Lush – Here We Go Again…

Lush really are the enfant terrible of the British cosmetic industry.  Their latest attention seeking wheeze is to put on a display in one of their shop windows in London where an actress is supposedly put through the same kinds of things that animals in research labs have to endure.  An attractive young actress as it happens.  Oh and she is wearing a body suit that makes it look like she is wearing no clothes.  Right.  I suppose they wanted to use a balding, slightly overweight middle aged man but none was available.

I suspect that this stunt has more to do with fluffing up a brand that has become increasingly tired over the last few years than any anger over animal testing in cosmetics, which has never been particularly extensive in the UK and is now in any case illegal.  The issue certainly bears no relation to the pantomime display Lush are putting on.

Indeed as a publicity stunt it seems to have been very successful, getting them widespread coverage in the media and on blogs.   But I think they would have done better devoting their energy to improving their products.

15 thoughts on “Lush – Here We Go Again…

  1. Denise

    Drama, drama, drama…it’s all consumers seem to respond to any longer. I find this truly appalling, you can make a scene but mediocre product and be successful. I am clearly doing something wrong. Thanks Colin.

  2. Judith

    What is you favourite Lush product, Colin? Or, put another way, which of their innovations impress you? I find them too expensive in the current climate – everybody else produces ‘essentials’ and ‘basic’ ranges but they don’t. But I do like the idea of not paying for water – eg solid toothpaste tabs, solid shampoo, solid deodorants. The solid serums, body conditioners etc melt in hot weather so I think they’re only useful in winter.

  3. Joe

    Colin, Animal Testing is not illegal. Large companies like L’Oreal are constantly delaying the final push on the law being passed.
    What’s your issue with the products? Because they’re not beautifully (and wastefully) packaged or because they don’t use nasty chemicals?
    Lush is going from strength to strength, they are not tired nor mediocre and in my opinion I think any brand that is willing to make such a strong campaign against the cruel mistreatment of animals should be commended.
    I’d be interested to see which brands you recommend.

  4. Colin Post author

    Thanks for the comments.

    @ Judith – Lush have done lots of whacky things over the years and have come up with some products that have been very entertaining. I agree that trying to cut down packaging and transport costs is a good move. I don’t think their business would really allow them to cut prices very much. They carry a lot of lines and have the overhead of their retail outlets to cover. Personally I find the bright colours and rather strident fragrances don’t appeal to me, but I understand that is what a lot of people like about them.

    @ Joe – I can’t speak for L’Oreal, but if they are delaying the implementation of animal testing it is hard to see what their motive is. Animal testing is done purely to satisfy legal requirements and conveys no benefit on the cosmetic industry.

    I don’t know how Lush’s sales are going, but high street spending is not too healthly and Lush is in the mid-market which tends to be the biggest loser when the squeeze is on. It will be interesting to see if they are bucking the trend. My guess is that they aren’t, and this rather tawdry bit of self promotion is their idea of a response. But all that is purely speculation on my part.

    Where I am on firmer ground is the chemicals they use. They are neither more nor less nasty than anybody else’s.

    As to what I recommend. I think the BUAV have been very successful in their campaign to combat unnecessary animal testing so if it is important to you I suggest you stick to products that have been accredited by them. My blog post http://colinsbeautypages.co.uk/vegetarian-and-cruelty-free-products/ gives more detail.

  5. Ed

    @Colin
    “I don’t know how Lush’s sales are going, but high street spending is not too healthly and Lush is in the mid-market which tends to be the biggest loser when the squeeze is on.”

    Lush revenue is £272 million for 2011 (up 10%), with profits before tax of £21.3 million. They have 728 shops worldwide.

    UK revenue is £70 million – the second biggest segment after Asia, with £103 million.

    There may be some truth to your suspicion that Lush retail isn’t that healthy – Lush Retail made sales of £47 million and a loss of £1.5 million in 2011. Other UK revenue comes from the manufacturing operations.

    I recall Lush’s mailorder website was hacked in 2011 and they had to close it for some time, which won’t have helped the figures.

    On the international side, they had some problems in Taiwan in 2010 leading them to close all their stores. In 2011 they were affected by the Japanese earthquake.

    I think the PR stunt was clever – and it has certainly got people talking. I don’t personally rate the products, but I have met and interviewed ex-Lush staff who were all incredibly passionate about their former company and loved working there.

    Animal testing is more of an issue now as companies registering with the SFDA in China to import their products are paying registration fees that are being used to pay for the testing of their products on animals (according to BUAV).

  6. Colin Post author

    Thanks for those figures Ed. What an interesting story they tell! So as I thought the UK shops are losing money. I was also right in guessing that they don’t have any room to discount. And it turns out that they don’t have much cash to advertise either. No wonder they are looking for cheap ways to get attention.

    So there is a strategic dilemma for you. You have a brand with a loyal following and lots of enthusiastic employees, but your distribution method and cost structure make it hard to make a profit.

    I stick with my original suggestion. Find ways of generating more value for the customers. NPD is the solution, not PR.

    (Incidentally Ed, fascinating as all this is were you really up at 3 in the morning reading company reports? Work life balance?)

