Ethical brands need more than point of difference

The Body Shop: parent L’Oréal has announced its intention to sell the beauty brand
The Body Shop: parent L’Oréal has announced its intention to sell the beauty brand

Ethical brands need more than just a moral positioning if they are to avoid the ill fortunes of The Body Shop and The Co-Operative Bank, which are both looking for new ownership.

More than a decade after its acquisition of The Body Shop, L’Oréal is reported to value the brand at e1bn (£850m). This is not much higher than what L’Oréal paid in 2006 – the £652m price tag equated to €992m using the exchange rate at the time.

Ethical and sustainable credentials are no longer a point of difference for brands, according to Gary Davies, professor of strategy and director of reputation, brand and competitiveness research at Alliance Manchester Business School. 

"L’Oréal’s strategy with The Body Shop, which was to make it even more mainstream, has diluted its uniqueness further," Davies added.

One reason for The Body Shop’s decline has been a lack of investment and innovation in the brand and its products by the parent, according to Chris Arnold, creative partner at Creative Orchestra and author of Ethical Marketing and the New Consumer.

"The area of trading and ethics has moved on a lot from a decade ago," he said. "Every ethical brand that was big ten years ago has had to redefine themselves. The Body Shop hasn’t." 

Mark Diamond, strategy director at Brand Union, explained that ethical brands need to "offer something more and be vocal about what they believe". 

He said: "The Body Shop’s Instagram feed, for example, is a confusing mishmash of make-up swatches and cuddling orangutans. There isn’t a strong, consistent message."

Once the hallmark of ethical retailing, The Body Shop has been overtaken by companies such as Lush. KPMG Nunwood’s annual brand rankings placed Lush at third and The Body Shop at 49th in 2016.

Diamond added: "Lush seems to have stepped in where The Body Shop has flopped, capturing the attention of consumers looking for a fun, independent and ethical beauty brand."

That said, a sale to the right company could do wonders for The Body Shop, experts believe. 

"Independent ownership would serve it well, as would a brand refresh," Diamond said. "The Body Shop is
a high-street institution with a noble cause that I think we all want to love." 

Meanwhile, The Co-Operative Bank, 20% of which is owned by Co-op Group, has had a tumultuous time since it almost collapsed in 2013. Earlier this week, the company revealed it was seeking a buyer.

Arnold said that the bank’s ethical stance was "good in principle" but it was never "marketed well enough and failed to engage general consumers".

Advice for big companies marketing ethical brands

  • Understand the ethos and purpose of the brand
  • Be prepared to align with the brand’s values
  • Constantly invest in and update the brand
  • Understand the values of the staff – they are the soul of the brand
  • Keep branding and marketing authentic; don’t be tempted to over-polish
  • Don’t turn the brand into a clone of your culture and processes – learn from it

Source: Chris Arnold and Mark Diamond

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