Lush Case Analysis
Lush Case Analysis
How LUSH creates value.
“The whole point of Lush is that it should be fun for our customers and fun for us, while at the same time offering original products that work and give value for money” “Our aim is to offer the freshest products in the history of cosmetics.” “Create cosmetics that bring fun to people’s homes” LUSH©
Lush cosmetics is a global company, with over 500 locations in 38 countries. Retail stores in many major metropolitan markets and a worldwide mail order business. It’s market is mostly urban centers and tourist locations. Climate is not a predominant consideration.
The age spectrum of Lush cosmetics tends to be the 18 years of age and above market. Consumers have both knowledge of environmental and sustainability issues as a part of the customer’s value set. The price point and store location are most in high-end retail area and a part of their marketing strategy, to place in the luxury goods sector.
Gender: Clients tend to be mostly female.
Family Size: Varies
Family Life Cycle: Young, urban dwellers, single or married, children or not
Income: Middle income to higher income levels
Education: Varies. Consumers have knowledge of environmental, sustainability, animal rights issues. This knowledge can be found across the spectrum, although, more educated people tend to have a more detailed understanding. Higher educated people may have more disposable income to purchase higher end specialty products.
Religion: Not relevant
Ethnic origin: Not relevant
Generation: Generation X, Y, and Baby Boomers.
Social: Middle to upper classes.
Lifestyle: Achievers, strivers and survivors
Personality: Thoughtful about purchases, not compulsive
Occasions: Mostly regular occasion (daily use); but there are special occasion products in the Lush cosmetics line. For example, Christmas products, Easter, halloween.
Benefits: A quality, non-chemical, ethical product (not tested on animals)
Higher level of service in store (cut soap to order, wrap onsite), in store explanation of products. Salespeople at LUSH are required to give at least five product demonstrations throughout a potential customers instore visit.
User Status: Regular users, with a growing emphasis for new users (number of stores had grown rapidly just in ten years in business)
User rates: Heavy user (LUSHIES)
Loyalty status: Medium to strong
Readiness Stage: Informed and interested
Attitude toward product: Positive, in some cases enthusiastic
“Lush is about passion and iconoclasm: passionate for natural products, fresh handmade cosmetics, seductive perfumes, growth and profit – and iconoclastic about everything else.” – Angus Jenkinson – passion for fresh and handmade products
– offbeat, differential
– fun natural wholesome ingredients emphasis on DELICIOUS ENJOYMENT
– to help the customer to find a product that does the job it says (intended task effectively)
– dedication to “delight” customers
– fun for the customers and fun for us
– cheeky brand
– authentic brand
– pleasing value
– unconventional products that are natural, homemade and unique looking and a great experience
– wholeness and innovation (customers are a part of the operation)
– fun, quirky, natural, good for you,
– promotes natural healthy ingredients
– variety of products in skin care, bath and body care, off-beat gift ideas
LUSH: evocative name
– Cheeky, authentic, fun brand
– Stores distinct smell wafts outside stores into the street, providing lush with a distinct way of marketing which is recognized as a part of the lush brand.
– ‘scent story’ branding
– Fun sounding names for its products (Sex Bomb, The Big Calm)
– Freshness, nature and fun: heart and soul of lush and what lush represents – Customers are happy with the brand experience
– LUSH had a customer competition to come up with its name, very close to its customer base (Elizabeth Bennet from Edinburg thought of the name) – Stores are not franchised to ensure the LUSH concept is endorsed and maintained.
– natural organic ingredients
– 70% products no preservatives
– Produced in Farm kitchens
– Products are created and made, based on Mo’s own tastes and preferences as well as the producers. – Expirary dates on products which endorses the brands “freshness” and high quality
– Some products need to be kept cold in fridge
– Fresh ingredients = health trend. More consumers are becoming concerned with living a healthier lifestyle which encorporates much more than healthy eating and exercise (what you put on your face is also a big deal)
– Affluent customer base that is more educated about quality and variety
– Fair trade ingredients, as well as packaging
– Does not test on animals
– minimal packaging to none at all
– shampoos deodorants in solid bar form
– soaps in grease proof paper
– bubble bars, ballistics no packaging at all
– 100% recyclable paper bags to take home items
– Organic and natural products are color coded
– Recycled cardboard packages
– Minimal packaging is not only green it also provides store with distinct smell
– Popcorn as a filling for its mail orders, crumpled recycled paper
– colors, shapes, sizes and aromas of the products, products could sometimes be mistaken as edible (bread, stacks of fruit) – names of products very unconventional “Buffy the backside slayer” skin conditioner, “Demon in the Dark” soap, – shaped like huge cakes / loaves of bread; priced by weight – self-professed “cosmetics grocer”
– displays like a fruit stand “I’ve always loved the way fruit and vegetables are displayed in a grocery store” – Constantine – products sometimes start merely as words suggested by the customer (swoosh, smitten) – INSTORE DISPLAY: old fashioned grocer, beauty deli, product lists on chalkboards (small corner store grocer feel) – Mimics products of small independent retailers (craft sale) – Producers name is on lush products: name as well their cartoon face (homemade quality) – “walk around its remarkable stores th…..”
