-up and get judged. Then we have influencer master classes, then we’ll have panels and probably even a rollerskating rink. There will be different worlds in Meccaland, from Popstar Park and the Queendom, to the City of Lights, The Wildflowers and the Temple of You.
We were globally first to do a beauty festival last year. We were completely blown away by the demand for these interactive experiences and one of the things that was so extraordinary was it gave us confidence that customers really are looking for experiences. Yes, we can provide that at Meccaland, but now we can lift and load that into our stores.
For example, in our second generation of stores, there are Mecca Pop areas, these emerging brand zones, where you can take the idea of Meccaland and put it in-store for a couple of months so customers get to have this crazy fun experience and it works really well.
[To read about this year’s Meccaland, click here.]
There seems to be a huge groundswell of niche beauty brands at the moment. How do you keep up with that?
There’s no question that in the beauty landscape, newness is accelerating and I think it comes from a few different arenas. The major brands and niche brands of yesteryear that have become blockbusters in their own right are investing enormously in research and development. I think those extraordinary technological advances are especially in skincare, but makeup too, which brings great energy and interest.
Then you have these emerging niche brands. I feel Mecca is in a great position, because that’s our heritage. We started with niche brands – and 20 years ago there was a plethora of brands to choose from. It’s about finding the right ones that have that holy grail mix of product performance with a differentiated offer, a great story and a founder who you look at and go, “You know what? I’d back you. I think you could make this work.”
I think digital is fabulous. It’s put control back into the hands of the customer and it’s fantastic that influencers are able to connect so directly with them and create products that talk to them if they so wish. For us, it’s working out which brands have the longevity and which ones will deliver for our customers in terms of product performance.
Our new brands room is just groaning with product but I find that incredibly exhilarating. We have a process where there are 15 beauty scouts across the whole network and we show them new brands that we’re considering and they really bring the customer voice into it. So we take our intuition and customer voice to the beauty scouts and put the two together. I think that’s really powerful.
Do you think of Mecca as an incubator?
I like to think we’re an incubator and beyond. We’re not someone who incubates tiny brands, which then go off into bigger distribution. We see ourselves as being able to pick nascent brands with high potential, then nurture them, put structure around them and make it really easy for them. I think our end-to-end model works incredibly well for them. When we first started, brands didn’t want to come to Australia. We were able to say: “OK, we’ll manage all warehousing and distribution to stores, education of staff, we’ll manage all staffing, we’ll manage all visual merchandising, marketing and we’ll take full responsibility for the brand.”
We’ve been able to lift and load that model for new small brands. These direct-to-customer brands have absolutely mushroomed, the biggest being Kylie Jenner, but there are so many other brands in that space. We started with Frank Body three or four years ago. We were their first retailer globally and able to build a significant business with them. Then other direct-to-consumer brands, which I don’t believe had retail in their plans at that point, saw that. I’m not sure they had put the right structures in place for retail, but by working with them, we were able to bring them into retail in a really successful way and we’re thrilled with the results. Other brands saw that and went, “Tick, let’s follow that path.”
We’re also bringing direct-to-consumer brands into a bricks-and-mortar environment for the first time. That’s a form of incubation and a recognition of what’s going on in the world and how to manage that, prevail and stay ahead.
I know you recently added a male to the Mecca Beauty Junkies team – what prompted this? Are numbers of male consumers increasing?
Diversity in all of its forms is permeating the beauty industry and the fabulous thing for us is there are more men entering the industry, more men willing to express themselves through makeup and more men using skincare.
All of this gives us more talent to access and we’re thrilled to leverage that, as it’s a great win for us and allows us to broaden our audience. There’s not a great representation of older women being targeted at Mecca.
Are your older customers a consideration and how are you speaking to them?
At Mecca, we see ourselves reaching the customer who is purchasing their first lip gloss or skincare cream at 13, right through to 98-year-old men who write in and tells us that they love our products (true story).
I’m 50 and use everything at Mecca. My mother is practically a level 100 Beauty Loop member (if it existed) and I hear her feedback and the feedback of all of my friends every day. We love to recruit women of all ages into Mecca and have introduced a very successful program where we recruit the mothers of our existing store hosts to ensure customers see people of all ages represented in our stores.
Traditionally, retail has attracted a younger transient workforce and at Mecca we’re trying to change that by not only making it a career but also by providing flexibility for women with school-aged children who want to be a part of the workforce. We’re really for everyone right through to grannies.
Mecca has a really loyal, tight-knit community. How have you built that over time?
