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GUEST COMMENT How Elemis partnered with THG Ingenuity to deliver international D2C expansion

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“A game changer in speed and cost efficiency to market; service to end customers, and delivering the dream of Elemis.com in a box globally, profitably and successfully.”  Sean Harrington, Co-Founder and CEO at Elemis & Executive Director at L’Occitane International explains how the company expanded globally

The Covid-19 pandemic has dramatically accelerated changes in consumers’ interactions with brands. Although direct-to-consumer (D2C) retailing had been explored extensively in the lead up to 2020, the last 18 months have driven a fundamental shift in the suitability of D2C for many brands across the globe.

Most notably, consumer demand has skyrocketed. This has had a material impact on order level D2C economics; customers are easier to acquire in D2C channels than they were pre-pandemic. They are therefore more likely to continue buying from that channel over time. This unlocks the potential of D2C for brands whose previous customer acquisition strategies would have been too costly.

One such brand that has taken advantage of the global opportunities presented by D2C is Elemis. Pre-pandemic, the British beauty retailer already had a well-established and successful D2C strategy. It had strong-performing operations in its two key markets of the US and UK, but identified an opportunity to roll out the channel at speed into markets with lower levels of existing penetration. 

In order to deliver this transformation, the brand partnered with THG Ingenuity – the technology services division of THG plc. THG Ingenuity was tasked with delivering an end-to-end solution for Elemis’ international commerce. The unique proposition – which provides a fully managed service across technology, fulfilment, trading, marketing and customer services – significantly lowers the barriers to entry for brands considering D2C. This allows for a rapidly scalable and efficient method of entry. And it has proven evidenced by the global success of THG’s own brands, all of which are powered by THG Ingenuity. 

Scaling D2C globally, at speed 

From the start of the partnership in 2020, THG Ingenuity and Elemis worked together to strategically map the brand’s international rollout, plotting a course to bring Elemis D2C to global markets at speed. After launching the first Elemis site in Germany in May 2020 as a pilot market, the partnership built on the learnings gained to roll out 15 further sites across Europe and APAC. 

This significantly accelerated the brand’s digital expansion plans, condensing what was an initial five-year strategy into a period of just 10 months.

On the project, Elemis’ Global President and Co-Founder, Noella Gabriel, commented: “It’s been an incredible learning curve, and fascinating to be involved in the process.” 

Rollout timeline:

  • Germany – May 2020
  • France and Italy – August 2020
  • Spain, Netherlands, Hong Kong, Taiwan and Singapore – September 2020
  • Belgium, Poland, Thailand and Malaysia – October 2020
  • South Korea – November 2020
  • Japan and Switzerland – February 2021
  • Australia – March 2021

THG Ingenuity powers each Elemis site with its end-to-end infrastructure across multiple elements of the proposition. This extends from its tech platform to fully managed trading and marketing services and fulfilment using THG’s own warehouse management system and network of distribution centres. 

The creation of individual, fully localised ecommerce sites also played a key role in the success and speed of the rollout. To do this, THG Ingenuity pulled from existing strategic expertise gained in launching THG’s own brands into global territories over the past 17 years – such as market leaders Myprotein and LOOKFANTASTIC.

Some examples of localised sites are as follows:

Singapore

Korea

Poland

All of which has played a part in enabling Elemis to gain a strong foothold in international markets, without significant up-front investment in infrastructure – ultimately leading to incremental revenue across the board. 

Using D2C to drive tangible customer insight

The trading, marketing and UX elements of the partnership have allowed for rapid data collection in new markets. In turn, this has allowed Elemis to generate customer records and learnings from an operational perspective. 

Two areas were particularly valuable in delivering insight:

Customer acquisition and data

In addition to generating more than 50,000 new customer records in EU markets since launch, THG IQ – the platform’s customer insight and data solution – has been used to provide insights into Elemis’ consumers in new markets and the way that they behave.

Operational learnings

The pace of expansion has uncovered learnings for Elemis in new markets, with trading levers, marketing campaigns and even fulfilment models iterated and tested continuously. The adaptability and appetite for growth on both sides of the partnership has enabled rapid optimisation of the model, with decision making driven by the data generated.

Looking ahead

As the partnership develops, there is huge potential for Elemis’ D2C sites to bring value to other channels by acting as a real time barometer of customer behaviour through further integration of the data and insight gleaned from D2C into the broader Elemis business. 

Furthermore, as THG Ingenuity’s global operations continue to evolve, the capacity to work with customers in all territories will increase. D2C will therefore play an ever more important and profitable role in Elemis’ global growth.

Author:

John Gallemore, CEO of THG Ingenuity

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