Estee Lauder's holiday tactic: good things in smaller packages

Every TV talking head and soundbite economist out there has a bet on when the economy will rebound, and their guesses run the gamut from sun-coming-soon to apocalypse-now.

One executive who isn't placing any wagers is Estee Lauder's COO, Fabrizio Freda. After getting burned during retail's atrocious holiday last year, Freda is already girding for this year's gift-giving season. His plan? Keep giving customers the cosmetics and fragrances they know and love. Just give them -- and charge them -- a little less. The company will offer new, downsized portions of fragrances like Clinique Happy. Happy is regularly sold in a 3.4-oz. bottle -- by November, 1.7-oz. and 1-oz. versions will be on shelves, too.

It's a winning strategy, especially in an industry where so much is illusion. Freda didn't offer any sketches with his brainstorm, but imagine how many things a beauty company can do to make a little look like a lot. Thicken the glass of a perfume bottle by a millimeter or two; shorten the container and put a little more height on the plastic cap; tweak the design to make the bottle's curves a little less generous. I'm sure the smaller versions of the products will be carefully rendered to ensure that no consumer feels cheated at the counter (and that no gift recipient feels gypped when they open it).

No matter how the end product turns out, the idea is a meaningful step toward realism -- and I hope it's indicative of some reflection going on in the fragrance industry, which is in serious need of a shakeup (okay, maybe not compared to the auto industry, but perfume is still important!).

I've long bemoaned fragrance's evolution away from its classic model, in which iconic perfumes were actually defined by their scent, their era, and the women who wore them, famous and not -- i.e., everyone knows that Marilyn Monroe wore Chanel No. 5 to bed, and I know that anything my grandmother ever touched gave off delicious traces of Estee Lauder's Cinnabar.

Today, a fragrance isn't finished until its marketing team has locked up a celebrity who gets paid to put it on and pose in ads. Then there's the spawning thing. Instead of coming up with new, innovative scents, big fragrance companies riff on an existing one ad nauseam, hoping that the common notes and established brand identity will hold up through one more version. Consider Estee Lauder's Pleasures, which gave way to Pleasures Delight, Pleasures Exotic and Pleasures Intense. It dilutes the original scent's brand identity, and, let's face it -- no one wants to feel like they're wearing a spinoff.

Most importantly, reverting to the classic model would save these companies cash in the long run. Why waste money recycling an ad campaign for another Pleasures? And you don't need splashy celebrity endorsements to sell out a fragrance. Remember CK One? It had the most minimalist packaging and promotion of all time -- and everyone (including me) had to have it.

Freda's idea puts Estee Lauder ahead of the game for what could be another disappointing holiday season. But trust me, Fabrizio. Revamp the way the world sees fragrance, and you'll be rewarded -- even when the economy is smelling sweeter once again.
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