British natural and ethical beauty brand The Body Shop announced that it was going into administration on 13 February after trading for nearly half a century.
FRP Advisory, which is managing the restructuring, revealed yesterday that 75 stores will be closed over the next six weeks, with 489 job losses.
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As a pioneer in ethical toiletries, The Body Shop has long been proud of being “more than just a beauty brand.” Its website notes that “today, there are more and more brands following in our footsteps, and we’re glad to welcome them aboard.”
Yet it is these “following” brands that have succeeded where The Body Shop has failed, crowding the market and pushing out the trailblazer. The additional competition wasn’t the only reason for the company’s failure, though, as retail experts and branding professionals tell Retail Insight Network.
The commonplace USP
Aside from the additional competition, Dan Hocking, COO at advertising agency TroubleMaker, notes that The Body Shop simply wasn’t as unique as it once was.
“Initially, the purpose-driven brand was revolutionary, so much so that competitors like Drunk Elephant have adopted a similar ethos,” he says. “It was a concept that rightly earned success in the 80s and 90s, but The Body Shop didn’t adapt to changing consumer habits and preferences.
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By GlobalData“It could have invested heavily in traditional media channels to drive consumers into stores, or pivoted to embrace social media and influencers, winning over a new generation and audience. In doing neither, it appealed to no one.”
This view is echoed by Suzi Bentley-Tanner, retail expert at PA Consulting, who explains: “Being environmentally conscious was Body Shop’s key differentiator when it started. Since then, more and more organisations have become more aware of some of the big issues such as sustainability and animal testing and have followed suit. This has meant that it is now a very crowded and saturated market which makes it far more difficult to stand out.”
A contributing factor to this loss of uniqueness was the brand’s sale, according to to Dan Pratt, solutions director at Wolfenden Agency. who believes it was seen a sell-out in the eyes of conscious consumers.
“The sale to L’Oreal in 2006 was the beginning of the erosion of the brand’s purpose,” says Pratt. “A key point was that L’Oreal did test their products on animals, a clear compromise to the longstanding ethical position of the Body Shop.”
The brand that got stuck
Karen Green, founder of Buyer-ology, suggests another branding issue was its stagnation and that its downfall could have been avoided with a more adaptable approach to the changing needs of the consumer.
“It was effectively death by a thousand cuts,” explains Green. “The original shoppers who would have been baby boomers and Generation X grew out of the brand and Lush took the younger consumer. Their point of difference of sustainable and ethical become more hygiene factors for every toiletries brand and it needed to pivot and reinvent standing up to the ongoing competition from UK grocery, Boots, Sephora and others.”
Yet Chris Woodward, CEO at CTI Digital, argues that the brand lost its way much earlier, missing trends that its one-time supplier Mark Constantine – who went on to found Lush – did not.
Woodward argues: “The Body Shop is a classic example of a business losing its creative flair and therefore its relevance. Its failure can be tracked back to the early days when it parted ways with one Mark Constantine, who was a key supplier of a number of its products. Constantine rightly identified that there was an opportunity to produce a wider variety of ethically produced products that could be sold with greater retail flair.
“Constantine went on to found Lush. In so doing he brought more flair, greater retail theatre and a more robust ethical spin to the sector. Conversely, The Body Shop became a cash cow under various owners and stagnated – thus surrendering the disruptor space it had originally opened up. It’s a classic case of an innovator, Anita Roddick, creating a market but then new entrants, Lush, coming in and owning the market segment better by doing things better.”
Indeed, the attempts at diversification that The Body Shop did make failed on several fronts. Paul Dodd, chief innovation officer at e-commerce fulfilment partner Huboo, suggests that the brand’s slow approach to digital growth in particular quickly saw the brand fall behind.
“All retail brands need to evolve with the times, and today’s consumers – particularly younger audiences – shop differently, buying more products online and using the high street as a showroom,” he says.
“But as companies like The Body Shop and Wilko have discovered, being an effective e-commerce brand is about far more than simply opening up an online store or listing on Amazon … Consumers have found greater affinity with digitally savvy e-commerce-first brands that speak their language and better understand how to engage them online, leaving the old guard struggling to compete.”
The iconic Anita Roddick
Then there’s Anita Roddick, who founded The Body Shop, opening the first store in Brighton in 1976. It used vegan, ethically sourced ingredients, working with farmers and suppliers through its Community Fair Trade Programme.
For Vicky Bullen, CEO at branding consultancy Coley Porter Bell, Roddick’s value to the company and its brand should not be underestimated.
“In its heyday, the power of The Body Shop was Anita Roddick – a one-woman powerhouse whose passion and distaste for the beauty industry drove her to create something unique,” she says. “Business founders often have a potent energy that goes a long way towards fueling the success of their brand and business, and this was the case for The Body Shop.
“Then, of course, it was sold to L’Oréal, with ensuing confusion over the ethical principles, which were once The Body Shop’s unique selling point. In turn, it was sold to private equity, with a lack of resource to address the rapidly changing consumer and competitive landscape.”
Tom Wormald, managing partner at Yonder Consulting, recalls of Roddick’s tangible impact on consumers: “I remember my mum loved The Body Shop when it first launched. She believed its founder, Anita Roddick, was the epitome of purpose-driven business long before it became mainstream. For many people, Roddick kickstarted the idea that purchasing an item can be a fulfilling experience for your physical and emotional needs – marrying consumerism with making a positive impact on the world and contributing to a cause close to people’s hearts.
“Although The Body Shop never abandoned its purpose or ethical stance, somehow it lost the ability to connect with customers about that purpose. It had stopped making people feel good about the products they purchased at the level of that all-important emotional connection. It also began to drown in a sea of ethical noise, as more and more brands placed green and moral causes at the forefront of their branding.”
Competition: the final nail in the coffin
Russell Pointon, director of consumer at investor relations business Edison Group, notes that a slow Christmas period exposed the brand’s weaknesses.
“The Body Shop saw a steep fall in turnover in 2022, from £487m to £408m, and a slow Christmas trading period was the final nail in the coffin,” he says. “The Body Shop has faced a significant increase in competition so that ethical beauty products are more readily available elsewhere now, and the widely chronicled challenges facing the high street have played their part, as seen in the steady stream of store closures affecting companies such as Boots, HMV and Sports Direct. The restructuring and slim lining of The Body Shop will likely yield a different creature, but one that may be better suited to the current retail environment.”
This isn’t a view that is universally shared, however. However, Ruper Cook, business development director at customer experience consultancy Gekko, argues: “It is easy to point to a bad Christmas and weak consumer spending as the final nail in the coffin for The Body Shop, but in reality, the brand’s issues run much deeper. Despite being the go-to for ‘smellies’ in the 90s, the brand failed to move with the times. As consumers became more sophisticated about the cosmetics they use and other brands became cruelty-conscious, The Body Shop lost its USP and never found a new one.
“Occasionally, one might find a crusty tube of hand cream languishing in a cupboard somewhere, and that truly is a metaphor for what one of the most pioneering brands of this generation became – stale and forgotten.”
