Almost half of households (49%) said that the Covid-19 pandemic has made sustainability even more important to them, according to a report by Kantar. As more brands take the sustainability route to connect with consumers today, cosmetics company The Body Shop, one of the early entrants in the space, looks to bet big on sustainability-focussed store formats. It plans to open three new stores every month for the next one year including new activist workshop store format as well as regular stores. In conversation with BrandWagon Online, Antara Kundu, general manager, marketing, brand and customer acquisition, The Body Shop – Asia South, talks about the importance of being sustainability-driven, expansion plans of The Body Shop, and more. (Edited Excerpts)
Currently, sustainability is a big thing within the market. As one of the early entrants, how do you ensure that you stay away from the chaff?
The brand started in 1976. And it was one of the earliest pioneers of what we now call corporate social responsibility (CSR). It has been over 45 years of the brand being in existence and over 17 years in India. Sustainability is sustainable if it makes sense for the brand, the business and the consumer together. Within our category, The Body Shop is one of the few brands which has really been able to live that. If you look at our key drivers of sustainability, the Community Fair Trade is the largest fair trade sourcing program within the cosmetic industry. Apart from that, if you look at the history of campaigns from The Body Shop, since the ’80s, Greenpeace, saving the whales, stopping the burning of the Amazon, among others are from us and India is a great example of again locally driven campaigns. Our activism campaigns in the past have included Stop Sex Trafficking of Women and Young Children, Support Her Education, Forever Against Animal Testing and most recently, Project NARI. For us, sustainability is also our causes which we support, which is environmental and social causes.
While sustainability has become a bandwagon to kind of jump on, the difference is as it always will be in how do you do that consistently.
How important is India as a market? How much of the business comes from smaller towns and cities?
From a global perspective, India is one of the top seven Body Shop markets in the world and if you specifically look at India, within the Asia Pacific, it is a growth driver for the brand. We do not sell in China. It’s one of the most exciting beauty markets in the world as well. We have a demographic on our side, and there is a lot of untapped potential from a consumer usage point of view.
Coming to markets, we are currently at about 200 stores in the country already. We are spread pretty well in non metros. For example, Mysore has three stores of The Body Shop and Jaipur has seven. Over the last couple of months, we have launched stores in cities such as Darjeeling and Imphal.
The brand has always believed in being accessible to the customers wherever they are, and that includes omni channel and e-commerce. Between our own e-commerce and third party players, we service about 30,000 pincodes in the country. In terms of business, retail accounts for about 65% of the business, while online amounts for 15%. The balance 20% is pure omnichannel which is a recent, post-pandemic development. Within online, our own e-commerce channel accounts for about over 60% of the revenue, followed by other marketplaces such as Nykaa, Myntra, Amazon.
In terms of scaling up, we are looking at expanding the omni channel footprint. Over the next one year, we will add three stores per month.
Where is The Body Shop placed amongst its competitors in India?
From a pricing perspective, we are at the right space for a market like India because we are a premium player, but we are not a niche player. India is a very price conscious market and we’ve made strategic calls. From a business and an affordability point of view, our bath and body segment is a customer acquisition led category. Our shower gels start at Rs 345. If you look at our top selling product in India in terms of volume, it is the British Rose shower gel, that’s priced at Rs 345. We also have lip balms, facial washes which are at affordable price points, but when you go to higher performance or loyalty driving categories such as skincare, you will have more premium priced products.
There’s a lot of trust in the brand in the market because we were one of the first international beauty players to come. We also have a price advantage, in fact, earlier this year, we looked at an affordable price play in certain formats. For the essential formats, such as face washes, shampoos, conditioners which are the regular replenishable for any customer, we have kept a flat pricing of Rs 595. This will ensure that our loyal consumers will always be able to afford the brand. And beyond that, we have launches such as Edelweiss, which are higher performing and niche products, that are priced on the higher end.
Which is the hero category and why?
Our top category is skincare. India on skincare performance is over indexed as compared to the Body Shop globally. This is followed by bath and body and hair care. The advantage of being strong in these three categories is that its a good mix of bath and body which is an easy to recruit category, which people buy more frequently and replenish more frequently. Skincare and hair care are loyalty driven categories, so once a consumer finds a product that really works for their skincare concerns, or haircare concerns, they are very unlikely to switch. Bath and body on the other hand is sensorial, it’s indulgent. And then we have makeup, fragrances, gifting.
Typically consumers tend to enter the brand through bath and body, which drive good volumes for us. As the size of wallet expands and they look at more formats or more categories to try, they then come into skincare and hair care.
So while the concept of sustainability has started picking up in metros and everything and people relate to it a little bit more, how difficult is it when it comes to tier two tier three markets?
We will open at least three new stores every month for the next one year. Most of these will be in smaller towns and cities. Earlier this year, we launched the sustainability-focussed activist workshops store format, which is a big bet for us.
That’s a truly sustainable store design concept. We have also launched our in store recycling scheme, which is called ‘return repeat recycle’ through the stores. We have in store recycling bins in all our stores. Customers can bring their plastic empties, just drop it off to our stores. So that’s something we are pushing to inform consumers. We are working with local recycling partners on a national level to take that back to recycle it and to repurpose it. We’re also looking at how do we repurpose it and bring it back to our stores as well.
The store expansion that I talked about, will include new activist format stores as well. We believe activist workshops stores are not just for metro consumers, but across cities. From an education point of view, thanks to this digital boom, consumers in the smaller towns and cities, are very aspirational and discerning.
What will be the marketing strategies?
A lot of the marketing choices that we make are dependent on our accessibility. Our kind of brand requires storytelling so we need to find the right marketing channels which lend themselves well to this kind of storytelling. Online is a huge bet for us and has been for a long time because digital platforms such as YouTube, social media, allow for storytelling, and also allow us to target the consumer that responds best to this kind of storytelling which is young, ethically engaged consumers. This does not mean that we haven’t done ATL before. For example, in 2019, the first television campaign The Body Shop has ever done globally was done in India. So during specific tactical periods, we do invest in visibility, which is out of home, but on a consistent basis, in terms of big bets and marketing, it’s always digital.
Above-the-line (ATL) is on the table and so is below-the-line (BTL), but it ultimately needs to make sense from a tactical point of view. So even for the upcoming quarter, we remain very bullish on digital for Edelweiss specifically because there is so much to talk about on this range. We are investing quite heavily in digital, and in store education as well because all consumers are not sitting online.