MERCH ESSAY

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  • RT522MERCHANDISING AND RETAIL CONSUMPTION

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    JENNY HAM 13809125

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    MERCHANDISING CASE STUDY ON LUSH COSMETICS

  • Executive Summary

    This report is to examine, analyse and explore the merchandising techniques used by high street retailer, LUSH Cosmetics. In 2014 the company reported sales of 20 million at their 106 UK stores (Campbell, 2014), the company highly represents ethical and environmental respon-sibilities, which is a key factor in the creative design of their stores, as well as the ingredients used in their handmade products. The report will be supported by primary research and sec-ondary research, involving the summary and collation of existing research (secondary) and per-sonally collected research such as floor plans of the specific store investigated, photographs and interviews (primary). Some of the key factors that are to be examined are as follows:

    -Brand identity-Store layout and size-Merchandising techniques: Shop Display/ Window display/ Product design-In store etiquette -Competition -Website design-Ethical responsibility -Demographics

    Upon the exploration of these subjects, a correlation between them will be identi-fied which will demonstrate how LUSH run such a successful business in our cur-rent competitive business environment, LUSHs concentrated group of demographics and niche market as well as their moral standing is a valued subject throughout the report.

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  • LUSH MERCHANDISING REPORTLUSH was founded in 1995, the cosmetics company uses organic fruit and vegetables, and es-sential oils to create a wide range of fresh beauty products. LUSH are represented by their ethical behaviour and this comes into motion in many different forms. They are severely against animal testing, and avoid buying ingredients from companies that they dont trust, they also believe in us-ing as little packaging as possible and putting the face of the person that handmade the product on the front. They strongly believe in protecting people, animals and the planet, this can be seen in the charities that they support, and through their Charity Pot product, in which 100% of the purchase price goes toward humanitarian, environmental and animal rights campaigns that are local and global (lush.com). LUSHs philosophies are strongly represented via their brick and mortar stores and staff, in which they work hard to create a happy and inviting environment for their customers, the companies hard work payed off when they won the Observer Ethical awards 2014, for Best in Busi-ness, (thegaurdian.com, 2014). LUSH is a highly successful company, with 830 stores in 51 coun-tries, in 2012 it was reported that LUSHs profits rose by 5 million to 26.2 million, the company planned further expansion and an increased online presence to better their company (Bridge, 2013).

    LUSHs founders, Mark and Mo Constantine and their friend Elizabeth Weir (now LUSHs retail direc-tor), are major factors in the foundations of LUSHs honest and transparent identity, the design and store concept, products and ethics were inspired by the groups personal beliefs and favourite places and desire to keep the business personal, LUSH have been successful in keeping the company passionate and close to home, so to speak, they own only a small number of factories where the majority of their products are hand made with simple labels that inform customers of the ingredients, how to use it and who it was made by, unless the product is in the Naked range in which packaging is not required (Teather, 2007). The demographic for LUSH is between the ages of sixteen to thirty-five, women in their late twenties are thought to make up a large majority of customers, many of their products are feminine and dont appeal to the male gender (Hisry, 2013), but in contrast to that, LUSH also heavily cater for men, featuring The modern mans guide to grooming on their website, along with How to get the perfect shave, complimented by products they sell in store that are aimed at the male demographic, (LUSH.co.uk). LUSHs brand identity is certainly centred around ethics, and this is at the forefront of most peoples minds when thinking of LUSH, their green policy has been described as holistic in their approach to business ethics and other initiatives, for example, their limited use of packaging, and their sustainable sourcing of raw materials, LUSH are strongly against animal testing and are careful to resist involvement with companies that do conduct testing on animals (Marati, 2012).

    The bricks and mortar shop is a place in which the retailer can utilise space and planning to create a selling atmosphere that reflects their brand whilst successfully creating an environment that is easy for customers to shop and for retailers to sell. Mintel (1999) created a group of principles, as grounding for a successful shop design, to name a few that can be applied to the layout of a store,customer flow and space utilisation, a retailer must use their space practically to enhance the ease and flow to make the customers shopping experience as pleasant as possible, Accessibility to all, Infrastructure and Mood and emotions, these elements are all valid additions to a stores lay-out success, any contribution towards the customers end experience is a good contribution.

