Peta Granger’s first job with Lush Fresh Homemade Cosmetics was a casual sales assistant position while she was backpacking in Europe. Having dropped out of a business degree back home in Australia, Granger found the inspiration she was looking for and has stayed with the company since.
Granger is now one of the directors of Lush in Australia, alongside Mark Lincoln. She has been heading up the local business since 2011 and has helped turn the business around from a low point five years ago. Last week, Lush was named retailer of the year at the Australian Retailers Association eftpos Australian Retail Awards.
Today, Lush Australia operates 29 stores with another two on the way, employs 450 people and turned over $36 million in 2014.
It was founded by a group of animal and environmental activists who didn’t want to leave their ethics at home when they went to work. You could also call them control freaks because the only way they could maintain such ethical standards was if they had their own business.
Today, Lush invests its own ingredients, sources them and manufactures around the world, including in Sydney. Lush products are sold in around 950 outlets in 52 countries.
There are three main pillars that the Lush business is built on. The first is we ensure absolutely none of the ingredients we use are tested on animals.
The second pillar is we seek to minimise our impact on the environment by using as little packaging as possible and by sourcing ingredients as ethically as possible. We’re really trying hard to create a more transparent and sustainable supply chain.
The third thing is we actively campaign on social issues we feel strongly about. We’ve campaigned about Guantanamo Bay, puppy farming, LGBTI rights, marriage equality and the treatment of refugees in Australia.
The first Lush store in Australia opened in 1997. Mark Lincoln and I were both brought in separately as agents of change.
Mark joined the business in 2005 and I joined in 2011 after I finally moved home to Australia.
My first job with Lush was as a sales assistant in the Dublin store while I was backpacking around 14 years ago. I thought it would be three months of work to earn some cash, but I ended up staying three years and managing the store.
Back home I had dropped out of a business degree, but here I was in Dublin managing a multi-million dollar store.
It was like running my own business, so I stuck with it. It was a more interesting and practical application than what I found at uni.
I ended up working in development and training with Lush in 40 different countries over seven years. I also worked very closely with the founders on things like improving the internal communication in the business. It was a privilege to work with them and they were really generous with their time.
Those first three years at Lush really helped get me started. I understood the shop floor and learnt about managing teams and individuals.
It was the start of the journey for me. I then got to working with some amazing and interesting people globally from different cultures and businesses of all sizes.
In Switzerland, a couple and their best friend owned three Lush stores and we would have meetings in their lounge room. Then I would go to Japan where there were 140 Lush stores.
Lush Australia has been on a bit of a rollercoaster ride since the first store opened in 1997. We’ve had huge highs and huge lows.
Around five years ago the business reached a low point. The business had to be turned around and quite quickly.
That turnaround happened four years ago and we’ve recorded growth of 20, 30, 40% like-on-like since.
It is never one magical thing that turns a business around; it’s hundreds of little things.
It was a little bit more internal for us. It was about tapping into our teams and listening to staff.
We’re constantly thinking about engagement. We do engagement surveys and the one big message our employees tell us when we ask them why they are here is the values and ethics of the business.
Our employees love giving their opinions and input and being listened to.
It helps us. They are quite an opinionated bunch, so having them in the room when we make pivotal decisions is really helpful. They are in contact with the customers every day.
They also take direction on many of our campaigns. They tell us if we’ve got to do something about a particular issue. There is quite a large LGBTI community in our business and so those issues are important.
I remember one employee said to me once it is not about wanting to sell something, it is about wanting to belong. We try to create a community within our business.
The other big thing is our approach to management in our stores. Our managers are very independent; they recruit their own staff, order stock, develop their teams and they have full access to profit and loss information.
They also have access to a share of profits and bonuses, which keeps them motivated.
We will open two new stores soon, one in [Adelaide suburb] Marion very shortly and another one in Werribee in the west of Melbourne.
Over the next year or year-and-a-half, our goal is to open another five to 10 stores.
We want to open much larger stores in Australia. Lush recently opened a 1000sqm store in Oxford Street in London and we want to replicate something like that in Australia
We’re also looking for the ideal location to open the first Lush Bar in Australia next year. Location will be key as it will also have a Lush store within it.
We have 12 Lush bars around the world and they offer quite a unique experience compared to other spas. We’ve developed a whole range of products and our own style of massage, which is choreographed to music that we have recorded and written ourselves.
We’ve just doubled our local manufacturing capacity at our factory in Villawood, NSW, which means we will easily be able to cope with the growth.
Lush is against any paid-for traditional advertising.
If you really think about it, the cost of that advertising is immediately passed on to the customer. We don’t want customers to pay for expensive packaging, or celebrity endorsements or advertising.
What we ask customers to pay for is to upgrade their products to fair trade or to support a women’s refuge in Ghana. Those are the sorts of things that are worked into our prices, not advertising.
We only ever use our own staff in our advertising, never models. And we would never photoshop or airbrush them or their bodies.
We do a whole range of things to encourage word-of-mouth marketing. Social media has been phenomenal; it creates a cost-effective way for a brand to tell a story.
Customer generated content has also been very helpful, whether it’s reviewing the products online or using YouTube and blogs. It has become our digital word-of-mouth.
We also like to get out in the community and go to festivals, expos and sporting events. We offered hair washing and styling at [music festival] Splendour in the Grass and we were at Gay Pride in Sydney, offering face masks and massages.
It’s about meeting the customers and talking to them face-to-face. And it’s about getting products on skin.
The other advantage we have is the smell from our stores. People think we pump it out but we don’t; that’s just what happens when you have so many unpackaged products.
We like to be able to use our business to actively campaign about things we care about.
To be honest, in the past year what has kept me awake at night is the disgraceful treatment of asylum seekers in Australia. I stay awake at night thinking about how we can use our business to improve things for them.
We have asylum seekers working in the business and we have run campaigns to debunk myths. I want to do more; to use our store windows, our staff, our website to help change the tide and change the conversation.
We have a business plan, but it is constantly evolving and extremely flexible.
We try very hard to be fast-moving and we develop our strategy with senior management, store managers and sales assistants around. We invite everyone in the business to challenge the plan.
Editor
Eloise is an experienced business journalist and editor, who has held senior editorial roles at SmartCompany since 2014. Prior to joining SmartCompany, Eloise was news editor at Books+Publishing, the trade press for the Australian book industry. Eloise has degrees in media and communications, marketing and business management, and political science. You can follow her on LinkedIn, and Twitter at @ellykeating.
