Adore Beauty & The Australian Beauty Market | In Practise

Adore Beauty & The Australian Beauty Market

Former Merchandising Manager at MECCA Brands

Learning outcomes

  • Adore positioning vs MECCA and other retailers
  • Why Adore is unique
  • How Adore engages customers online
  • Range and private label opportunity
  • Core challenges for Adore going forward

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Executive Bio

Former Merchandising Manager

Former Merchandising Manager at MECCA Brands

The executive has over 12 years experience in the beauty industry in Australia. She spent over 10 years at MECCA Brands in the merchandising side of the business in both buying and supplier management roles. She is also an Adore customer and can speak to Adore as a competitor and customer.Read more

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Disclaimer: This interview is for informational purposes only and should not be relied upon as a basis for investment decisions. In Practise is an independent publisher and all opinions expressed by guests are solely their own opinions and do not reflect the opinion of In Practise.

I would love to understand a little bit more about your background both broadly and as it relates to Australian beauty and cosmetics and then Adore Beauty?

I have been in Australian beauty for over 12 years. I have predominantly worked at Mecca Brands from the merchandise side of the business within buying and supplier management. I have only worked at Mecca and am super familiar with the broader Australian beauty market as well as Adore being a major competitor and it being a relatively small market compared to the US.

What are some of the strengths and weaknesses of Adore?

Adore have obviously been around for a long time but have done a fantastic job over the past three years with their connection to the customer. The major beauty players have different marketing strategies. Mecca and David Jones go after that high-brow premium customer, whereas Adore try to connect to that every day customer. A lot of their content is about how to become the customer's best friend and producing it in low-fi ways such as iPhones. They demonstrated that in their free to wear TV campaign which ran for three days during Covid. Their content over the last 12 months has increased massively. They also did it through their podcasts where they have conversations about beauty, life and how people date on Tinder. All this gives them a long connection to the everyday person.

Any other strengths you care to mention?

They have a very strong trade calendar which is both a strength and a weakness. They run many promos, offer samples and regularly do 20% off deals, which drives sales.

Do you want to jump over to weaknesses, then we can dig more in depth?

Coming from a retailer which has predominantly dealt with exclusive brands, the issue is that you can access their brands elsewhere, so aside from that connecting to the customer, most of their brands are non-exclusive. They also lack a proposition, aside from the fact they have them all in one spot, which is obviously a strength. They do not have a unique point of view but they do have a connection to the customer, which is what will bring them back.

Competition in the retail space makes people give up the economics to get exclusives; is that a risk in the Australian beauty retail industry?

It depends which retailer. I am only privy to the contracts they had at Mecca, but the ability for Australian beauty retailers to access brands that are at their competition is low, for any of the exclusive brands. Any brand coming from the US to Australia – the big players like David Jones – will not be able to access them because they are already locked up in other agreements. In saying that, there are new and emerging brands which are changing over the past two years because of new trends.

There are brands which are not yet locked up in exclusive agreements which are opportunities, but the D2C channel, unlike bricks and mortar, is not the exciting channel which international brands are looking for.

Is Adore at a weak point because they lack other geographies that Sephora and Mecca do, and cannot ask XYZ country to do an exclusive with them in Australia?

To a degree yes, but the lack of physical stores is their biggest limitation. Adore are winning in skin care but do not have a super strong makeup brand or product offer. Their best sellers from a makeup point of view are mascaras and other things which need color matching.

Why is Australia under penetrated online in beauty compared to the US and UK which are similar demographic markets, in terms of income levels?

When you say less penetrated online, are you referring to the number of customers who are shopping beauty online?

The percentage of spend which is online versus bricks and mortar.

The US have an extremely sophisticated freight and transport system over a huge country, whereas Australia does not. Big US cities have same day couriers, in less than 15 minutes, delivered from one side of town to the other, super cheap, easily done in five seconds, whereas in Australia labor is expensive. Courier services in an immediate vicinity is possible but not across Australia which has nothing in the middle. To get from one end of the country to the other you need to have an expensive and sophisticated supply chain with warehouses in every state. Online is difficult in Australia because shipping is expensive.

Are large brick and mortar players well-established in Western Australia?

Yes, I would say so. When it comes to the bigger department stores, they are currently in a bad position. They are not investing in new stores and beautiful fit outs, definitely not on the West coast, but more broadly not in Australia outside of Melbourne and Sydney.

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