Why Brands Fail: A Cautionary Tale

A “totally avoidable tragedy” is how David Boynton, former Global CEO of The Body Shop, describes what went wrong for the pioneering ethical beauty retailer, which is closing nearly half of its 198 UK stores after collapsing into administration in the UK last month.

Sadly it’s an ongoing trend in the UK, with Matches Fashion axing half its staff after going into administration and Ted Baker preparing to appoint administrators.

There’s no doubt retail is a tricky business these days, especially if your operating model is dated. It’s easy to imagine The Body Shop being late to the party in terms of its online offer, which would have then hit hard during the pandemic when sitting on a nationwide store footprint out of commission, followed later by supply chain issues.

But that’s not the full story for me.

I loved Anita Roddick, the founder of The Body Shop. She’s a critical part of what made me feel good about following a path into business and finding my feet as a leader in my style as a woman. I especially loved her candour when she talked about the business she created from her kitchen table back in the 70s. At heart she was an entrepreneur, she wanted to change the world for the better, face and body products were a convenient vehicle for this, it could just as easily have been something else.

And that’s what made The Body Shop compelling as a brand. You bought an ethos, not just their Vitamin E cream. Although that was pretty good too. Product innovation was prolific and it often had a very personal story. Anita visiting a local community in a far-flung place, galvanising local co-operatives, contributing to their local economies, often lifting standards for women and children in the process. Anita had a mission and multiple causes for us all to learn about and get involved with. It was restless, dynamic, messy and magnetic.

It’s like everyone else now.

And that’s the problem in a nutshell. With no new story to connect with modern consumers and no meaningful heartfelt connection with its past, we don’t know what The Body Shop stands for and why to buy from them.

This is fatal at a time when the beauty and body care industry is booming and competition is savage – largely led by monopolies at one end of the spectrum and niche players at the other. Your average beauty buyer is now far more sophisticated with a working knowledge of Korean skincare routines, key ingredients to look for and a keen eye for what’s new and novel on TikTok.

If The Body Shop wants to grow again, it’ll need to get back to basics in delivering a clear proposition, a compelling story, more innovative product development and some savvy marketing. All very doable, but only with a bold market-facing vision, an innovative operating plan, and a renewed brand.

I’d love to help as my regard for The Body Shop runs deep and it could so obviously be amazing again, as well as be a credit to Anita as it once was.

For those looking to avoid the death rattle of stagnation, here are few thoughts.

Recognise your lifecycle stage

Better to predict it of course, but if you’re not regularly contemplating what could knock you off track then you’ll inevitably suffer. The signs are always there and the cycle is predictable. Even Amazon can’t afford to be complacent and it isn’t (frighteningly so, depending on your ethics).

As part of any company’s regular Strategic Review cycle, I recommend it begins with writing an obituary for the organisation with an accompanying post-mortem of all the decisions that led to its demise. This kind of sobering exercise provides a platform to shake the business into action and create a sense of urgency to change.

Be ready to transform

Understanding where you’re at and being ready to change aren’t the same thing and aren’t to be confused. We all dislike change, especially if it means giving up what’s comfortable in favour of the unknown.

Loss aversion is a real thing and it takes strong leadership to embark on a walk through what one of my old HBS professor called ‘the valley of doom’ i.e. a journey often marked with doubt, setbacks, possibly sabotage and a midpoint where many give up because things seem too hard and the destination too far away.

Then you’re out the other side with a whole new cycle of renewal and growth before the wheel inevitably turns downwards again. Far better to change on your terms in your timeframe than have it thrust on you when you’re under-prepared.

Connect with your roots

Almost all businesses start with an idea, attitude or ethos that helped make them successful. Some are fortunate enough to set sail with all three (Patagonia being an easy win of an example). Once you’ve identified what could be your demise, and gotten your head around changing, it’s time to identify what’s special about you and connect it with your marketplace and customers of the future.

A bit of soul searching and excavation often uncovers truths about you that can fuel your success and inform the story of your transformation, not just the strategic moves you’ll make to get there.

It’s a given that you’ll also be working with research and data, possibly to the point of being waterlogged. I’m with Steve Jobs when he said “I never rely on marketing research. Our job is to figure out what (the customers) are going to want before they do…to read things that are not yet on the page.” Insight data isn’t the same as foresight data, which takes a more creative kind of reasoning, thought experimentation and leaps of imagination. Which is often how businesses begin and another reason to connect with your roots.

Tell your story in your own way

By this point you should have a strong understanding of what needs to change and the requirements involved, as well as a deep conviction for who you intend to be and why it’s critical to your future. These are all the elements needed for leadership to create the drive and momentum needed to single-mindedly break into its next cycle of growth. Telling a story that will galvanise, inspire and connect with its people, shareholders and customers alike. This is your NASA ‘I’m not just sweeping the floor here, I’m putting a man on the moon’ moment.

Do the work

The most successful companies get sh*t done efficiently and productively. They also measure themselves routinely, transparently and loudly to hold themselves accountable. If you’re not doing the same your success-filled days are numbered, but this is only half the story.

Companies fail because they under invest in critical growth-producing innovation, technologies, processes and systems, and because they don’t put the work into developing the right operating structure, skills or competencies. I’ve lost track of how many companies I’ve seen lose focus and impact because they weren’t ready to make the decisions and changes needed to follow through on their vision and plan.

You can’t innovate your way to growth without investment funding and you can’t create that funding without operating a tight business. Obvious to say, much harder to deliver in practice when decision consequences come into play. Especially in a general shareholder return-driven environment where short-term gains are often chased at the expense of long-term value creation.

The Body Shop is now in the hands of Aurelius Group, a private equity investor set up by ex-McKinsey partners, focused on “sustainable value creation … achieved through operational improvements”. With their AUROM (Aurelius Operating Model) and Operation Task Force model it’s clear where their emphasis will be.

Once the business is operating more efficiently, the more fundamental question will be do we want to buy what they’re selling? A brand question if ever there was one.