Aside from the clear distinction of the brand in the minds of consumers and beauty moguls around the world, what exactly has contributed to the billion-dollar success of MAC Cosmetics over the years—and will the standout brand be able to keep up with their competition?
That’s the question we will seek to answer over the course of this growth study. Follow along as we cover all things MAC Cosmetics.
To start, let’s give some kudos to the brand for its overwhelmingly successful accomplishments. In just 37 years, the luxury cosmetic company went from home kitchen manufacturing to global sensation.
Key Growth Statistics for MAC Cosmetics:
- Available in 105 Countries
- 10,836 employees
- Can be Purchased in 1500 Different Locations
- Houses 500 Independent Stores
- Has a 3 Billion Dollar Net Worth
- Generously Donated $500 Million to Aids Research
- Top Ranked Prestige Makeup Brand in US
- Reported to Have Hit $1 Billion in Annual Revenue
How a Gap in the Market Led to the Birth of Brand
The Two Franks
Way back in the late 1900’s, a photographer/makeup artist and a hair salon owner were becoming frustrated with the cosmetic products on the market and how they were affecting their businesses. Frank Toskan, a Canadian photographer, realized there was a distinct need for makeup products that photographed well. Frank took his concern to his friend, Frank Angelo, and the two began to manifest what would later become MAC Cosmetics.
Along with the lack of quality in products, both men felt that the makeup industry excluded members of the lesbian/gay communities. Part of the community themselves, they sought to create products that were fun for artists and inclusive to all demographics. This idea bore the first MAC product, created “in house” and with spirit and creativity as the driving force.
Kitchen Cosmetics Are All the Rage
Picture this. You’re in Toronto. It’s the eighties. Style is bold. Makeup falls flat. Your name is Frank. You believe in beautiful lipstick.
This is essentially the beginning of MAC Cosmetics. Frank and Frank got together and began to craft pigmented lipstick shades inspired by a pink crayola crayon, right in their kitchen. The initial intention was to make products for the models that Toskan would then use on the models he photographed. Word quickly began to spread and soon that one pink lipstick was accompanied by a full brightly colored lipstick line.
Frank and Frank were selling their products at Angelo’s salon, to family and friends, and to word of mouth referrals when they decided to open a storefront of their own. In 1984, MAC Cosmetics officially entered the beauty market from a Toronto department store counter with the tagline “All Races. All Ages. All Sexes.”
Already ahead of society in inclusivity, Angelo and Toskan were making huge strides for the LGBTQA+ community to blossom into the beautiful and proud community that it is today. Inspired by their message and encompassed by their product pigmentation, customer interest was piqued.
Madonna Dons MAC & The Rest is History
MAC got its first big success when Madonna wore one of the company’s signature lipsticks in a modeling ad in the late 80s. Having fallen in love with the brand, the popstar and the beauty newbie created a signature lipstick for Madonna’s Blonde Ambition tour in 1990.
The gurus (Franks) at MAC created a shade for Madonna called “Russian Red,” gaining the brand massive recognition, popularity, and demand for this key lipstick color.
Just one year later, MAC launched their first American store in New York City. The location and time of the New York launch contributed greatly to the further success and brand recognition of MAC Cosmetics. Located on Gay Street in New York, during the AIDS epidimic, the MAC store became a hub for artists and individuals. At MAC, people from all walks of life were welcome and their bright and outwardly accepting nature drew many people to the brand. Bold personalities, creative artists, and drag queens were all intrigued by the freshness that MAC was bringing to the beauty industry.
Key Takeaways— Go Bold or Go Home. Go Forth and Inspire.
Frank Angelo and Frank Toskan’s longing for better products to support their craft led to the creation of a brand that had never existed in the market before. MAC began to bring fun and creativity to makeup that provided eclectic individuals with an outlet to express themselves through beauty creations.
Knowing what we know about the beauty industry, it becomes clear that MAC set the stage for the bold beauty practices that are widely practiced today.