– innovative products (bath bombs etc)
– superior customer service
– LUSH educates customers on how to use their products
– product range- single consumable (bath bombs) to full skin care lines
– staff encouraged to contribute ideas and inspiration from all sorts of strange places (music lyrics, movies)
– retail is distinct, delicatessent
– The distinct LUSH smell is an emotional connector with its consumers –
retro lush: select from a list of discounted products ones customers would like to see remade (encourages brand loyalty) – shop is a blend of fragrances, bright colors, shapes, funny names, smiley faces and helpful people. (delight/in store experience to shop there) Augmented Product:
– fresh natural ingredients
– freshly made cosmetics
– no animal testing policy
– environmentally friendly packaging
– healthy products
– helpful and friendly staff
– attractive store layout and ambience
– product functionality
– product lines for vegans
– charity pots
– Free Expedited Parcel shipping on orders of $75 and Free Xpress Post shipping on orders of $90* – LUSH wants you to be happy with your purchase. If you would like to return or exchange a phone or web order, please call Customer Care toll-free to obtain a return authorization and receive further instructions – Please return items in their original packaging and include a copy of the packing slip. You can return items up to 45 days after the date we shipped your order. Shipping charges are not usually refundable. – online reviews of products on their site
– forum for lushies
– site is very charming, eclectic
– information on reducing your carbon footprint/ having a green washroom
– personal contact (not automated phone services)
~ Core benefit VS how LUSH creates superior value
PRICE Customer Cost:
– priced less than companies such as the body shop
– more than local competitors and supermarkets
– usually priced by weight
– Honesty: one of the most important values in lush. Fair prices for the customers are balanced by a fair profit margin for the organization. Cost plus basis? (Adding a standard mark up to the cost of the product) Value priced method? (Setting a price based on buyers perceptions of value rather than on the seller’s costs)
– multi channel strategy
– chain of stores
– mail order (cross selling)
– Constantines vision was to have 1000 lush stores world wide by 2008
– store locations: Very choosy about sites
– product ranges vary in store and mail order
– located in prime areas (e.g. In Edmonton one location in West Edmonton Mall the other on Whyte Ave)
– posh localities, next to high end stores, creates a premium image – high end shopping areas, next door to boutiques and jewellery shops.
– Lush is then noticed by less price-sensitive and sophisticated clientele and associated with luxury
Lush means green, luxuriant and fertile.
Their policy against animal testing made lush more prominent in the consumers mind.
It is powerful brand, which attract people all over the world.
It does not use raw materials that have been tested on animals.
It is an example of great customer service and experince.
Online delivery is another strength for the company to serve them the best they can and generate more revenue.
Lush does not have a fixed market subdivision; they attract their customer with superior marketing offers. Word-of mouth is indeed one of the most powerful marketing communication channels.
Lush communicates with the help of their products.
Lush uses the internet for communicating and marketing.
Lush believes in making products with fresh vegetables and fruit and without use or limiting the use of any harmful product or ingredient.
Lush always has the quantitative ingredient list (label) outside the product (usually on a chalkboard beside the product).
Lush prints their own labels and creates their specific fragrances.
Lush fragrances encourage people to buy their products.
Lush has a premium image, which encourages customers of the product value and promotes revenue as well.
Charity campaigns promote a sense of community to consumers.
The Lush website has a blog which gives an opportunity to both customers and company to communicate with each other.
Lush always provides a friendly atmosphere to its customers and its packaging promotes a healthy environment.
Lush has some of the freshest cosmetics in history.
Fair prices for customers are balanced by fair profit margin for the organisation“.
Lush stores are always located at high rent places so these places helps to advertise lush brand and promotes the brands luxurious status.
Lush is not as big of an issue but still it effect some times.
Many people buy cosmetics or soaps to give as a gift but lush packaging is not very attractive.
High prices of products that are premium are not affordable for lower class.
Many people cannot buy products because they are located in specific places, not convenient to purchase and less distribution outlets.
Pure products always has the issue of keeping them in fridge, so this always makes people sometimes leery before buying. Opportunities
The word’s growing and continued passion for fresh and healthy products for the skin and body is the opportunity for a lush to sell products.
People are passionate about lush products and fragrances. Every lush idea is coherent and aligned with their passion.
Lush cosmetics and WSPA partnership to help endangered organ-utans may help people to give more favour.
Almost all people use handmade creams, cosmetics and soaps.
Increasing rate of store numbers is also an opportunity.
Economic recession is a big threat for all companies including lush. Other competitors like MARK and AVON are also in a way of success. Body shop is also a big challenge for lush. Even though the Body Shop have higher prices than LUSH people are crazy about it and like to purchase the body shop’s products.
