Industry 4.0 is booming, becoming a nightmare for many brands, but Lush soap shops still grow strongly with more than 900 stores in 50 different countries even without advertising, not plastic packaging, ..
It can be said that Lush’s business strategy from the beginning to now is almost contrary to tradition, such as beautiful packaging, using chemicals for low cost, advertising, .. Lush aims at lofty goals to protect the environment and customer interests. Lush has become the world’s largest natural cosmetic brand with more than 900 stores in 50 different countries.
100% natural products, investment in customers and the environment, owning physical stores as main sales channels. Today, ignoring the development of technology, Lush not only set a record for revenue but also on growth, bringing a wealth of value to customers and the living environment.
Lush’s business strategy
Wishing to create the best products for customers, Mark Constantine and Elizabeth Weir have established and failed successively in the first two companies. Why is that?
It must be said that any strategy will have its advantages and limitations. Sometimes the tactics at that time were not suitable for the situation, human psychology, …
That day, the founders Mark Constantine and Elizabeth Weir were determined to pursue a passion for health to establish Constantine & Weir.
After a period of research and product development, in the early 1980s, Mark actively called and convinced the founder of The Body Shop cosmetics chain, bringing a modest order with a value of only about 1,200 pounds (nearly 36 million VND).
With outstanding quality, Constantine & Weir quickly gained customers’ trust and became the main supplier of the chain, continuously creating a range of new formulations and products to serve the market.
But that was all Constantine & Weir did, recognizing the importance of product quality, The Body Shop was determined to “buy out” all existing formulas for £ 11 million.
Completely dependent on The Body Shop for retail and no other distribution channels to stand out from the competition, Constantine & Weir accepted the offer with a five-year commitment to exit the retail market. traditional.
But it did not stop the passion of the two founders, Mark and Elizabeth used the royalties to set up a company to sell cosmetics through the name Cosmetics-To-Go.
Despite gaining some initial success, but with long delivery times, poor financial management and many limitations in communication, Cosmetics-To-Go quickly went into bankruptcy and had to sell itself to Poole .
After the second defeat, both founders realized the importance of the physical store for cosmetics, Mark, Elizabeth and 4 former Cosmetics-To-Go employees using all the little money remaining. to buy ingredients, mostly fruits and vegetables from the market. At a small shop in the UK, the new founding team created a series of hand-made cosmetics right upstairs to sell to customers on the ground floor.
They are extremely focused on product quality. After discovering the flavors that the company is using are not “pure” as expected, Mark decided to cancel the order and ask everyone in the group to extract the scent from the ingredients themselves. Naturally purchased.
After an “anonymous” period, a naming contest was held and “Lush” (synonymous with green and nature) won.
More specifically, the cost of Lush products is based entirely on production costs and customer needs, with an emphasis on urban women aged 18 to 45.
Competition in the market in every commodity is equally fierce. So in business or making a difference in product quality, they may be different in packaging, or different in service, … To make a difference with competitors, right from the early days, Lush has Commit to our products using only natural ingredients, from soap, cream to shampoo and mask. The most prominent is the product “bath bomb” made from baking powder, citric acid, essential oil … capable of foaming quickly to form a very good bath for the skin.
Not only producing 100% natural products, Lush is also determined to become an “environmental” brand through the process of delivering finished products to consumers, such as all soap products. No packaging is required on display, and if you need to pack it, you will use recycled paper that can be easily destroyed.
For products that require containers like lotion, Lush uses recyclable polypropylene plastic boxes. But don’t stop there, if customers collect enough 5 plastic boxes used by Lush and return them to the store, they will receive a free skin care mask.
To save electricity, Lush products are always kept at room temperature, except for masks that must be cooled because there is no preservative with the main ingredients are fruits and vegetables.
Lush is also one of the first brands to refuse to cooperate with animal product testing companies. All Lush products are tested on volunteers before being released.
Lush is also a pioneer in cutting palm oil because over-exploitation is causing imbalance in the tropical forests and affecting the orangutan habitat. By 2008, Lush soap was announced 100% without using palm oil.
Advertising will make businesses or products reach consumers most effectively. However, Lush does not advertise but uses his actions to reach the hearts of consumers, they penetrate deep into the psychology of the people of customers, arousing love. IT IS HELPING LUSH GROWTH.
Lush set a policy of “saying no to advertising” when relying on customer sharing instead of investing in expensive traditional channels like TV or celebrities. The money instead of spending on advertising will be returned to customers and the environment.
Salespeople also became an important ambassador when Lush allowed them to sell and act on the principle of “random goodness”: Employees were allowed to give away free products to their guests if they felt it. It can make them happy, on occasion of an event, or simply create a good relationship with potential customers.
Not only refusing to cooperate with animal testing companies, Lush also launched the “Lush Prize” with a value of more than US $ 750,000 per year to “wipe out” this “inhumane” action. .
In 2007, Lush launched a line of skincare products called “Charity Pot”, pledging 100% of sales to be sent to organizations that protect the environment, animals and human rights. Up to now, “Charity Pot” has been enthusiastically responded by customers, helping to send more than 10 million USD to 850 organizations in 42 different countries.
Not only acting for the environment and animals, Lush also actively organized human rights advocacy programs, such as raising $ 425,000 from “GayIsOK” soap revenue to support LGBT activists. In 2016, Lush also successfully donated $ 300,000 through the “Hands of Friendship” soap sale to support Syrian refugee camps.
So, despite the poor business results and a series of retail brands’ dark perspectives, Lush still thrived as if nothing had happened.
Lush’s North American revenue alone recorded a record of 530 million USD in 2017, with nearly 4 million customers following regularly on Instagram, a dream result of any cosmetic brand.
In the main market in the UK, Lush’s revenue grew by more than 13% in 2018, an impressive figure when the Health & Beauty industry’s growth rate was only about 2.9%.
In addition, Lush is planning to expand 30 existing physical stores to focus on the trial area and display product uses, affirming its ambition to become one of the region’s largest beauty brands. European-American region.
Each person has different tactics but Huong has always been aiming for quality. No matter what work Huong does, she realizes that the quality goes slower but the efficiency is extremely durable. Hope you will have a new vision of non-advertising tactics that can still exist. Khai Silk once said that “natural scent of incense” cannot be applied in today’s business, because the house of people who run ads approaches customers, .. But Huong finds it depends on the product, depending on the financial situation. Different tactics. For individuals / businesses that are less able to race according to the big guys, the technology era has developed but the money spent on advertising today is so much so that not everyone can follow.