British retailer The Body Shop International plc will shed its inhibitions about marketing for the first time in its 24-year history with the launch by Christmas of an e-commerce site.
An estimated $9 million will be spent initially on marketing bodyshop.com in the United States. This is about 60 percent of the initial investment in Body Shop Digital, a Body Shop alliance with Japan’s Softbank Venture Capital.
But the decision to embrace marketing is said to have upset Body Shop co-founder and shareholder Anita Roddick, an entrepreneur known as much for her animal-friendly, social and environmental campaigns as for her preference for word of mouth for pushing product.
“As a matter of fact, Anita was absolutely dead-set against any advertising,” said Patti Purcell, chief operating officer and chief marketing officer at Body Shop Digital. “I’ve spent quite a bit of time with her over the last six months and she understands, especially here in the United States, that we have to do this.”
The planned focus for the bodyshop.com is retention.
“Since we already have a strong brand and we do have consumers who buy the products, our emphasis will be more a retention-based strategy, from a marketing perspective, than it will be acquisition,” Purcell said. “We will be doing things to acquire customers, no doubt about that, but I would say the greater share of our marketing dollars will be spent in developing programs that emphasize retention and viral marketing.”
Most of these programs will reward customers for repeat purchases. Affinity measures for both online and offline stores are on the agenda, plus the inclusion of online purchases in its existing loyalty program.
Incentives for customers who refer traffic to the bodyshop.com are among the elements of viral marketing whose exact nature is under wraps. Other marketing efforts include partnerships, public relations, local promotions, guerrilla marketing around events and regular advertising.
Targets of this marketing drive for the new U.S. site typically are upwardly mobile women who are college-educated and fond of the outdoors.
“We also have a category that we’re calling the wise women,” Purcell said. “These are women who are a little bit older, who once used the products but stopped because the brand wasn’t relevant to them anymore. We’re going back to that market again. They’re usually in their late forties or early fifties, often in their sixties.”
Headquartered in Little Hampton, England, Body Shop reported a 3 percent growth in worldwide revenue to a little over $1 billion last year. It has a catalog and 1,730 stores worldwide, 410 of them in the United States and Canada. But U.S., U.K. and Japanese sales were down.
“In both the U.K. and the U.S.A, where comparable store sales were down 4 percent and 3 percent respectively, our Christmas offer was not strong enough,” said Body Shop CEO Patrick Gournay in the 1999 annual report. “This had a significant impact on the trading performance in the second half.”
The setup of the e-commerce alliance with Softbank is aimed at boosting the Body Shop’s bottom line without reflecting any potential losses in its own books. Body Shop Digital, based in Seattle, will open a separate e-commerce site next year for the United Kingdom, followed by a gradual global rollout.
Body Shop Digital is 59 percent owned by Body Shop International, and 24 percent by Softbank, which is the sole financial investor in the start-up phase. The rest of the equity is reserved for employee stock options and franchisees.
Body Shop is aware that the physical stores could view the Web site as competition. (Body Shop owns 90 percent of its U.S. stores. The rest are owned by franchisees.) Hence the decision to have store-specific, informational Web pages with a regional calendar and news of event sponsorships or promotions.
The ubiquity of Body Shop products across all retail channels will further reinforce the complementary roles envisioned for the site, catalog and stores, according to Purcell.
Both online and offline stores will carry the same product line, 40 percent of which is expected to change this year. Talks are on with unspecified companies for fulfilling orders through regional centers across the United States.
“You can touch them at Body Shop [stores], and that is why it’s so important for us to be able to reach into the stores to allow customers to buy online, return in the store, or in the store swap it for an online product,” Purcell said. “Part of our customer strategy is to make sure that it’s absolutely seamless.”