The Body Shop is famously known for its ethical approach to business, fair trade, 100% vegetarian products and being against animal testing (thebodyshop.co.uk, n.d.). The company believes in following their five core values which are: to support community fair trade – using small medium sized suppliers, defend human rights – create an awareness of domestic dispute and child abuse, against animal testing, activate self-esteem – looking after their customers and their employees and lastly protecting the planet – reducing CO2 levels, electricity, gas and water (thebodyshop.co.uk, n.d). The Body Shop has also created their own charity, The Body Shop foundation that was launched in 1990, emphasising on their 5 core values.
1.1. Brand History
Anita Roddick, a human rights activist and environmentalist founded the company in the United Kingdom in 1976. The first store was opened in Brighton; the store was on a small scale and only sold 25 different products. A spirit of environmental friendliness dominated the brand by encouraging its customers to recycle; this philosophy would remain its motto till present (thebodyshop.co.uk, n.d.).
The Body Shop experienced rapid growth early on and its first overseas store was introduced in Belgium in 1978, by 1982 its growth increased to a rate of two stores opening per month. In 1984 the company entered the stock market and its shares grew in value at a very high rate, being nicknamed “The shares that defy gravity” (Entine J, 2007).
In 1985 the company sponsored posters for Greenpeace, starting its own campaign “save the wale” a year later also for Greenpeace. In 1990 The Body Shop Foundation was introduced that funded human rights and environmental groups (The Body Shop International plc, 2012). These activities went to further establish its reputation as an environmentally conscious company, already cemented by its prohibition of animal testing on its products and successfully making animal testing illegal in the UK in 1998.
By 1990 the company first opened in the United States, it had already expanded to 39 countries and had 2500 applications for a franchise. In 1994 the company launched its direct selling section, The Body Shop at home, expanding to other territories in later years. In 2006 the company was purchased by L’Oreal for £652.3 million, the company was no longer independent, but managed to maintain its operation independently from the company. (The Body Shop International plc, 2012).
The Body Shop sells a collection of 900 natural beauty products with the “inspired by nature” slogan (The Body Shop, n.d.). The Body Shop has a range of products, meeting various demands of customers. Products, which make up this range for women are, skincare, make-up, hair products, fragrance and body care, i.e. body butters. Men’s products consist of body care, skincare, fragrance, shaving and deodorant. The following report will be focusing on The Body Shop’s body butter, as some may regard the brand for being most famous for there body butters. The product category, which most suits The Body Shop as a brand, is health and beauty. A reason why The Body Shop gained such huge success in the health and beauty market since it began could be the reasoning of 100% vegetarian products that are free from animal testing (thebodyshop.co.uk, n.d).
Other products, which are included in their portfolio, are seasonal products, for example, winter make-up products and limited addition Christmas body butters which carry fragrances such as ginger and cranberry. The brands online store indicates that the body butters are among their ‘best sellers’ (thebodyshop.co.uk, n.d). The Body Shop is classified as a high street retailer rather than a luxury brand retailer locating their stores in town centers, along with other high street retailers in beauty and cosmetics such as Boots, Superdrug and The perfume Shop. Competitors that pose a direct threat to The Body Shop are brands that promote environmental values such as, Origins, L’Occitane, Space, Molton Brown and Lush.
2.Brand Owning Organization
The Body Shop was sold to L’Oreal in 2006 for an estimated sum of £625 million (BBC, 2007), The Body Shop would directly work with the chairman of L’Oreal himself. Annual financial reports and forecasts would be presented as part of the L’Oreal annual reports alongside other businesses that the company owns. By L’Oreal having ownership of The Body Shop it has questioned the brands identity on the basis of their values, and this has affected the performance of The Body Shop which has been evidenced in L’Oreal’s 2012 annual report, In June The Body Shop had a total of 2,781 stores across the world; this had consisted of stores operating in Western Europe, North America and new markets (loreal-finance.com, 2012).
Looking into the sales that The Body Shop have made in 2012, in the first half of 2012 they had made €373.9 million, however in the second half they have performed substantially lower that previous, totaling to €193.5 million (loreal-finance.com, 2012). The operating Profit of The Body Shop has come to a total sum of €11.6 million in 2012 (loreal-finance.com, 2012). Having shown the overall financial performance of The Body Shop from the previous year to the present, The Body Shop has shown some indication of lack of performance with a decreased sum of sales and profits.
3. Brand Value Proposition
The Body Shop’s strategy has remained intact since the L’Oreal take over in 2006; unexpectedly considering L’Oreal is not associated with strong natural credentials. The Body Shop adopts a multi channel strategy which spans across stores, online and direct selling, prides itself on being “Green” and has five core values, against animal testing, using community fair trade, to activate self-esteem, defend human rights and protect the planet (thebodyshop.co.uk, n.d.). The Body Shop’s customers are more biased to women and to the under 25’s and the 45 – 54’s, who seek natural and healthy products. (Mintel.co.uk, 2008)
Body care products such as the famous Body Butters are promoted to give functional benefits such as 24-hour hydration, leaving skin softer and smoother and providing a scent for the skin. Benefits of using their products on an emotional level could be your input to helping the environment, supporting communities in third world countries, moisturizing your skin with natural ingredients, which are good for the skin, and the idea of using a product, which is more exclusive than a brand such as Nivea.