Approaching the Cosmetic Market in a Way That Had Never Been Done Before
Coming in Hot
Because of the nature of MAC Cosmetics, the Franks knew that the packaging had to be as stand out as the products themselves. Initially sold in black containers instead of the typical compacts, it was clear to anyone that looked at the brand that this product was something different. Beneath the chic packaging, the brand would unveil products that were so bold and beautiful, stage makeup of the day could not compete.
It was clear that MAC was not a typical beauty brand. The company did not position itself as a skin care brand, nor did it claim to provide a natural aesthetic. What MAC was however, and would continue to grow to be, was the color authority of the 1990’s beauty industry.
This trend in beauty suddenly took makeup as an art form for the creatively employed to an art form for anyone that felt compelled to make it so. The statement options MAC offered resonated highly with figures in pop culture, industry professionals, and day-to-day customers who were just looking for something different.
MAC delivered. And they continued to deliver, continuously creating more color options, product offerings, and an unseen culture in the beauty community.
Representation
From the beginning, the brand has been an LGBTQA+ powerhouse, creating space for communities that had previously had little representation. Both members of the community themselves, the Franks felt that inclusivity was incredibly important and was the basis of the entire MAC brand.
As MAC thrived in New York, alongside the AIDS epidemic, the company felt a driving need to do what they could to raise awareness around HIV and provide funding for research. Couple the founder’s life experience with the situational occurrences and suddenly a new realm of MAC was born—Viva Glam.
A Philanthropic Launch
In 1994, Viva Glam was launched to raise awareness and funds to fight the raging AIDS epidemic. In true MAC fashion, the brand launched a bright blue lipstick graphic named “Viva Glam” and committed to donating 100% of sales to the newly established MAC AIDS Fund. This bold move in the industry attracted the attention of stars, community spokespersons, and fashion magazines alike.
The company’s commitment to a philanthropic fight against the spread of HIV led to more heightened brand awareness, high-profile opportunities, and overall good PR. By 1995, fashion designers like Marc Jacobs and Vivienne Westwood were creating looks around Viva Glam in an effort to contribute to the cause and stand behind a brand that was doing good in the world. With their effort, Viva Glam Couture Color was born and MAC became a high-fashion, magazine-featured, luxury makeup brand.
We see this trend in philanthropic business practices today, resonating just as well as consumers are becoming more cognizant of where their money goes. In the 2020’s, business practices widely emulate strategies similar to Viva Glam, where a business is able to donate to the causes dear to their market and receive favorable reviews in return.
26 years later, Viva Glam is still a long-running and successful endeavor by MAC Cosmetics and continues to attract the attention of and garnish the support of highly influential people in pop culture.
Key Takeaways— Authentic Generosity Prevails.
MACs commitment to artistry and giving back positioned them for the national attention they would soon receive. Individuals from all walks of life and varying interests in beauty could resonate with the brand. MAC stood out from its competitors, appealed to a new demographic, and had fun with makeup for a good cause.
The company’s overwhelmingly unique approach to beauty began to light fires of inspiration across the nation and the beauty industry began to take on a new meaning, with new customers—just in time for the turn of the century.
MAC Cosmetics is Bought by Estee Lauder & The Industry Growth Continues
Boutique Brand to Household Name
Shortly before the launch of Viva Glam, beauty company Estee Lauder purchased 51% of MAC Cosmetics to widen the conglomerate's brand portfolio. Estee Lauder was looking for a range of companies that would appeal to segmented demographics and MAC was the perfect fit to grow the conglomerate’s customer base to include makeup artists.
With the launch of the Viva Glam campaign, MAC Cosmetics (partnered with Estee Lauder) leaned heavily into their unintentional marketing technique of celebrity endorsements. However, this was not meant for marketing and the 100% donation proceeds were done strictly out of good will. RuPaul, the affluent drag queen, became the spokesperson for Viva Glam before drag was a widespread notion. It could be argued that MAC Cosmetics provided a considerable platform to the LGBTQA+ community amidst a conservative America and gave wave to a movement of acceptance and social enlightenment. This empowered and bold approach would lay the foundation of Viva Glam campaigns for the following three decades.
