Beauty Store Business

SEP 2017

Beauty Store Business provides solutions for better retailing! New products, industry news, savvy business moves and important trends affecting both brick-and-mortar and online retailers are included in each issue.

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Page 7 of 75

6 September 2017 | Kim Henderson, Executive Editor "If you overdeliver to your customer, you'll get the retention that you're looking for." —Earvin "Magic" Johnson Magic's Business Play hen I read that Magic Johnson would speak at the Professional Beauty Association's Business Forum breakfast at Cosmoprof North America (CPNA) in July, I wondered what a retired NBA player would have to share with a room full of beauty industry pro- fessionals. Little did I know that along with dreaming to be a professional basket- ball player as a young boy, Johnson also dreamed of one day becoming a successful business man. And that he has become. Roughly 20 years ago, he founded Magic Johnson Enterprises, an investment conglomerate that funds ventures and partnerships in underserved urban markets and is valued at $1 billion. Engaging, charismatic and relaxed, from the moment Johnson began talking, he had pretty much the entire room in the palm of his hand—including me. As he wove his way through the crowd of roughly 600, occasionally taking selfies with fans, he delivered a distilled message that every beauty retailer should know: His success, he said, comes from first knowing what his customer wants; and then second, overdelivering on it. "If you overdeliver to your customer, you'll get the retention that you're looking for," he explained. He referred to his experience creating a 50/50 partnership with the Starbucks Corporation called Urban Coffee Opportu- nities. It started with a conversation he had with former Starbucks CEO Howard Schultz. Johnson believed that underserved, urban multicultural communities liked coffee too. And he convinced Schultz to open stores in these areas. He suggested a few changes to serve his customer specifically. Among other changes, he replaced scones with sweet potato pie and peach cobbler—and switched the music to R&B artists like Michael Jackson and Earth, Wind & Fire. It worked. In all, the partnership opened more than 100 stores that turned greater than average profits. In 2010, Magic Johnson Enterprises sold back its ownership to the Starbucks Corporation for $100 mil- lion. What's more, the Starbucks stores in the Harlem area of New York City, the Bronzeville area of Chicago and the Cren- shaw district of Los Angeles all fostered lasting redevelopment. Johnson's simple, but powerful business "play" worked. He found an opportunity in underserved com- munities. He understood the specific needs of his customers. And, he overdelivered to the customer. Today, as co-owner of the Dodgers, he's applying similar principles with excellent results. Following the inspiring talk, our team spent three days scouring the Cosmoprof floor, taking note of new and exciting products. The result? Our fantastic CPNA product guide starting on page 46! As it was my first Cosmoprof, it was thrilling to see so many brands, connect with the good people behind them and have the opportu- nity to see all the beauty industry's market segments in one place. If you attended, we may have caught you on camera. Catch our CPNA photos on page 12. ■ EditorÕs Note

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