Product: Customer’s satisfaction and company’s allegiance with customers The major tenant of Lush is social responsibility, with products that are designed to attract not only loyal base of customers but in many cases attract new customers by using it’s activism as a catapult to create buzz on new products. They are passionate about the environment and promote campaigns that encourage environmentally friendly behavior(for example their discontinued use of palm oil in their products when they viewed the market to be corrupt.). They focus on producing, 100% vegetarian (and over 70% vegan) products for bath, hair and body that are fresh, made with natural ingredients, not tested on animals and minimally packaged (widely known as the “naked” campaign, where the company focused on using post-consumer recycled paper, recyclable and biodegradable products whenever possible, if they cannot get rid of the packaging at all.) Lush factories receive fresh produce every day, in much the same way as restaurants continually receive fresh produce, and use it to manufacture products right away.
With care and passion, Lush adds value that matters to their customers on a socially conscious level for example, by using fresh, natural ingredients in their products therefore offering a specialized product, by promoting a no animal testing policy, environmentally friendly packaging, healthy products; and behaving as a voice of protest, usually causing interest in the company itself to their own benefit. Although Lush foucuses it energy on remaining “all natural” making over 300 different products that are usually approximately 2/3 are unpreserved ingredients. Lush touts that preservatives are poisonous by nature. They also focus on using minimal amounts of water because liquid products containing water require preservative due to bacteria potential of the environment.
So while Lush doesn’t commit to being completely natural (which would severely cut into “best before” dates on products) they do try to stay as close as possible by holding the policy that products may only contain two kinds of preservatives; methylparaben and propylparaben, and even these are ingredients that have been proven safe and have been used in cosmetics and skin care for over 60 years. Using more and/or stronger synthetics would not benefit the skin. Unlike other cosmetic products, that do not advertise when the product was made, meaning could be anywhere up to 3 years old, Lush only sell their preserved products for up to 4 months after they’re made with the longest total shelf being approximately 14 months.
Price: Price consistency and variation
Lush offers customer’s good value while the company still making the profit. About 65% of their products sell under $10. Their most popular soap brand sells between $4 dollars to $6 dollars. They are famous as cosmetic company of a less-priced sensitive, sophisticated customer, and associated with luxury.
Generally, Lush products have usually priced less compared to other cosmetic companies like Body Shop but more than the price of local competitors and supermarkets. Many of their products like variation of soap and have different designs, it is priced by weight, not per item or product. It is also a more for more product line. The product offer high quality, and gives prestige to the buyer. The price difference exceeds the actual increment in quality.
Place: Different outlets distributing, less delivery charges, and free at some extent Lush are now trading 43 countries around the world. There are more 1,000 stores globally within ten years in business. Lush made a multi- channel strategy. They ran a mail order operation and sold its product online. With a wide range of products, they used a mail order catalogue for cross-selling products to their existing customer. Most of Lush stores are located in prime areas and they are very particular with their location. They choose location that is in the high end-business/ shopping area. Promotion: Proper advertising and fair products
Lush has no marketing department and they do not need one. Word-of-mouth is one of the most powerful marketing communications of their channel. In Lush, everyone is a marketer and everything communicates. The companies advertise little through media such as TV. They advertise through its products, people, website, and mail.
Lush is very socially responsible company with their customers they serve for example; in Canada alone, they support ten charities:
1) Earthroots-Lush helped with the lake Algonquin Logging legal fees. The Ogoki forest in remote Northwestern Ontario is home to the threatened Woodland Caribou.
2) Sea Shepherd- Lush aided in efforts to end the Canadian Commercial seal hunt. Sea Shepherd has been at the forefront of depending seal pups against a brutal and senseless government subsidized slaughter for over thirty years.
3) The International Fund for Animal Welfare (IFAW)-Provided funds towards protection on polar bear trophy hunting. Campobello whale hunting and marine rescue. Dedicated to improving welfare of wild and domestic animals by reducing commercial exploitation, protecting wildlife habitats, and assisting animals in distress.
4) 4 Paws Ability-Sponsored a dog’s training, so it could be placed with a young child. A mission to enrich the lives of people with disabilities by the training and placement of service dogs to provide individuals with companionship and promote independent living.
5) Reach for the rainbow-Help provide equipment to disabled children, it develops integrated opportunities that enrich the lives of children and youth with disabilities, their families, and the communities in which they belong.
6) Homeless Garden Project-provides job training and transitional employment to people who are homeless in Sta. Cruz County.
7) SARS-The Small Animal Rescue Society of B.C. is committed group of volunteers dedicated to the rescue, rehabilitation of homeless or unwanted small animals throughout the province.
8) Odd Squad Production Society-sponsoring a documentary on gangs and guns documentary and school education program.
9) Camp Summit-aided in sending 12 under privileged campers to camp-Squamish BC.
10) Camp Goodtimes (Canadian Cancer Society)-is summer camp program directed at providing camping experiences for kids, teenagers, and families living with cancer.
Lush takes a consultant-based approach to sell their products; their associates are expected to give each customer at least five product demonstrations per visit. They are also asking customers about the skin and hair type so that they can recommend the right product and to give a very good experience for the customer. Lush has developed more interactive format for their customer and get a free consultation of their skin.