Retail Week talks to THG Beauty chief executive Lucy Gorman about the future of direct-to-consumer businesses, loyalty schemes and her time at the business
Lucy Gorman first joined the beauty division at THG as a university student on placement in 2012. Ten years later, she is the chief executive of THG Beauty and describes her time as the CEO as “a whirlwind”.
Before being made the boss of beauty in September last year, the 31-year-old headed THG’s nutrition division for almost five years, leading the global rebrand of MyProtein and launching sub-brands such as Myvitamins and Myvegan.
Gorman shares her thoughts on running a DTC business, loyalty schemes and leading the online beauty market in the UK in a challenging macro environment.
With high streets seeing a boost in sales, where do you think DTC is headed?
“We talk about consumers going back to the high street but I think the structural shift to online will continue. There’s obviously been a huge shift to online throughout Covid, when the high street was closed, some of that has come back over the last 12 to 18 months but we’re still exactly where we expect to be on the trajectory of ecommerce.
“DTC played such a huge part in people’s lives during Covid and I think, while the high street will always play a key part in that growth, the long-term growth opportunity remains in ecommerce.
“That said, as you scale a brand, it is important to have those offline touchpoints with consumers to build brand equity and credibility. We are certainly doing more offline activations than ever before this year. Pop-up stores in shopping centres, for example.
“We are looking at what omnichannel means to us and what that could look like going forward. We may look to relocate and upgrade some of our Lookfantastic stores but that’s definitely not about becoming an offline retailer. It’s more about having a space to host activations and connect with consumers and influencers on a more emotional level.”
How important are loyalty schemes for THG Beauty?
“Loyalty has been a really key focus for us. We’re probably a little bit late to the market with our loyalty scheme. We launched Lookfantastic Beauty Plus in October last year and we saw more than a million people join that scheme across six months.
“That’s a real success when we look at all the metrics and KPIs. For those customers that have joined the loyalty scheme, we’re seeing them shop more often, spend more and leave more reviews, which is valuable to us from a conversion support perspective across the board.
“Loyalty is something that we are really leaning heavily into and the ambition going forward is how do we make that even more exclusive? How do we make more and more of our initiatives, offers and prices exclusive to loyalty customers, with also a big focus on pushing those into our app ecosystem? I think what you’ll see us do over the next six to 12 months is similar to what you’d see from a Tesco Clubcard, for example.
“We want to have more and more offers and value associated with just those that are part of the loyalty scheme to incentivise more and more people to sign up.”
Subscription boxes are a big part of Lookfantastic’s business. Are there any new investments you’re planning in that area?
“Probably not. I think it’s fair to say that subscriptions across the market have had a more challenging year. Subscriptions are the first thing that people are likely to review in the current macroeconomic climate. It’s been quite challenging.
“It’s still great for us from a customer acquisition perspective and those customers who are subscribed continue to spend more on full-size products. But it’s probably not an area that we would want to be spotlighting at the minute. We’ve got some great requirements for our advent calendars lined up for Q4 but it’s more of a crusade rather than being anything particularly innovative.”
Who do you identify as your biggest competitors in the UK?
“We look at different people for different things. We are by far the leader in pureplay online beauty retail in the UK, with a market share in the region of 35% to 40%. Undoubtedly, the acquisition of Feelunique by Sephora is something that we are very aware of and staying close to.
“As of 2021, I believe we’re about five times the size of Feelunique in the UK. I don’t doubt that some of that growth has been accelerated by the acquisition of Cult Beauty and the supply chain excellence that comes with that and the brand ecosystem. But I’m pretty confident that we’ve got a real market-leading proposition in Lookfantastic and Cult Beauty combined.”
No comments yet