From the source: Kate Morris, Adore Beauty
As a university student, Adore Beauty CEO Kate Morris worked at cosmetic counters where she realised that most women found shopping at department stores a disappointing experience.
In response, Morris launched her beauty e-commerce site in 1999 from a garage in Melbourne at the age of 21. The site now stocks 200 brands with 14,000 products — the largest selection of cosmetic products of any retailer in Australia — and the business has an annual turnover of more than #30 million.
Morris was awarded the Business Innovation Award for Victoria at the Telstra Business Women’s Award in 2014.
Inside Retail Weekly: How has the past year been for Adore beauty?
Kate Morris: It’s been a smashing year for us, to be honest. It’s exceeded all our projections. We’ve grown quite a lot, it’s been triple figure growth year-on-year. There’s been lots of new hiring to expand the team and making sure that we build what we need to keep up the momentum. We’ve had some pretty fantastic new people join the team, too. We were at about 45 people a year ago and now we’re at 75.
We’ve had some fantastic new brands come on board with us that haven’t been online in Australia before, so that’s been pretty exciting for us and our customers – The Ordinary, Orbibe, Aveda and Olaplex.
We plan to keep that momentum going so it’ll be a lot more about driving growth for us. We feel the timing is right for us to start having a real impact on the beauty market. The trend we’re seeing globally is that there’s a decline in customers going to department stores, favouring specialty and online retailers instead. The time’s right for us to go for it.
We’re hiring our first ever CMO – that’s a big investment in growth – and we’re hoping this person will be able to drive growth over and above what we’ve already been able to achieve with the team that we have.
IRW: Tell me about the Adore beauty STEM scholarship and how you came up with the idea to launch it.
KM: We just closed applications for this year’s intake and so we’re just shortlisting them now. The successful recipient will receive money towards tuition and get a one month paid internship at Adorebeauty, where she will work with our different teams and see how we integrate tech into our work and how we use it to improve the customer experience. Obviously, there’s always potential that if she is great, maybe she might join our team. It’s important to emphasise that it’s a paid internship – there are a lot of companies that do stuff that’s not very legal.
It’s a recent inadvertent direction for us in terms of social activism and leadership, particularly as far as we see leadership opportunities and career opportunities for women. It’s obviously something that’s important for our customers and our team and to me personally, I guess.
There are all of these stories of rampant and endemic sexism in the tech industry particularly. This is the industry that’s shaping the future of the world and to me, it’s unacceptable that women who choose to be involved are given a hard time, to the point where it’s almost like women are being locked out.
The scholarship is about trying to support women in their tech careers and to show them there are good environments for women to work in and be creative but also supported and nurtured, rather than one where they just have to survive.
There are increasing numbers of women studying STEM subjects but I kind of feel like when women enter the workforce, they are faced with these awful ‘bro’ cultures. The scholarship is about showing them a tech career is attractive, it doesn’t have to be in an awful sexist environment – that’s not something that you have to put up with – and there are female-owned companies that want to set you up to thrive.
IRW: How do you feel about Amazon coming to Australia and how it might impact your business?
KM: You look at anything entering at the market, don’t you? You’re a bozo if you don’t. Amazon is not a big player in the beauty industry – they have four per cent of the beauty market in the US, it’s not nothing but it’s not a category killer. They’re tough competition, they don’t give up, they play by different rules to us and they’d be happy to go into a market and not make money for years. I don’t have that luxury.
Obviously we look at it and we think about it, but the way I think about competition generally is it’s an opportunity to be better, so we think about it in that light, rather than running around panicking. How are we going to step it up? It’s a good thing for any business to have that competitive pressure because it forces you to continue to find better ways to make your customers happy.
IRW: Beauty is quite a competitive market right now and there are lots of players. Where do you think Adore beauty sits in the landscape?
KM: What we’re seeing in the industry at the moment is there are two speeds. There are some retailers and brands experiencing tremendous growth, if you look at us, Mecca and Sephora. Then you have other retailers that are finding it hard to get any growth at all, if you look at department stores. There’s a sort of channel shift that’s happening.
