Ep 126 · 40 min · Mon 18 Oct 2021

Your Beauty BFF: The Adore Beauty Story

Tennealle O’Shannessy, Adore Beauty

Tennealle shares how it all comes back to customer-focus and reveals secrets to being everyone's best beauty BFF!

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0:00 40 min

In this episode

In this episode of Add To Cart, we are joined by Tennealle O’Shannessy, CEO of Adore Beauty. From starting out in Kate Morris’ garage with a $12,000 loan from her boyfriend’s parents to listing on the ASX in 2021 at a valuation of over $650m – it has been a wild ride so far. Adore Beauty now partner with over 150 cosmetics brands and stock 10,000-plus beauty care products. Today, they sell over $180m of product every year to over 800 thousand active customers.  But as you hear from Tennealle today, they aren’t resting on their laurels and still consider themselves under dogs. In a wide ranging chat we cover everything from how Adore uses content to drive repeat purchases, why headless commerce is so important to their future plans and how they are leading the way in female leadership. And of course, I couldn’t let the chat go by without mentioning Tim Tams.  Tennealle has been with Adore since August 2020 as CEO and has previously held a number of leadership positions at Seek – most recently Managing Director of Americas. As you’ll hear today, she is relentlessly focused on the customer and it shows in everything Adore is doing.

It starts and ends with the customer.

Tennealle O’Shannessy

Questions answered in this episode include
  • What is Adore Beauty’s approach to content?
  • What are the main differences you see between engagement on the Adore Beauty app vs the website? 
  • What can you tell us about the upcoming launch of Adore Beauty’s  private label?

Modest customer-centricity

“I think that we’re much more focused on the customer and so what we would say is that we very much still consider ourselves almost the underdog. Because if you go back to our origin story this is a classic story of a business set up in Kate’s garage 21 years ago. And it was one that was self-funded for its first, almost 15 years and so the way that they were able to be successful was to focus very deeply on delighting the customer at every stage.

And that’s something that’s really ingrained into all that we do today. I think as you look at our strategy and where we’re focused moving forward, you will see that underpinning of customer-centricity. That’s how we approach doing business.”

Women at the top

“Kate Morris and James Height, our two co-founders, are both incredibly passionate about diversity and gender equality and have made it a priority in the business. One of the things we’re most proud of in terms of the IPO was, that at its time, it was the largest business that had been listed with a woman founder and a woman CEO. And that extends right through the ranks. We’ve got a majority women team, a majority women board, a majority of women in executive team, and 82% of our managers identify as women. 

And so I think it starts with making it a priority in the business and having that being very clearly spoken about by the key leaders and that’s something that the leaders here at Adore have been passionate about for many, many years.”

Holistic marketing approach

“I think building a sustainable marketing platform that supports your scaling and growth is one of the key challenges for all e-commerce players and I think that any e-commerce brand that was anchored on growing simply through paid digital will cap out the growth at some point in time. 

We’ve thought about marketing holistically for several years now and what we’re really looking to do is to invest in and build out our owned marketing channels. It’s things like our various content channels, really building a community. It’s the brand awareness piece to improve the performance of our direct channels. And recently we also launched our mobile app. One of the things that really excites us about that as a tool is it’s essentially another owned marketing channel focused on returning customers. 

I think success for most e-commerce businesses that are genuinely looking to scale is to have a sustainable marketing platform that encompasses both a paid element but also I guess the lower cost owned community type channels.”

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Read the full transcript Auto-generated

Tenille O'Shaughnessy: We like to position ourselves as separate voice, almost like your beauty. BFF in your pocket. Beauty and personal care. In the first half of calendar year 20, the online market itself grew at around 60%. Our business grew at 84%. The uproar was something else, so we won't be doing that again soon.

[Voiceover]: Welcome to ADD to cart, Australia's leading e commerce podcast that express delivers all you need to know in the fast

Tenille O'Shaughnessy: moving world of online retail.

[Voiceover]: Every week Nathan Bush from E Suite and and an e commerce industry expert will share the news, research and insights that you need to know to keep

Tenille O'Shaughnessy: you at the top of your game

[Voiceover]: and of course keep your customers Adding to Cart. Hello and welcome to Add to Cart. My name is Nathan Bush, host of Add to Cart and Director at e commerce talent agency E Suite. If there was a Players Player award in Australian e commerce, can you tell we've just come off the back of September, then today's guest would be the winner. Hands down. No other retailer gets mentioned by other retailers as much as Adore Beauty. And today we have their CEO Tenille o' Shaughnessy joining us. From starting out in Kate Morris's garage with a $12,000 loan from a boyfriend's parents, to listing on the ASX in 2021 at a valuation of over $650 million, it's been a wild ride so far. They now partner with over 150 cosmetics brands, stock 10,000 SKUs, sell over $180 million worth of product every year and have over 800,000 active customers. But as you hear from Tenille today, they are not resting on their laurels and they actually still consider themselves underdogs. In a wide ranging chat, we cover everything from how Ador uses content to drive repeat purchases, why headless commerce is so important to their future plans, and how they are leading the way in female leadership. And of course I couldn't let the chat go by without mentioning the Tim Tams. Oh yeah, we'll get a little sneak on the Tim Tam strategy. Tenille has been with adore Beauty since August 2020 as CEO and has previously held a number of leadership positions at Seeking, most recently Managing Director of Americas. As you'll hear today, Tenille is relentlessly focused on the customer and it shows in everything that Adore Beauty is doing. So thanks to our partners Shopify plus and Signet. Here's our conversation with Tenillo Shennessy from Adore Beauty. Tenille, welcome to ADD to cart.