  7. Jean

    Joe
    Lush use the same chemicals as anyone else, they just have a full disclosure of ingredients policy and interesting ways of making solid products
    I cannot use their products because of the detergents they use
    The” soap” they make are all bars of detergents, not cold process soap

  8. Perry Romanowski

    Personally, I find the odor of Lush stores overwhelming. I can’t even walk past one of them without nearly vomiting.

    As far as their chemicals go, I know they still use Lauramide DEA in their body wash and hair products. DEA’s were removed by every major cosmetic manufacturer because of the perceived safety issue related to residual nitrosamines (causing cancer in rats) back in the late 1990’s. I always thought it was odd they still formulated with it.

    Lush is being hypocritical. Every ingredient they use has been tested on animals.

  9. Ed

    Hi Colin,

    I’d take the opposite view I’m afraid – you’ve got your 70 or so UK stores, with a largely fixed cost base, mainly comprising property leases and staff.

    If you can get some decent PR to increase sales by 10%, that’s an extra £7 million revenue – that should be more than enough to wipe out the loss for the year.

    The UK operation as a whole is profitable as it includes the manufacturing side – so you’ve got one Lush company making products and selling it to another Lush company that retails them through UK stores – the difference between profit and loss is essentially the price charged for this intra-company transaction, and that price could be arbitrary.

    Don’t forget, Lush had to close its UK website in 2011 after getting hacked – this may well have lost it a few million quid.

    We frequently see companies with mediocre products outsell companies with much better products. Why? It is all in the marketing, the PR, the sales, the packaging, the store placement deals etc.

    It certainly helps to have great products, but if a company is losing money, investment in NPD is a small part of the solution – what it really needs to do is sell more products with a decent margin, and a good PR campaign which provides an immediate uplift in sales with a minimum of upfront investment is a great way to do this.

    Work / Life Balance…yes pretty poor! I haven’t reset my jet lag yet, hence the early hours posting. We had the Lush figures from our last business plan, so figured I’d share them.

    They were a lot bigger than I thought before the research – good to see a nice British success story!

  10. Colin Post author

    Thanks Ed, generating an extra 10% of sales over 12 months for an already well known brand is one heck of a successful bit of PR. I think PR is something where the law of diminishing returns sets in pretty quickly. NPD on the other hand is basically about making your offering more appealing. For example, simply cutting the number of lines might help. Or adding a proper triple milled soap etc etc. That way you build more sales to existing customers and make yourself more likely to win over new ones.

    And as Perry’s comment shows, a lot of us just don’t like Lush products in their current form. Broadening their fan base might well make them an even more successful British company, which I would love to see.

  11. Ed

    Yes, I may have overegged the impact of PR on sales for an established brand – a 10% bump over a year is achievable for a small brand (which is my experience – approx equivalent to a 40% increase in sales for three months), but much more difficult for a company that already has awareness but needs to improve market share.

    In fact, Lush may have fallen into the trap of thinking that news creation PR – where your brand gets featured in the news section of newspapers, rather than in the beauty or lifestyle pages, will lead to extra sales.

    It rarely works, and of course there is a danger that it can completely backfire.

    The best PR is the sort that effectively communicates your brand values. Lush’s “Happy People Making Happy Soap” values aren’t communicated by the gory and sadistic torture of a young nude (body suited) woman in one of their shop windows.

    Serious ethical campaigning against animal abuse is the sort of thing you expected to see coming out of the Body Shop PR department in the 1980’s. As people have pointed out above, animal testing isn’t quite the live issue it used to be.

    Pretty much every brand in Lush’s space is against animal testing, and many go much further in terms of fair trade and organic credentials.

    Lush may have generated lots of column inches about its stunt – but could the nature of the publicity put off current and potential customers of its “happy soaps”?

    Colin, you may have hit the nail on the head when you described Lush as the “enfant terrible” of the industry. The stunt may have been less about pushing an ethical agenda, and more about developing a more edgy and interesting brand identity, attracting a younger crowd.

    NPD is of course important – and I think Lush could do with improving their products. But….Crabtree & Evelyn has a triple milled soap product and they have had rather a turbulent and loss making time of it – so products aren’t the be all and end all….although I can understand that formulators may have a slight bias towards that point of view 🙂

  12. Judith

    I agree with Colin – fewer and better products.

    Also, nicer pots and a non-irritating typeface.

    I think they’re good with scents. It used to be that ‘natural’ meant cucumber lotions (Body Shop) or geranium and lavender (Neal’s Yard) but Lush, B and Cosmetics To Go always tried to do something different and more complex with fragranced products. Sadly, there is a large customer base for vanilla/chocolate/candy fragranced products so they do them too. I’d like to see them stick all of those in a separate range for teenagers at lower prices, as I don’t mind paying more for the better stuff as long as it worth it. ie it works, and it looks as expensive as it is. After all, this is the beauty industry, not a farmers market.

  13. Colin Post author

    All good points Judith. You should be in NPD. (If you are in NPD, then you are in the right job. Obviously.)

Leave a Reply