How Deciem plans to rule the world

Deciem, the Canadian company behind cult beauty brand The Ordinary, made headlines last month for its decision to close its stores and website on Black Friday, one of the biggest shopping days of the year globally, in protest of the rise of hyper-consumerism. Instead, the company offered 23 per cent off every product in its portfolio for the entire month of November in a bid to encourage customers to make more considered purchases rather than impulse buys.

This isn’t the first time Deciem has bucked the trend in retail. The company, whose tagline is “The Abnormal Beauty Company”, was founded by Brandon Truaxe in 2013 to disrupt the beauty industry. Truaxe favoured transparency – about ingredients and their efficacy, as well as prices – over marketing-speak, and kept every aspect of the business – from manufacturing to PR – in-house.

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This approach has proved to be lucrative. The New York Times reported in April that Deciem was set to sell US$300 million worth of product across its brands this year. In addition to The Ordinary, Deciem’s range of ultra-affordable skincare products containing clinical ingredients, such as Vitamin C and salicylic acid, the company also offers professional-level, anti-aging and multi-purpose skincare products under the Niod, The Chemistry Brand and Hylamide brands, as well as professional hair products under the Hif brand.

And it continues to expand its portfolio. Last year, it launched two new brands – Loopha, a shower gel line, and Abnomaly, a lip balm line – and is working on a babycare range under the Hippooh brand.

At the same time, Deciem has been expanding globally through retail partnerships and its own standalone stores. The company launched The Ordinary counters into Farmers department stores in New Zealand in August and entered Hong Kong through Deciem counters in Harvey Nichols and standalone stores in October. And it’s set to enter Singapore before the end of the year.

In Australia, where Deciem has had a presence through Priceline since 2015, the company opened five new counters in Myer stores in November, bringing its total number of counters to 12. This is in addition to its three standalone stores in Sydney, Melbourne and Canberra, and partnership with local online retailer Adore Beauty.

“Myer is a great partner for us,” Cheryl Poon, director of Deciem Asia and Australasia, tells Inside Retail Weekly. “It allows us to expand really quickly and reach customers of a wider demographic.”

According to Poon, the customers who shop Deciem products at Myer tend to be new to the company’s brands, while those who seek out a Deciem store are more likely to be skincare fanatics.

“They know a lot about the ingredients and know about Deciem already,” she says.

At the same time, the company’s presence in Myer – both through its counters as well as the much larger number of stores where select SKUs are stocked – allows it to test out expansion opportunities.

“At the moment we are focusing on expanding through Myer […] but we definitely would like to have more Deciem stores in Australia,” Poon says, noting that Australia is one of the company’s top five markets globally, alongside the US, UK, Canada and China.

“We will first enter [new cities] with Myer and review the market and see where the demand is before we look into having more stores of our own.”

Feeling the brand

When it comes to opening stores, Deciem isn’t just looking for strong demand, it’s also looking for unique locations, according to Nicola Kilner, the company’s CEO.

“We’re opening a store in Edinburgh that wasn’t on our roadmap, but Brandon, our founder, was in Scotland and saw the most amazing store that had so much character in an incredible location. And that’s what led us to open that store,” she tells IRW.

“The main thing we want to create in our stores is we want people to be able to feel the brand. We’ve always been very strict that no staff are on any commission fees – no-one has any targets – because we truly want to deliver what’s right for the consumer. We want people to feel comfortable and not like they’re being pushed or sold something they don’t need.”

Deciem as a retail business is hard to pigeon-hole. It’s often discussed in the same breath as direct-to-consumer businesses, such as Everlane and Glossier, though it has sold through retail partners from the early days. And while it started out online, it was quick to open bricks-and-mortar stores.

Today, most of the company’s sales – 55 per cent – come through physical stores, either its own or those of its retail partners. This is up from 37 per cent last year.

“The human connection still matters,” Kilner says. “While online we can create a knowledge-heavy experience, it can be a very monologue experience, which is why having real world presence is so important to us.”

A tight-knit team

Such a rapid pace of growth as Deciem has experienced over the past year would be remarkable for any business, but it’s especially noteworthy given the fact that Deciem manages every aspect of the business, including manufacturing, logistics and branding, in-house. Poon calls Deciem “a very special company” for this reason.

“This is a great advantage of ours. When it comes to inventory management, for example, our team in Toronto can look at the demand at the start of every week and produce just enough inventory to meet it. Overstock isn’t really an issue because we always have been able to be very agile and flexible,” she says.

On top of this, the tight-knit staff suffered a tragedy when Truaxe died unexpectedly in January, after a fall from a Toronto condominium. The founder was forced out of the business at the end of 2018 through a lawsuit by the Estée Lauder Companies, an investor, over concerns about his mental health. Kilner, a close friend of Truaxe, who had been part of Deciem since its founding, was named CEO.

“We have a fiercely loyal, strong and resilient team,” Kilner says about leading the business through such a difficult period.

“Brandon was our founder, and someone so many of us loved and cared for deeply, we truly miss him and his creative genius every day. He founded us on so many strong principles and values, it helps defining our path forward that bit easier. We will continue his legacy of bringing integrity to the beauty industry, while having fun along the way.”

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