The Body Shop’s UK managing director Simon Coble talks to Retail Week about the retailer’s ambitious expansion plans online and in-store.
Back in February, The Body Shop launched a campaign to help Reggie find love on Tinder.
The beauty retailer hasn’t expanded into the online dating world, but instead used the app to promote its Bio Bridges campaign as part of its ongoing commitment to tackle deforestation. Reggie is a red-shanked douc residing in Vietnam who needs a mate, and The Body Shop has taken it upon itself to help him find one.
The Body Shop at a glance
Annual turnover: £1.3bn in 2014/15 financial year
Number of stores: 3,102
Number of countries: 65
Acquisition value: Acquired by L’Oréal in 2006 for £652.3m
The Body Shop’s reputation is intrinsically linked to its ethical foundation ever since founder Anita Roddick opened the first shop in 1976, and the business has made strides to reiterate her values this year. UK managing director Simon Coble says the retailer’s ethical roots were “one of the main reasons we were bought by L’Oréal” for £652.3m in 2006.
In February, The Body Shop launched The Commitment, vowing “to be the world’s most ethical and sustainable global business”.
Sustainability is an increasing concern for all retailers, but few have made such a bold statement of intent to tackle the issue while driving profits. However, Coble says that it was a no-brainer for the business.
“It’s really not a choice for us – Anita set this company up as a business that was for profit but also a force for good and we’re very clear with everyone who works here that the more products we sell, the more good we’re able to do,” he says.
So how does the beauty retailer intend to make good on its word? It has set a series of targets to meet by 2020, one of which is to regenerate 75 million square metres of forest in countries including Vietnam and India.
It ran an advertising campaign, ‘Help Reggie Find Love’, to promote this cause across social media platforms including Tinder. The retailer is also running a summer-long promotion in which every product a shopper buys contributes 1 sq m of forest in areas affected by loss of biodiversity.
When it’s not helping monkeys in Asia, the retailer is eyeing expansion closer to home. Coble says the beauty retailer is gearing up for bricks-and-mortar expansion and an online upgrade following “significant investment across all channels”. How has The Body Shop got itself in shape for its next phase of growth and what are its plans to expand?
Growing ahead of the market
Although the retailer reported globally a 5.8% drop in fourth quarter like-for-likes in February, Coble insists its UK performance has been “very, very strong”.
“We’re probably going through our fastest period of growth in the last 10 years. We had a very good 2015 and significantly outperformed the beauty market here and that’s really continued into this year,” he says.
“Where we’ve seen the overall beauty market slow down in the first half of this year, we’ve continued to grow above the market from a like-for-like point of view.”
So how has Coble, who joined The Body Shop five years ago after a stint as Uniqlo’s UK chief executive, delivered these results?
“Our performance of late has really been driven by the investment in digital, in people and training and the refurbishment programme of the stores coupled with significant changes in the products,” explains Coble.
“We’re looking at 10 to 15 new stores per year over the next three years, that opportunity is still there for us and even though we’re quite mature we still think we could accelerate quite significantly”
The retailer has refurbished 170 shops across its 260-strong estate over the past three years to give a greater focus on in-store consultations, and has trained specialist skincare consultants across its top 50 branches.
Coble says this experience-led strategy has paid off and adds the retailer plans to be “quite aggressive in terms of store acquisitions” over the next few years.
“We’re looking at 10 to 15 new stores per year over the next three years, that opportunity is still there for us and even though we’re quite mature we still think we could accelerate quite significantly,” says Coble, adding that he is prioritising “major cities and transport locations” across the UK for new stores.
The Body Shop has also extended its skincare range and added more premium product ranges over the last year, all of which Coble says has contributed to the category becoming “the main driver of increased sales” at the retailer.
In an effort to keep its employees invested in the business, The Body Shop has started offering its in-store staff training for an externally credited beauty diploma.
“What’s super-important for us is that we understand from the team that work for us what engages them about The Body Shop – this qualification will enable our staff to progress their career not only with us but also within L’Oréal,” says Coble.
While The Body Shop’s bricks-and-mortar and environmental ambitions are not to be sniffed at, Coble insists it is the retailer’s online platform that is set to undergo the biggest shake-up.
“The ecommerce platform we are launching represents the biggest single digital investment we’ve made, certainly in my time and probably ever”
The beauty retailer is overhauling its ecommerce website onto a Hybris platform across all markets where it has a standalone store presence over the next nine months, starting with the UK at the end of August.
The investment will enable the retailer to offer, among other benefits, click-and-collect and third-party delivery options for its shoppers.
“The ecommerce platform we are launching represents the biggest single digital investment we’ve made, certainly in my time and probably ever,” says Coble.
“We think there’s a huge benefit [to the upgrade], particularly with click-and-collect – it’s a very obvious and reasonably quick win for us.”
The retailer has also upgraded its loyalty scheme. Entitled the ‘Love Your Body Club’, the points-based scheme was updated last year from an annual programme with a £5 joining fee to a free lifelong membership. Since upgrading the scheme last August, Coble says The Body Shop’s loyalty card membership has swelled to “several million members”.
“The bulk of our transactions on a daily basis are through our Love Your Body Club scheme, both in-store and online,” he adds.
The Body Shop’s ambitious goals to improve its stores and online offer are admirable, but self-help can only take any business so far. Is Coble concerned that external factors such as the introduction of the National Living Wage could hamper growth?
“[The National Living Wage] is coming at a time that is coupled with [the apprenticeship] levy, rates increases, the impact of Brexit – so all of those factors we need to consider”
“It’s clear it’s a significant cost for every retail business and it’s coming at a time that is coupled with [the apprenticeship] levy, rates increases, the impact of Brexit – so all of those factors we need to consider in terms of what it means for us going forward,” he says.
The Body Shop matched the Living Wage for all its in-store employees last year but Coble is mindful that there are turbulent times ahead for all UK retailers.
“What is obvious to us is the combination of all of those things are happening in a very short period of time, so that’s what we’re trying to work through now,” says Coble.
However, business rates and Brexit haven’t damped Coble’s sizeable ambitions for The Body Shop.
“The question for us is how we need to invest in the business,” he says.
“That materialises itself in investment in our digital platforms, new stores, new product innovation. All of those things are going to be key for our growth and how we will, as much as possible, offset the impact of those factors.”
Like Reggie, Coble is looking to find a match between The Body Shop and long-term growth by combining store expansion with online investment.