Urban Decay seeks a Director of Digital (Newport Beach, CA)

In its 17 year life, Urban Decay has been owned by LV MH (2000), the duty-free company Falic Group (2002), as well as my private equity friends at Castanea Partners (2009), who sold the firm last December to L’Oreal for $300-400 million, according to Dow Jones Global Equities News sources.

With more than 100 years experience, L’Oreal (who’s getting deadly serious about ecommerce) is one of the world’s leading beauty companies with a portfolio of 27 complementary brands. With sales exceeding €20 billion in 2011, L’Oreal employees nearly 70,000 people worldwide.

According to L’Oréal’s president, Nicolas Hieronimus, “Urban Decay will beautifully complement L’Oréal Luxe’s portfolio of iconic brands. It is totally additional to our existing propositions and as such it will contribute significantly to the growth of the division in the years to come.” Given L’Oreal’s industry knowledge, distribution network, purchasing power, and human plus financial resources, Urban Decay’s best days lie ahead of it.

According to the Personal Care Products Council, the US personal care products manufacturing industry includes about 800 companies with combined annual revenue of about $41 billion. Cosmetics account for roughly 35% of that number. The industry is concentrated: the 50 largest firms account for about 85 percent of industry revenue.

The cosmetic retail space is nearly as concentrated, with the top 50 companies controlling 75% of the $11 billion that flow through America’s 13,000 cosmetics stores. Major competitors include department stores, mass merchandisers, drug stores, TV shopping networks, Internet retailers, distributors, supermarkets, manufacturers, and salons. In addition, some beauty stores compete with dermatologists and plastic surgeons in the high-end market for cosmetics and skin care.

Urban Decay’s digital initiatives have been on the right track ever since we placed the firm’s current AVP, Digital, Katherine LaFranchise, in the role in 2010. Under Katherine’s stewardship, Urban Decay’s online revenues have grown at a healthy clip of 44% per year for the last three years!

Urban Decay’s online clientele can be segmented into in three primary personas, one of which spends north of $800 per year on makeup and is in tune with the latest styles and experiments with new looks on a weekly basis. The good news is that she can be extraordinarily brand loyal, but the challenge for UrbanDecay.com is that this customer is also channel agnostic: She’s less particular about through which Urban Decay channel she buys, so long as the sales process helps her discover new things about the brand — and herself.

The major issues for UrbanDecay.com are 1.) How can management use digital to grow Urban Decay’s overall business? and 2.) How can the site increase its share of the customer’s wallet in a way that’s pie-enlarging, not pie-rearranging? According to Katherine, “We’re preparing to launch exclusive products available only on UrbanDecay.com, and once we ramp up our CRM initiatives, we plan on developing innovative programs to reward different customers differently.

This delicate trade-off has required Urban Decay to think differently about how it evaluates success: Until Katherine arrived, Urban Decay was only ROI-driven in its online marketing. Today, even though UD meticulously tracks its marketing ROI’s, the firm is balancing those ROI targets with “softer” indicators of success. According to Katherine, “We strive to integrate branding initiatives in a smart way, while still delivering ROI on other key initiatives such that the blended ROI makes financial sense.”

For starters, Urban Decay’s new Director of Digital can plan on working with the company’s vendors to examine customer biases and develop insights about the brand’s most meaningful customer segments. Next, the new Director will be challenged to develop triggered, sequenced e-mail campaigns that sell to different customers differently – the way these customers want to buy.

Of course, such an initiative would involve the integration of CRM, e-mail, mobile, and personalization technologies, and it would require the new Director to bring an analytical bias to the way they evaluate these things. This isn’t just about creating harder hitting e-mails. It’s about making sure that Urban Decay gets smarter about every customer’s needs and values every time the customer touches the organization – regardless of where that customer touch occurs.

I seem to be saying this a lot lately: We are looking for a business person. Katherine and I seek a Director who has led a team and managed a P&L. We want someone who has a teachable point of view on online retail KPI’s and can debate the relative strengths and limitations of traditional online KPI analysis. This would require you to understand cost drivers and revenue drivers as well as the mechanics of an integrated supply chain in a highly branded consumer retail category.

We’re looking for someone who can negotiate skillfully with internal and external resources as well as “sell” (both up and down the organization) the hard and soft benefits of a highly integrated omnichannel ecommerce piece. We’re looking for a builder; of people, of teams, and of businesses. If that’s you, then we’d love for you to apply below.