After the first launch of Viva Glam, the incredible reception, and many endorsements by influential people, Estee Lauder went public the following year, giving MAC and other Lauder brands the developmental edge needed to expand across the globe.
Tragedy Strike MAC Cosmetics
Focusing on no other advertising, the company continued to grow through word of mouth and strategic partnerships under the direction of the Franks. Sadly, just three years after the success of Viva Glam in 1994, MAC Cosmetics would experience a complete and unforeseen shift in leadership.
In January of 1997, MAC co-founder, Frank Angelo, experienced complications following a surgery and tragically passed away at the age of 49. He was largely credited for being the driving force for enlisting RuPaul as the Viva Glam spokesperson. At the time of his death, the collection had raised $5.5 million dollars for AIDS assistance and would continue to add millions of dollars to this number each year that followed.
Following the death of Angelo in 1997, Estee Lauder acquired 100% of MAC Cosmetics for an estimated $60 million and the remaining co-founder, Frank Toskan, stepped down as chairman of the company. While Toskan stepped away from the day to day operations of the company and began to focus on other ventures, he remained a part of the MAC AIDS Fund.
Young & Eager Leadership
With the original founders of MAC Cosmetics no longer making the decisions for the trendy and elite makeup brand, Estee Lauder had to place someone in the position. Looking for edge, drive, and aspirations, Estee Lauder would ultimately land on a leader that would take MAC Cosmetics so far into the 21st Century and around the globe that the brand would be standing strong 20 years into the future.
After Toskan’s resignation, MAC Cosmetics was spearheaded by Estee Lauder’s own John Demsey. Under John Demsey’s leadership, the company would stay true to its brand personality and lean even harder into its unorthodox approach. Gaining the opportunity to fully showcase his ability for creative direction and brand intuition, Demsey would put everything he had into MAC to ensure the company was the pigment and fashion cosmetics leader of the industry.
Very “green” in product development and with no experience in global business, Demsey made years of integral business decisions that would grow MAC and Estee Lauder incredibly. He claims the lessons he learned as a young executive running MAC gave him the knowledge and brand development tactics that he has applied to every Estee Lauder brand under his direction since. Following his experience and success with MAC, he would go on to be credited for the success of Tom Ford, Smashbox, Clinique, and other wildly fortunate Lauder brands.
Headquartering In New York
When Demsey took over MAC Cosmetics, MAC was still primarily based in Toronto. Demsey made the decision to leave manufacturing in Canada and bring the company’s marketing and communications headquarters to the US, where Demsey would showcase his innate ability for brand identity building and intuitive business decisions.
From New York, Demsey would take MAC around the globe. He developed an understanding of pop culture and strove to understand fashion trends throughout many young communities. Very hands-on, Demsey immersed himself in high-fashion and worked closely with industry artists to gain insight. Through his understanding of the influence of media and ability to tap into the desires of youthful audiences, Demsey had an overwhelming hand in the overall success of MAC Cosmetics.
Key Takeaways — Change Begets Change.
It was the late 90’s. The progressive change was coming and values were shifting. MAC’s loud entry into the scene, along with a clear stance on social justice issues, gave the brand the edge needed to build a cult following. However, the initial buzz is just momentum after all and the brand would really take off under intuitive and committed leadership.
The total acquisition by Estee Lauder allowed John Demsey to make strategic decisions that would strengthen the brand and further its identity development. John Demsey’s ability to take on the brand direction and lean further into the reasoning behind MAC Cosmetics’ momentum is what would eventually build the brand we know today.
Demsey’s commitment to developing a deep understanding of MAC Cosmetics current and potential customers allowed the brand the ability to resonate with millions.
Intuition & Brand Identity Turn a Niche Makeup Company into a Cult Brand
Strong Positioning & Pop Culture
Learning on the fly, John Demsey developed creative direction habits during his time at MAC that he still uses today. Demsey understood the attraction and outlet that MAC provided to its followers and he strove to not only maintain it, but duplicate and deepen it. Dempsey knew the effect that pop culture had on the masses and would continue to partner with figures in pop culture to drive MAC brand recognition amongst younger crowds.