The other thing we’re seeing is the rise of more of independent brands that are taking market share from the more established prestige players, so that’s interesting. It’s all been driven by social media and by different kinds of marketing to the traditional things that used to work.
Having a successful beauty brand in this country used to be about making sure you took magazine beauty editors on expensive junkets, you bought a lot of print advertising and did some TV with a gift of purchase and had a big counter with a big position at the front of a department store. That used to be the mark of a successful brand, but that’s not what we’re seeing now.
It’s definitely about a more consumer-powered approach to beauty which is exciting. It’s putting customers in charge of discovering products, enabling them to mix and match and customise their routine to give them the best results.
It’s less about treating customers like students, where they have to be given permission to buy a particular product by a uniformed sales assistant who has the products locked away behind the counter. That’s a very old-fashioned way of selling beauty and it’s not how customers are responding now – they like to be given the information, educated in the sense that it’s the truth and it’s brand agnostic and they can make their own decision as to what they want to buy.
IRW: Do social media influencers play a significant role at Adore beauty?
KM: We’ve done experiments and paid influencers with mixed success. It’s hard to achieve the result you want when you pay someone to do it, so we tend to make it happen more organically.
Our annual search for an amateur make-up artist works for us, because it taps into the people who are our most active customers, the ones who fancy themselves as Youtube influencers, and it give them an opportunity to show everyone what they can do. That’s a nice grassroots thing that we’ve been doing for a few years and it gets more popular every year we do it.
We also encourage customers when they receive orders to do a flatlay on Instagram. To me, that’s more authentic – that is what real people are actually buying and it’s fascinating to see what other people get. It’s my favourite thing to do. If I have a spare five minutes, I’ll go in the warehouse and see what people are ordering. I love it, it’s like peeking in someone’s bathroom cabinet.
It’s really important from my perspective that whatever we do on social, it’s authentic and it’s real, otherwise you may as well put your money in a pile and burn it, people can smell advertising.
IRW: I know you guys used to sell on Alibaba but you’ve just started working with a new global ecommerce platform. How are your international plans going?
KM: The China thing didn’t really work out for us, we tried the marketplace and it’s not right for Adore. That’s OK, you try things and some things work and some don’t, so what we’re doing now is a very light extension of that.
We’ve been international for 17 years and a lot of my first customers are in the States, so a few months ago, we joined with Pitney Bowes, a border-free solution, which does a slightly better job of internationalising our site so people can buy products in their own language and currency and checkout is faster and easier.
We’ve had our hands full with the growth we’re getting here domestically to the point that we’ve gone, ‘Let’s just focus on what’s already happening here, before we put too much effort into expanding elsewhere. Let’s get Australia right because that’s where growth is coming right now.’
IRW: What online trends do you have your eye on at the moment?
KM: AR has a lot of potential in beauty, obviously one of the challenges with online retail for cosmetics is it can be difficult to know how it will look on you, so I’d love to see a solution where you can show people in their own magic mirror where to apply a certain eyeshadow. I think there’s a huge amount of potential there.
AI and machine learning are all things we’re experimenting with already to improve our online experience. We’re already using it when we test different combinations of enhances or changes to the site. We have an AI-powered solution that will help us learn what people are responding to and customise the display for different customers.
As a multi-brand retailer, I guess where we see delivering value to customers is to really use our massive selection to uniquely personalise it for every single member that we have. We have 200 brands, a bigger selection than any other bricks-and-mortar retailer in the country.
IRW: Are you opening to Adore beauty bricks-and-mortar stores in the future?
KM: I don’t think about channels as defining us. At the moment, we’re by and large a pureplay. We do have a beauty salon in Brunswick, Melbourne as well, but the bulk of our business is online. I certainly wouldn’t rule out other channels if they made sense and delivered value to the customer.
What I don’t think bricks-and-mortar retail is about anymore is just having stuff for sale so people can buy it – why would you bother? It’s not as convenient as shopping online. That doesn’t make any sense to me, but if there’s an experience you can only deliver through a different channel, and it’s something that’s going to add value to the customer experience, I wouldn’t rule that out.
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