From the source: Tracey Bailey, Biome
Tracey Bailey is someone who has always tried to buy ethical and environmentally friendly products. But like many people, she found it difficult to know which products really were sustainable, and which ones were simply the result of corporate “greenwashing”. She dreamed of being able to walk into a store and know that every product on the shelf had been made as responsibly as possible. After realising that such a store didn’t exist, she decided to open one herself – online. She started Biome in 2003.
The retailer sells a wide range of household goods, such as stainless steel straws and environmentally friendly dishwashing detergent and cleaning products, as well as toiletries and apparel online and through four bricks-and-mortar stores around Brisbane.
While Bailey didn’t have a background in retail before Biome, she had a strong sense of what the customer wanted, since she was that customer. As a result, she has done things like segment customers based on their values, rather than demographics, from the beginning, something more established retailers are only now beginning to do to better understand their customers.
Here, Bailey talks about weighing in on controversial social issues and possible interstate expansion.
Inside Retail Weekly: What was a highlight for you in 2018?
Tracey Bailey: I think the highlight for me in 2018 was the world awakening to plastic pollution in our oceans. There were countries banning the use of single-use plastic, and there were big corporations saying they would phase out plastic straws – it was driven a lot by social media. That was another big highlight really – people adopting social media for activism, and change being effected so quickly.
IRW: A lot of environmentally friendly retailers reported a sales boost around the time that the two supermarkets banned plastic bags. Was that true for Biome?
TB: Yes, it was true for us too. It wasn’t just bags, there was a knock-on effect in a number of areas. Of course, sales of reusable bags have levelled out again, since the whole point of buying them is that you don’t have to keep buying them.
IRW: This brings up a really interesting question at the heart of sustainable retailing. On the one hand, you’re making the somewhat counterintuitive argument that customers should be buying less or maybe not at all. But on the other hand, eco-friendly business is a really salient message in the market today, and it might actually end up driving sales. How do you think about this?
TB: My philosophy is that people are going to buy a particular product they feel they need anyway, and our job is to make sure when they do go to buy that product, that the most responsible choice is available to them to choose. Hand in hand with that is the constant educational message we’re putting out to let customers know what they should be looking out for when they’re trying to buy a more environmentally and socially responsible product, including where it was made, who made it, what it’s made from, what are its impact in use and at the end of its life – how it can be disposed of more responsibly. We keep putting out those messages, so people can be informed and make the choices that will have the best outcome for the environment.
IRW: Do you find that that this enables you to avoid falling into the discount cycle, since you provide other reasons to buy, besides just price?
TB: Yes, but it’s not a panacea. There are a lot of different types of customers who are motivated by different things. It certainly stands us in very good stead, but we do still have to be very careful with our pricing, particularly with online shopping. People may actually be prepared to pay a little more [for environmentally friendly products], but they certainly don’t want to feel like they’re getting taken advantage of, when they could have gotten something far cheaper somewhere else. We try to have a broad range of products at different prices to suit different people’s budgets. We don’t want environmentally responsible living to be only available to the more affluent.
IRW: Who is your target customer?
TB: We don’t measure our audience the same way other retailers normally break it down. We don’t think of our customer in terms of whether they’re male or female, or what age they are. We think of them in terms of their values, and we try to make it possible for people to make the best choices to meet their values. For example, we have some customers who are vegan, and some who aren’t. We try to respect both, because there are many different ways you can choose to live on the planet with different impacts, and it’s very difficult to say that one way of living is necessarily better than another.
IRW: Was there a particular rationale behind the decision to segment your customers in this way?
TB: I think it’s because that’s the type of business we are. When we first started 15 years ago, our concept was quite revolutionary to retail – although some people might say it was going backwards to how things used to be before convenience consumerism came into existence. A lot of what we do is to go back to the way our grandparents lived in a resource-saving manner. We had this really crazy message, as we’ve already spoken about, of trying to say to people, don’t buy it if you don’t really need it, but if you are going to buy it, think about how it was made, where it was made, etc. Because we’ve always had that attitude, we didn’t follow the normal stereotypes in terms of categorising people by their demographics.
IRW: Interestingly, I think more retailers are trying to shift towards understanding and thinking about their customers’ values more, and analysing them in that way, as you have always done…
TB: That’s so true. And because we attract a consumer who tends towards being more mindful and conscious in the way they live their lives, they’re also very switched on to these issues. We’ll get pulled up by our customers if we use terminology that’s exclusive of a particular group, or not inclusive enough.
IRW: A lot of retailers seem to agree that you’ve got to weigh in on social and political issues, because customers want you to. But is it tricky to decide how much of a point of view you should have as a brand?
TB: It is tricky, and to be honest, we do steer clear of politics per se, particularly anything that might be received as party-related, but we do venture into issues. As a purpose-driven business, it would seem strange if on one hand we talked to people about trying to make a difference on global warming but we didn’t weigh in on the public debate about it. It would seem disingenuous.
We certainly do express our opinion and encourage people to get behind various environmental issues or campaigns. We did a little bit on the campaign to get the GST removed from menstrual products; we were quite outspoken on that. About halfway through last year, before the GST was officially removed on January 1, we actually reduced prices on all our menstrual products by 10 per cent across the board. We communicated to our customers that we didn’t believe it was fair for people to pay GST on a necessity item, so we were basically taking the hit for them.