You could say that Demsey had an understanding for “content creation” before content creation was a career aspiration or high-cost advertising spend. As MAC was rising amongst the rank of fashion experts and filling in the gap for creative cosmetics, the internet was coming alive amongst the younger generation.
As we know today, the internet facilitates over 500 billion dollars in American retail sales per year. This kind of sales boom doesn’t happen overnight and MAC Cosmetics was just in time for the start of the internet influence phenomenon.
With only Viva La Glam and pop culture partnerships to boot, MAC Cosmetics was famously displayed directly in front of its target market—without ever having to advertise. Fully understanding this concept, Demsey began to target other young and thriving communities. By 1999, Mary J Blige and Lil Kim were Viva La Glam spokespersons and the brand began to grow amongst hip hop trends. Over the years, MAC would continue to partner with celebrity names such as:
- KD Lang
- Fergie
- Missy Elliot
- Christina Aguilera
- Lady Gaga
- Cyndie Lauper
- Ricky Martin
- Nicki Minaj
- Elton John
- Shirley Manson
- Pamela Anderson
- Eve
- Rihanna
- Miley Cyrus
- Arianna Grande
- Winnie Harlow
- Sia
- Rosalía
With each campaign, each spokesperson promotes a limited-edition, Viva La Glam lipstick shade that has continued to donate money to the Viva Glam Fund. Today, the donation campaigns have expanded to contribute over 500 million dollars to a varying number of social equality causes.
Proof in the Pudding
John Demsey was no doubt integral in furthering the success of the MAC brand. With his strategic approach, he was able to better understand the wants and desires of consumers in many countries. He surrounded himself with intelligent women and diverse advisors to keep his confirmation bias to a minimum and keep an open mind to the trends of the youth.
Over the years, he has spoken many times about the importance of building a strong and charismatic brand, while giving away the lessons he’s learned from decades of experience. In an interview discussing brand strategy, five key points were derived from Demsey’s creative process.
First, Demsey believes that you should be immersed in the culture of your audience. He stays plugged into MTV, local fashion magazines, and sits in popular city centers to connect to the youthful energy.
Second, he believes big ideas and big impact lead to big influence. A brand should stand out and evoke emotion from consumers.
Third, Demsey believes in the bigger picture. He didn’t view MAC as another makeup product but as a desire to be beautiful—drawing again on consumer emotion.
Fourth, he believes that the retail experience should be memorable, fun, and longing for more. (Note the feeling that is presented in any MAC location, whether standalone store or department counter. Man, woman, and child can recognize that something different is happening in that space.)
Fifth, Demsey views the media as the source of power—and equality—when it comes to brand promotion. While mass media allows for exponential opportunity, the fault in its fragmentation allows for a level playing field.
Hardly three years into Demsey’s first global brand direction, MAC Cosmetics had expanded considerably. By the year 2000, MAC was available in 300 locations and was not slowing down. This number would more than triple in the years to come because of the brand’s continued commitment to relevancy and high-fashion.
As a result of the overall growth of Estee Lauder and global media, distribution was able to expand. In the years that Demsey was the President of MAC, the dedicated executive took distribution of MAC from 19 markets to 72 worldwide.
Following his success with MAC, Demsey was promoted to the President of Estee Lauder and remains an overarching figure for the beauty conglomerate. His intrinsic ability is steeped in common sense, passion, and results.
Not only did Demsey influence brand discovery and commitment within Estee Lauder, but the methods of MAC sparked the inspiration for an entirely new generation of beauty brands.
Key Takeaways — Understanding is Deeper Than Knowledge. It’s about more than the bottom line.
By understanding the deeper meaning behind brand/consumer connection, Demsey was able to help develop MAC Cosmetics into a cult-classic brand. Through understanding human emotion and how emotion can be impacted by a brand, MAC has become a source of comfort and inspiration for individuals and businesses alike.
This deep and universal connection is responsible for lifting the brand up, carrying it amongst the whispers, and allowing it to root around the world. Distribution, however, was strictly strategic logistics.
