The Body Shop’s woes cannot be blamed on the economic crisis alone

By Katie Bird

- Last updated on GMT

Related tags Body shop Anita roddick L'oréal The body shop

The Body Shop needs a health check, judging by L’Oreal’s 2008 financial results. The brand reported a sales drop of 2.3 percent, not accounting for new stores opened during the year.

The France-based cosmetics giant has blamed 2008’s poor performance on a difficult economic climate, particularly during the fourth quarter, in some of the The Body Shop’s most important markets including Great Britain and North America.

However, the economic climate is not the only problem the brand faces.

In the past few years competition within the naturals market has intensified and the brand, which was once a pioneer within the sector, is falling behind.

Bought by L’Oreal in 2006, the first Body Shop retail outlet was opened in Brighton, UK, by Anita Roddick in 1976.

Her ethical ethos, focus on natural ingredients and ban on animal testing were undoubtedly visionary at the time, but the marketplace has now changed and the brand cannot afford to rest easy, as this year’s results illustrate.

Animal testing is now outlawed for all finished cosmetics products, with a ban on ingredients testing coming soon. So this can no longer serve as the brand’s unique selling point.

In addition, the number of brands that are both accessible and affordable using natural and organic ingredients has ballooned, even supermarkets are getting involved.

Not only does this mean The Body Shop no longer stands alone, it has also brought with it a focus on certification to weed out those brands simply riding the green marketing wave.

Although many of its products contain organic ingredients and there is definitely a focus on all things natural, the lack of certification provided by the brand may put off the more discerning consumer.

Furthermore, the brand is by no means alone in its focus on fair trade and charity campaigns either – Avon, Estee Lauder and M.A.C Cosmetics are all involved in well publicised charitable work, to name but a few. And the growth of fair trade means the brand does not stand alone here either.

The very fact that the company was bought by L’Oreal may also have alienated a number of its loyal followers.

After all, Roddick once famously said: “I hate the beauty industry. It is a monster selling unattainable dreams. It lies. It cheats. It exploits women."

Avid fans of such rhetoric are unlikely to have been impressed by the move to sell the company to L’Oreal, one of the largest and most powerful cosmetics conglomerates in the world.

With the publication of 2008’s results, L’Oreal has recognised the need to re-energize the brand. It hopes that a new communication strategy based on the tag “Nature’s way to beautiful” will help the brand ‘reassert its philosophy as a natural and ethical brand’.

However, L’Oreal needs to remember that the marketplace has changed and competition is much tougher. So far the company has failed to take the pulse of change, and it ignores the question of certification at its peril.

Remarketing the brand may not provide the answer. The Body Shop will need a much stronger prescription if it is get back to the market leading position it once enjoyed.

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