IRW: I know you started Biome as an online business, and you opened your first bricks-and-mortar store because it was something you always wanted to do. Now you have four bricks-and-mortar stores. What’s the business case for you to have bricks-and-mortars when you could run Biome online only if you wanted to?
TB: I still find and believe that people want to be able to come in to a physical store, be greeted and looked after by a human being, have their issues listened to, and be able to see, touch and test a product first-hand. As much as we can try to do that through technology online, it’s just not the same. I think [bricks-and-mortar] works so well for Biome because we are an information-based store, people are coming in with certain needs and problems they want solved. It’s much easier for the customer to do that face to face with someone.
I often think about a customer who walks into Coles to get dishwashing detergent, for instance, and there’s nobody in the aisle helping at the supermarket. They could walk into Biome, and we would spend 15 minutes with them, talking all about natural dishwashing detergents, how to avoid toxins, what’s going to work best for them. They’d walk out with a $6 dishwashing detergent. That makes our staff overheads really expensive compared with the supermarkets.
IRW: There is something to be said for this traditional model of retail, in which the shop owner has curated a range and is an expert who can advise the customer about which product will best meet their needs…
TB: Yes, and with the increasing digitisation and impersonalisation of our lives, where most things can be done from home without going to speak to anyone, I think people are actually seeking a community. That’s exactly where coffee shops have stepped into the void. People want to feel like they’re part of a community, that a familiar face will say good morning and maybe even remember their name. People really seek that out, and I believe that is what is at the heart of the coffee boom. It’s not the addiction to caffeine, it’s the addiction to that feeling of belonging to something bigger than just yourself.
Shops are in a similar vein. People used to go to a corner store to get their basic needs. They don’t really exist anymore, but I guess that’s where shops like Biome, which have a high level of personal service, are filling that need.
IRW: It seems to me that two factors contributed to the demise of the corner store. One is that they couldn’t compete with larger businesses on range, and the other is that they couldn’t afford to price things as cheaply because they lacked economies of scale. Has this changed? Or how do you think retailers like Biome, which aim to provide a similar community feel, can compete today?
TB: Perhaps it’s because technology is assisting us to be more efficient and to have more access to products to offer a range. If didn’t have the internet, how on Earth could I find products to stock at my store outside of what the big distributors are offering through their catalogues? Most small brands and makers have a website and sell direct-to-consumer, so I can find the most amazing unique products that aren’t mainstream. Maybe I can’t offer as big a range, but I can offer quite innovative and high-quality, thoughtful products.
I think you’re also seeing a resurgence in the smaller grocery stores at the moment, the boutique, gourmet produce stores. People are going there because they’re getting really beautiful products with a story. Even though it’s food, I think it relates.
IRW: Do you see Biome expanding interstate in future?
TB: We do see that possibility, but it would be a big leap in terms of funding and managing it. Biome is still very much a family-run, Brisbane-centric business, so that would be a big step for us. We’d have to really step up our funding and our systems to make that happen.
IRW: What are you looking to do in 2019 to grow the business?
TB: One main focus in 2019 is our palm-oil offer. We have taken a very strident position on palm oil because it’s what the industry needs to shake things up and make significant change. We are 100 per cent free from all palm oil and palm oil-derived ingredients. You may be aware that palm oil-derived ingredients are in 70 per cent of products on supermarket shelves, from food to personal care and cleaning products.
Around a year-and-a-half ago, we removed all products containing palm oil from our shelves. But because the industry is still so heavily reliant on this miracle ingredient of palm oil, it has really limited a lot of the choices we can offer. So this year, our big focus is coming up with palm oil-free options for things like dishwashing liquid, laundry liquid, makeup and all your skincare and hair care.
IRW: Is there still a lot of work left to do in this space?
TB: Oh yes, because a palm oil-free ingredient for a really effective surfactant, which is like a detergent, is almost impossible to find. So we’ve got a lot of lobbying work to do, to get some chemical manufacturers to make palm oil-free ingredients.
IRW: Have you been working with any companies that might be able to do that?
TB: We’ve started, and in fact, we have just taken on a new team member specifically to head up our new palm oil-free category, to help us give focus to it and make some real progress.
IRW: Any other areas of the business you’re focusing on in 2019?
TB: Our Naked Beauty Bar. It’s a concept about teaching people how to go back to basics and learn how to make their own skincare using really simple raw ingredients, or ingredients straight from nature. We publish recipes on our website every week about how to make your own skincare and cleaning products, and the beauty of making your own is generally it can be plastic-free and zero-waste.
It’s interesting because you could go to a chemist or a department store and buy a pink clay mask in a pot with packaging for maybe $30, and the contents inside are just Australian pink clay. Or you could walk into Biome and bring your own little jar, and put in about 40g of pink clay, and it will cost you about $3.
We’ve got a shop in Indooroopilly, which is a Westfield shopping centre, where we’re paying big shopping centre rentals, and I stood outside our shop the other day and thought, I’m so proud of what we’re doing. Because here we are surviving in this big shopping centre environment, selling $3 pots of clay.