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    PAGE 1

    EXECUTIVE SUMMARY

    REPORT: PAGES 3-6

    MERCHANDISING CASE STUDY

    RESEARCH: PAGES 7-15

    APPENDIX 1/ FLOOR PLAN & RESEARCH PHOTOGRAPH/ P. 7-11

    APPENDIX 2/ INTERVIEW WITH LUSH EMPLOYEE/ P. 12-14

    APPENDIX 3/ LUSH EMPLOYEE STATEMENT/ P. 15

    PAGE 16

    REFERENCES

    PAGE 17

    BIBLIOGRAPHY

  • used and the chalk boards were an easy way to tell customers what was in store, considering the products were made fresh everyday, and even though they have the ability to outsource, LUSH chooses not to, every shop is customised and the not only are the products handmade but also the furniture, handmade by the same team. Grant also describes the deli feel to their displays,

    Inspired by fruit markets, we pile our Bath Bombs high in crates like apples, na-ked and ready to be picked up! we sell our soaps like big rounds of cheese []. Hav-ing naked products means we can avoid excessive waste and also create beautiful dis-plays that customers can interact with. We love that customers can come in and pick up, smell and choose [], so the design is catered around this. (McAndrew, 2014, pp. 5-6)

    As seen in Fig. 12 , the displays are made up of LUSHs Naked range, more than 60% of LUSHs products are in this range. Naked products are concentrated solids that need little to no packaging (Ellis, 2014), when packaging is used, they are normally plain black/white pots or bottles (Fig.11) which are made from recycled materials and are recyclable. LUSH also has a self sustainable scheme in which they ask LUSH customers to return 5 pots or bottles in return for a free fresh face mask, in hope of eventually having their own plastic supply made out of the recycled product packag-ing (LUSH.co.uk). LUSH have special requirements for some of their displays, where they are using fresh fruit and/or things for product sampling that need to be kept cool (Fig.8), according to a LUSH employee, these types of displays needed to be on ice all day which required occasional changing and upkeep, the displays are often at the front of the shop, in which customers are instantly faced with fresh goods in a cool condition ready for sampling (Appendix 2). Along with a fresh feeling upon entering a LUSH store, customers are also faced with information on the latest charities and cam-paigns LUSH are supporting, this links heavily with their website where all of the information is pro-vided for customers to read up on, issues such as animal testing, their Anti-Shark-Finning campaign (LUSH Japan), their Bullfighting campaign (LUSH Spain) and their Fur Free campaign (LUSH Hol-land), LUSH has a great number of assets which translate well into their website design, their image has a contrast between bright colouring and the simple black and white and natural wood, natural packaging. Recently LUSH underwent a website redesign, in which the site was transformed from a cluttered, colourful, in your face lively design, to their simpler side, of black and white, fresh and calming, which seems to coincide better with the things that LUSH are serious about (Steven, 2014).

    Embracing online presence is another way that LUSH communicate with their customers, LUSH runs a Facebook page and Twitter account, as well as an Instagram account, in which every store has a personal account for local customers. LUSH also have their own maga-zine, The LUSH Times, released every few months, the magazine is made from recycled mate-rial, and includes the companies new products, news and feature articles, (LUSH.co.uk, 2014), LUSH use social media and word of mouth as marketing, and use the quality, service and brand identity to create loyal and passionate customers that want to return, LUSH do not use any type of paid advertising to market the stores and products (Appendix 3., Doughan, 2013).

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    The Colchester branch of LUSH in Essex has a long narrow space to work with, as depicted in Fig. 1 (LUSHs floor plan), it can also be recognised that this store has a free flow layout, ac-cording to McGoldrick (2002) the careful design of a store layout is to make the best use of the space provided, to manipulate traffic flow and maximise exposure to the merchandise, in a free flow environment, the shopper can be given more freedom in direction between fixtures, this can encourage browsing and be visually pleasing, but this can also be negative due to an increased risk of confusion on the customers part. Due to the long narrow space in this particular LUSH store, the displays have been mostly positioned along the outsi