The Icing on the Cake—Quality Product Development
Socially & Environmentally Conscious
While MAC gained much of its recognition through celebrity endorsements and philanthropic initiatives, the company continued to expand because of its commitment to quality, high-end products. To back up the loud presence of the brand, the products had to hit the mark. Had the quality of MAC products been low and leaving something to be desired, the brand would not likely have had the success that it has.
However modest the start, MAC never faltered in its commitment to creating high-quality products for true beauty creators and artists. Over the last 27 years, the brand has had to stay agile, plugged in, and predictive of upcoming industry trends—all while adapting to the new era of retail.
The company has shown their adaptability in its many commitments and initiatives to be an ethically sound brand. Still committed to inclusivity and diversity, the brand has shown its ability to address sociocultural concerns.
Cosmetic testing on animals began to raise concerns in the early 2000s, with many organizations advocating for the rights of animals and claiming the cruelty that was prevalent within beauty product production. While MAC has factories and distribution centers in countries that allow for animal testing, MAC has commited to never testing on animals, nor requests any animal testing from a third party.
As industry trends have shifted focus to the planet and “clean beauty” in the early 2020s, MAC Cosmetics has again made efforts to stay relevant and thoughtful in the beauty space. The company has made product transparency a part of its mission and aims to innovate only leading health-conscious beauty products. They omit a list of popular and harmful chemicals while vetting only the purest and cleanest ingredients to use in their products. When considering the ingredients in their products, the company also considers the environmental impact of the production.
Along with ethical internal practices, MAC has made recycling and eco-conscious practices available to their customers as well. To limit the amount of MAC plastic that doesn’t get recycled, MAC instituted a program that allows customers to return six MAC containers for free lipstick. This full circle “give back” initiative allows the brand to gain goodwill and help the planet. They have committed to continuously searching for the most sustainable products to use in their packaging and present a genuine interest in environmental health to their consumers.
Creativity is Key
Yes—MAC is socially conscious, environmentally conscious, and incredibly philanthropic. However, creativity and innovation should be equally credited for the overwhelming success of MAC Cosmetics. Globally, the brand has over 7000 product offerings and more than 100 eyeshadow shades, all with a unique flair and purpose.
Starting with their bold lipsticks, the brand continued to build complex and stand-out collections that had little competition in the early 2000s. Initially, the brand expanded into eye shadow pallets and foundation shades to match various skin tones—a limited product offering that would shock us today. Over the last 20 years, however, the company has not slowed down on its product creation.
While themed makeup releases are more prevalent today, MAC was the first cosmetics company to release imaginative makeup collections. With 52 launch collections each year, the design team at MAC works around the clock to ensure that the most creative, original, and artistic collections are brought to life.
Limited edition makeup collections have ranged from collaborator campaigns and partnerships with brands such as Disney. MAC has dropped show-stopping and fun collections like the Aladdin and Cruella collections that gain considerable attention from nostalgic millennials.
Key Takeaways — Engagement Drives Consumption.
What MAC has done very well is to keep its customers engaged. Relevant partnerships, unique product development, community initiatives, and customer rapport have all worked to keep the brand in the minds of its demographic. They resonate with their consumers, they understand what their consumers want from the businesses they buy from, and they provide the solution within their company.
Their adaptability and willingness to change has kept them at the forefront of the cosmetics conversations and contributed to their position as the #1 cosmetics brand in 19 markets.
MAC Cosmetics Dedication to a Customer Aligned Marketing Strategy Drives Business
Give the Customer What They Want
—Even If They Don’t Know It Yet.
Acting in line with Demsey’s methodology, the company has continued to be a brand that is for its customers. Initially carried on by word of mouth and celebrity endorsements from affluent people like Princess Diana, MAC Cosmetics would eventually shift into target marketing techniques that cost them little-to-no direct advertising spend.
To better understand and reach the intended market, the business development team at MAC took on a “segmentation strategy” for properly building and launching products to certain groups of people. By segmenting product development into Demographic, Geographic, and Physiographic categories, MAC is able to better understand the needs of each group. This systematic approach to analyzing their target market allows them to develop the most effective and appropriate products for the intended group.