The overall perceived brand value of The Body Shop however differs from their brand identity, if you consider The Body Shop’s competitor Origins, they use potent plants, organic ingredients and 100% natural oils (Origins.co.uk, n.d.). L’Occitane uses ingredients sourced from local farming communities and sustainable development programs and uses packaging materials, which are the least polluting or already recycled (L’Occitane.com, n.d.). Lush’s green message seems ingrained in everything the company does, reflected in the minimizing packaging (Guardian.co.uk, 2011). This research shows that the body shop is not doing anything its competitors aren’t, the packaging the company uses is not recycled and the products are not as natural as they make out with artificial smelling scents and packaging which has not previously been recycled.
The body shop is an established brand, being the first company to introduce fair trade to the beauty industry and prohibit testing on animals and has retained many of its loyal customers. The Body Shop doesn’t undertake huge advertising campaigns and promotions are narrowed to the retail outlets and online. The Body Shop’s essence or aura could be defined as beauty with a heart; they pride themselves on their values being at the heart of everything they do. (Bodyshop.co.uk, n.d.) The word ‘ethical’ would describe what The Body Shop stands for as it represents the brands values and identity.
4. Brand Communications Audit
The Body Shop in relation to its body butter product line currently makes use of a number of communications channels, which are both internal and external in nature. The audit will now list the key communications with an indication of the detailed considerations underpinning the methods used:
* The main internal communication for the body butter range may be seen as the corporate website. Here the communications are aimed at driving web-based sales as well as providing product information to both external customers and internal staff. Key information includes the features and benefits of the product; ingredients used and tips to maximising the benefits of the product. The website also allows customers to communicate with one another sharing reviews and tips. In addition, the website also features a number of key marketing “campaigns” which are aimed at driving awareness of the brands ethical values and policies as opposed to sales revenue. (thebodyshop.co.uk, n.d).
Social Media Communications
* One of the core communications to be used by The Body Shop in recent years is those, which take place through social media communication channels. In this case The Body Shop makes use of four major channels including Facebook, Twitter, YouTube and Tumbler. Product communities launched within Facebook have provided significant communications of the brands underlying values associated with ethical sourcing and production. In addition, the method also encourages electronic word of mouth communications (EWOM) to take place (Belch and Belch, 2012), with consumers being able to share reviews and information about key product lines such as the body butter range. In this case, again the communications method used may be seen as adopting an integrated approach to communications (Yeshin, 2006) with social media channels being linked to the company’s website and vice versa.
* To date, Body Shop has maintained a policy of minimising television advertising, partly due to the underlying beliefs of the founder of the business who believed that such advertising came into conflict with the ethical message of the brand (Rusch, 2012, Marketing Week, 2010). This may however be an element, which changes in the future since the acquisition of the Body Shop on the behalf of L’Oreal, a company that uses significant levels of television advertising.
Key communication campaigns have seen the use of an integrated approach to marketing with the use of a mixture of in store advertising material and outdoor printed materials such as poster hoardings and billboards. Such communications mix was adopted in the recent “love your body” campaign, which aimed to tap into the public debate on the issue of female self esteem and the perception of the physical body. In this case, the underlying message was designed to encourage consumers to enjoy life regardless of physical appearance (Thumped, 2012).
5. Product Category Audit
The table above shows the market value sales of body care within UK. As you can see from the chart above the market for body care has declined since 2010 and a further decrease is expected in 2012 by 2.1%, which makes it £326m equal to 2009 figures (Mintel, 2011). However the prediction for the market is bright as you can see the sale figures are due to increase by 2017 reaching £346million. The weakening sales of the body care market could be due to difficult economy and slowing of spending, it also seems as though consumers would substitute spending on body care for beauty products seen as more essential such as facial care, hair care and especially make up (Mintel, 2012).
The Body shop is a specialist cosmetic and toiletries brand and the market share for body shop within this market is 6.4% which makes them fourth largest within the market behind Superdrug, The Perfume Shop and Savers H&B. The Body shop is not only a body care brand, so within the 6.4% of the market share they offer many different kinds of products such as hair care, facial care, fragrances and more. The latest method The Body Shop used in an aim to increase their market share was partnering with Sephora in order to increase brand awareness within the market. (Mintel, 2011)
Since L’Oreal took over The Body Shop as a brand, it has shown no growth within the market, suggesting L’Oreal fails to show any devotion to make The Body Shop a leading or major player within the health and beauty market. The Lily Cole Cruelty Free Makeup Collection is one of the latest developments of The Body Shop, which they are hoping can give them an edge over their competitors. The Body Shop has also recently introduced a loyalty card scheme in order to maintain their competitiveness in the market.
The increase in ethical consumerism has resulted in rising environmentally friendly brands entering market; therefore customers are expecting more from companies who are ethical. The change that may affect the market in coming years is technology because companies such as Boots are already adapting to the changes for example a “Click and Collect” where the customer can purchase a product online and collect it from a store of there choice free of charge (Boots.co.uk,n.d.).