In my role as a lecturer in Business
Studies, I am often asked who is my favourite female entrepreneur. My answer is
Anita Roddick, founder of The Body Shop, who tragically died in 2007.
Business women like Karen Brady and Jacqueline
Gold are often held up as examples of the best British female 'entrepreneurs'.
But I would argue that both Brady and Gold were not entrepreneurs at
all, having been born with ‘silver spoons’ in the mouths, and given ready-made
successful companies to run (with a lot of help from hired managers and business executives!!)
But Anita Roddick was a genuinely successful
entrepreneur in the true sense of the word. She opened her first shop
in Brighton in 1976, with the goal of earning a small income for herself and
her two daughters while her husband was away in South America. This was after
experimenting with her own home-made natural products created on her kitchen table. She wanted to provide quality skincare products in refillable
containers, sold with truth and integrity, rather than marketing hype.
Her business was so successful that by
1991 the Body Shop had 700 branches, and Roddick was awarded the 1991 World
Vision Award for Development Initiative. By
2004 the Body Shop had 1,980 stores, serving more than 77 million customers worldwide. It was voted the second most-trusted brand in the United
Kingdom, and 28th top brand in the world.
Many readers of my blog will be aware
that recently the Body Shop has run into serious financial difficulties and has ceased all its operations in the USA. At the time of writing it is in
administration in the UK, with many job cuts and store closures already announced.
So what went wrong? Can the Body Shop still
be saved? And if so, what action needs to be taken to rescue the company before
it shuts down altogether?
I recently read a fascinating article on this subject by several marketing academics, and I have reproduced the article below under Creative Commons license.
Darren Bugg
Editor, The Customer Service Blog
....................................................
We are in an era of brand activism and
conscious consumerism. More than 70% of consumers expect brands to publicly stand
for socio-political issues.
And more than half of Australians
consider sustainability an important purchasing criterion. Experts also predict
a major shift in consumer attitudes with sustainability evolving from a
“nice-to-have” to a baseline requirement.
In this climate, The Body Shop -
promoted as a global beacon of ethical retailing - shouldn’t have failed.
However, in February, it entered administration in the United Kingdom. The
following month, The Body Shop in the United States and Canada filed for
bankruptcy.
The Australian subsidiary remains
profitable, boasting about 100 stores. But it is reportedly facing a "cash flow
crisis” with “unsustainable levels of debt” following the collapse of its UK
parent company.
The Body Shop was once a
ground-breaker
Founded by UK businesswoman and human
rights activist Anita Roddick in 1976, The Body Shop was a trailblazer of
cruelty-free products, fair trade and environmental sustainability.
It was as well known for its advocacy and ethics as its flagship products, including White Musk scent, Dewberry oil and peppermint foot scrub. The brand helped change 24 laws in 22 different countries by mobilising customers to campaign against animal testing in cosmetics. However, The Body Shop’s trajectory over the last two decades diverges sharply from its founding ethos.
The Body Shop sold - and then sold again
The Body Shop was sold in 2006 for 1.26 billion dollars to cosmetics and personal care company L'Oreal. The brand was abandoned by many loyal customers because of perceived betrayal of its core values. In 2017, The Body Shop was bought by
Brazilian cosmetics giant Natura for 1.7 billion dollars, which its CEO Ian
Bickley promised would start “a new chapter”. Natura then sold the brand to
asset management company Aurelius in 2023, just three months before its UK collapse,
for only 399 million dollars. This signalled significant value decline and
raised questions about the viability of the brand worldwide.
Activism fatigue
Countless brands are vying for
marketplace positioning based on social and environmental justice. This
saturation of ethical messaging leaves consumers fatigued and they’re likely to
tune out.
The most recent Gallup survey shows
consumer interest in brands engaging in socio-political issues is waning. What
was once an extraordinary point-of-difference for The Body Shop is now seen as
standard.
The Body Shop has also faced extreme
competition. Brands including Aesop, LUSH and Neal’s Yard Remedies emerged as
worthy rivals, leveraging credible ethical branding to attract eco-conscious
shoppers.
The Body Shop had the advantage of
being the first in its field but the sale to L'Oreal compromised its core
purpose and consumer connection. It struggled to recover its founding values
and was crowded out by competitors.
Dwindling brand bravery
Our research shows activism must be
backed by brand bravery to be credible in the eyes of consumers. In the past,
consumers supported activism aligned with corporate values. We found alignment
on its own was not enough.
A brave brand considers the greater
good, sticks to its core values, defies dominant norms, takes risks to be
unconventional and even controversial as a brand and shows resilience to setbacks
such as consumer backlash.
When The Body Shop opened in 1976,
cruelty-free products and ethical business practices were unheard of. It is now
challenged by competitors with more radical claims.
LUSH boldly deleted its social media
accounts, citing concerning impacts on young consumers’ mental health.
Considering potential revenue loss, as social media is the primary way to reach
Gen Z, this was a brave move.
Falling short of true transformation
Recent research shows how important it
is for brands to be authentic activists. Brands must practice what they preach.
The Body Shop originally did this well but consumer scepticism arose after
L'Oreal’s acquisition.
L'Oreal has not tested on animals
since 1989 but consumers’ distrust of the company’s ethical standards rubbed
off on The Body Shop.
Transformative brands must also lead
by example on both business and social fronts. The Body Shop did both in the beginning
but neither by the end.
Under Roddick’s leadership, The Body
Shop transcended mere profit-making and revolutionised the beauty industry.
However, it later became part of faceless global conglomerates and private
equity firms. While the brand initially served as a catalyst for change to
industry and consumption standards, cruelty-free products eventually became
expected of all companies in the saturated beauty market.
As a commercial business, The Body
Shop became estranged from its original customer base and failed to
meaningfully engage with a younger demographic.
It missed the mark on evidence-based
skincare products, which rely on scientific research and formulations - another
major trend. Consumers have also traded down to cheaper options, amidst a
cost-of-living crisis, as they must prioritise price over ethical claims made
by brands like The Body Shop.
Reclaiming an activist brand heritage
What should The Body Shop and other
ethical brands do? The UK business is trading in administration but remains
“fully focused on exploring all options to take the business forward”.
Our research offers several possible
pathways. The Body Shop needs re-energising as a brand leader on product
innovation, customer connection and social change. For ethical brands, a shared
focus on market and societal goals is essential to be transformative.
The Body Shop must seek to not only
reclaim its position as a leader in sustainability but adapt to survive in the
struggling retail sector. They could start by rebuilding customer
relationships.
The Body Shop has a history of
activism. This can continue and it can be more effective in achieving change if
it stays relevant and delivers on the brand’s vision long-term.
This means taking risks by adopting
innovative and unconventional promotional strategies and updating its messaging
to ensure it can attract the next generation of shoppers.
This article is republished from The Conversation under a Creative Commons license
Zoe Lee
Reader (Associate Professor) in Marketing, Cardiff University
Amanda Spry
Senior Lecturer of Marketing, RMIT University
Jessica Vredenburg
Senior Lecturer (Assistant Professor) of Marketing, Auckland University of
Technology