As social media was ramping up to be the influencer partnership tool that it is today, MAC was leading social media strategy. Back in 2014, a report found that MAC was far ahead of its competitors as the company was already using social media as a tool to provide more value to their customers. MAC understood that many of their clients were artists, educators, or simply passionate about makeup so they began to put out educational content, tutorials, and creative content that engaged their audience. This is a practice that is widely used today, as social media has become the ultimate hub for beauty education and product discovery.
Around the same time, MAC was encouraging brand engagement in other ways as well. MAC Cosmetics created the “Lover Loyalty” Program that rewards purchasers for continued brand purchases. This annual reward system provides tiers of rewards for every level of customer, and provides added benefits for the more money spent with the brand.
Distribution & Tools of the Digital Age
As mentioned above, widespread and fast distribution was an obstacle that MAC went at heavily and thoroughly. Led by Demsey, the company was able to expand quickly and effectively because of the strategy that was behind their distribution plan. MAC Cosmetics successfully implemented the trifecta of distribution by creating a balance of Product, Place, and Price. This approach should ensure that the product is in demand in the new market, that the product can be made readily available in the new market, and that the product is priced in an actionable way for the new market.
In recent years, the company has only made itself more available to desired markets. From 2012-2018 the company worked on expanding within the Indian market, became available at Ulta online, and was guaranteed to be in every Sephora Canada store.
Executives at MAC were able to do this through the use of adequate market research and immersion. This keen eye for research and thirst for data comprehension would carry MAC far into the digital age as they wanted to gain insight into current markets.
With analytics, bots, and cookies available, MAC learned to apply these tools to better understand the effectiveness of their ad spend. MAC now uses a combination of people-based marketing and cookies to give marketing analysts a better understanding of ad performance. Making use of various analytics has helped the company produce better results from targeted ads and draw conclusions on product feedback from engagement ratings.
Key Takeaways — Go Where the People Are.
Digitally and in real life, MAC made a definitive plan to place their brand in the eyes of their ideal customer. Whether that be via educational video or physical product availability, their understanding of product, placement, and pricing led to the exponential growth they received year-after-year.
What's In Store for the Future of MAC Cosmetics?
MAC Opened the Doors & The Competition Walked Right Through Them
Will MAC Cosmetics continue to be the color authority of the luxury cosmetics industry? Or will a prodigy of the global giant overtake them and cost them their sales?
While no public information definitively predicts this at the moment, MAC Cosmetics will have to keep up their ingenuity and originality to stay current in today’s beauty marketplace. Name brands like Urban Decay, Kat Von D, and Smashbox were all created after MAC Cosmetics and stand as strong competitors against the 37 years old brand. Because of the success of MAC, many beauty brands aspire to follow a similar trajectory, enlist the same strategies, and provide a similar value approach.
Although MAC inspired countless cosmetics brands, they still retain the largest ecommerce market share in the cosmetics industry, especially in lip products. While MAC may have provided the blueprint for the brands that followed, the company hasn’t been terribly affected by their competitors' success.
Growth By The Numbers
Virtual Innovation & COVID-19
Like every business in every industry, MAC Cosmetics was not left unscathed by the rippling effects of COVID-19. Global shutdowns and distribution issues rocked the world of in-person retail and drove more business online. This led to multiple storefront closures and employee layoffs as the company attempted to adjust to the changing times. With retail already in a decline, this is a decision that COVID forced many businesses into before they likely intended.
However, in 2020, MAC Cosmetics launched a virtual concept store where customers could socially-distance shop for makeup in a store designed right out of the future. In this virtual store, customers can be accurately color-matched through a software mirror built for beauty assistance. The first of its kind in America, this type of technologically powered store could potentially inspire a new era of retail.
Key Takeaways
Despite having its market strategy, brand identity, and product style duplicated by brands across the globe, MAC Cosmetics currently holds its position as an industry leader and fashion authority. The brand’s commitment to adaptability and market connection has spawned a faithful audience that is likely to continue to use MAC for years to come.
Should the company continue to set examples in methodologies and experiences, its expansiveness and customer acquisition will only continue to grow.