I think when we started 21 years ago, we had an incredibly clear purpose, which was to make women look and more importantly, feel their best. And so I think the whole Mecca experience has been built around that and our team members feel a real sense of purpose in delivering that. They’re well-educated on product, customer experience and more broadly, life. That means that they’re engaged and fantastic at matching and mirroring the customer. I think secondly, we try to empower the teams to do the wrong thing for the right reason, so every single interaction with the customer ends with him or her being happy, no matter what.
We try to provide a lot of experiences for the customer – that gives Mecca a personality, whether that’s international artists and skincare specialists doing events, master classes at night after stores are closed, beauty lab experiences, Meccaland, or brand installs that are completely different. We really try to bring the stories and brands alive, so we invest heavily in content and content creation, making sure that customers have access to whatever they want to read. And we try to have a unique point of view in terms of what we do and we make it human and real. Our whole goal is to make beauty accessible, not exclusive – we try to make it super-inclusive.
We have our loyalty program, the Loop, which customers just love. It’s super-fascinating. We give Beauty Loop boxes to customers four times a year at different levels, with samples and education around them and they just love them. It’s not just customers who we want to feel and look their best – we want our team to be the best they can be, so education is absolutely critical. We spent 2 per cent on education, which is unheard of in retail. That covers everything from products and the customer experience to self-development and financial independence. We are nothing without extraordinary teams, so we have a very strong recognition program in place that focuses on team achievement and team celebration. All recognition is based on customer feedback and not on failed targets, so I think we measure for the right outcomes. We also have a recognition program through the year based on customer feedback, where there are finalists at every quarter and at the end of the year, four team members travel to all our brands around the world for two weeks and they’re thanked for providing extraordinary customer experience.
Can you tell me about the training and educational opportunities you offer your staff?
I think it helps the business in so many ways. Mecca’s mantra is education, education, education – I’m a believer that education gives you confidence to make decisions, it forces your brain to be quite flexible and helps you to think differently.
There are 11 in our graduate program. Six came from in-store – we want to support the people who are studying at university and working with us. Then five are external graduate hires. We had over 10,000 applications last year and they all worked in-store for a three-month period over Christmas – stores and customers are the beating heart of the business. It’s a two-year program with four rotations across different departments. The hires bring store insight into the business and help cross-pollinate into different departments in a fluid way. They also get ongoing structured development and training, instead of being just thrown in. There’s a structured education piece, plus they get a dedicated senior mentor who will guide them through the process, too.
We really respect this next generation and recognise that they are incredibly high potential talent. We try to provide an environment for them to adjust to that next phase of their working lives so they can really fly and feel great about it. I heard through the grapevine that you once organised a talk for your staff about freezing their eggs.
What was that about?
It was a part of a program called Lunch and Learn that we have every month or two. Anyone, I think, who has a message that can take us on a learning curve is invited to talk to the teams. I ask them lots of questions in an interview [that the team attends] and we all sit down to lunch afterwards. We video them and we put them on the intranet, so everyone can access them. I’ve witnessed so many of my friends not finding their life partner and not having children, then regretting it. I’m just a passionate believer that women have all options in front of them, and if you had the option to have children in another 10-16 years, take [freezing your eggs] as an insurance. I talk about it openly at work. The speakers have been completely diverse. We’ve had everyone from Tony Elwood, the director of the National Gallery of Victoria, and Abigail Disney, an extraordinary documentary filmmaker who focuses on women’s causes, through to Peggy O’Neal, the head of Richmond Football Club.
Tiernan Brady, the head of the Yes vote for marriage equality, also came in a couple of weeks before the referendum and was extraordinary.
You started your career in beauty working for for L’Oréal. What was the beauty retail landscape like back then?
The landscape at that time was like so many areas of life – it seems incredibly simple in retrospect.
It was a landscape clearly dominated by players such as department stores and global brands and houses, and there was a relatively generic approach to marketing and customer communications.
I feel that the brands dominated the department stores – customisation for customers wasn’t available at that point and information wasn’t really accessible. Now, all the power lies where it should – with the customer.
Now the customer has access to all the information she needs, all the application techniques she may wish to explore and whatever takes her fancy. She has all the access to product globally and she makes decisions of what she’s using and why.
Fast forward 20 years and digital means that customers can access all product information, all trend information, all ingredient information and a plethora of applications and techniques.
They can create their own communities for everything as broad as people who just love bronzing or wearing guyliner, right through to people who love the latest in Korean skincare, or transgender makeup or men who wear makeup. These smaller representations weren’t catered to in the generic dialogue of yesteryear.
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