Tenille O'Shaughnessy: Thank you very much for having me.

[Voiceover]: Nathan, thanks for joining. Now you joined Adore Beauty in August 2020. What a time to join. I can imagine you've had a pretty crazy year. How would you describe your year?

Tenille O'Shaughnessy: Oh I know. What a 12 months. Hey. So look, where can I start? So joining in the middle of COVID stage 4 lockdown and then if that wasn't enough, I started with quite a lockdown project in terms of listing the business on the ASX in October last year. So we did that whilst operating under stage four lockdown restrictions and this meant that in fact I didn't get to meet most of the team involved in the actual deal until several months afterwards. So quite a 12 month period.

[Voiceover]: How did you bridge that gap between yourself and the team as a new leader?

Tenille O'Shaughnessy: Look, I think that it was something that I spent a lot of time thinking about and really I over invested in spending time upfront trying to connect with each of the team members. You know, my normal style would be to grab people and go for, you know, walk in a park or a coffee to get to know them. I tried the Zoom equivalent. It's probably fair to say I had mixed results. So when the new CEO puts a casual Zoom catch up in your diary, people tend to prepare a little bit more than I intended.

[Voiceover]: Yes. There's nothing casual about Zoom, is there? Not at all. And so previously you were with Seek and leading Seek here in Australia. What can you take from your time at Seek that you took with you over to Adore Beauty in this kind of challenging Covid times?

Tenille O'Shaughnessy: Yeah, So I spent 10 years at Seek and had various strategy roles here in Australia and internationally. So my last role was looking after the Americas portfolio at Seek, so looking after businesses in Brazil and Mexico. And I think that there was a lot of parallels and similarities in Seek and that's what attracted me to Adore. So Seek is another business that is founder led, deeply customer centric and very much on a strong growth trajectory. And so with my early conversations with Kate and James at Adore, I saw a lot of those same parallels. So I take a lot of inspiration from the stories that we have here in Australia of those Australian based entrepreneurs who have taken that very customer centric approach and turned it into a very successful, fast growing business. And both of those businesses have similar elements like that.

[Voiceover]: Yeah, absolutely. Now obviously you mentioned it there in that you joined and then a door went public a few months after that. What was the initial reaction from the team around going public? Did anything drastically change within the business?

Tenille O'Shaughnessy: I think we spent a lot of time up front really taking the time to tell The Adore story. And so I think that the Adore story is one that's quite special, both in terms of what's been created as a business, but also the culture and the values and what we stand for. So during the roadshow, which was a very busy, compressed time across multiple time zones, I think most of us on the team survived with lots of chocolate and coffee, but we spent a lot of time when we were speaking with investors, talking to them not only about the industry and the business, but the company that was Adore and what we stood for. Because it was really important to us that we attracted investors that shared our alignment and excitement for the vision we saw for Adore. We weren't comfortable at all compromising on either our culture or values or what we were trying to achieve. So spending the time taking. Taking the time upfront to talk about that means that we attracted investors onto the register that shared that sense of excitement for what we were looking to achieve. Having said that, there are elements of being publicly listed that are quite different than being in the private space. And so we had to, I guess, build out capability around things like our governments, our investor relations. And one of the key decisions we made early was to get the right members on our board. So we brought in a couple of independent directors that brought with them deep public experience, and they really helped us navigate those early days of the requirements of being publicly listed.

[Voiceover]: Beautiful. And what I've read in the lead up to this is that you have a higher majority of female leaders across your leadership team and across your board. That's fantastic. And I think there's a lot of retailers who are trying to get a higher female leadership base. Was there any particular tactics or strategies that you did to do that or did it just happen naturally?

Tenille O'Shaughnessy: Look, I don't think I'd use the word tactics. I think probably the defining thing for us is it was the tone that was set at end, the at the top and with leadership. And so one of our co founders, Kate Morris. Kate Morris and James Height, our co founders, are both incredibly passionate about diversity and gender equality and have made it a priority in the business. So one of the things we were most proud of in terms of the IPO was that at its time, it was the largest business that had been listed with a woman founder and woman CEO. And that extends throughout our ranks. So we've got a majority woman board, majority women executive team, and 82% of our managers identify as women. And so I think it starts with making it a priority in the business and having that being very clearly spoken about by the key leaders. And that's something that the leaders here at Adora have been passionate about for many, many years.

[Voiceover]: Yeah, beautiful. And I think it helps to have Kate as the founder story and really attracting and encouraging more females that go, look, I've done it. You can come follow, you can do it yourself. And loving what Kate's doing at the moment in the investment space about enabling other entrepreneurs, especially female entrepreneurs, to follow that as well.

Tenille O'Shaughnessy: 100%. You can't be what you can't see. And she's a fantastic example.

[Voiceover]: Spot on. Now on add to cart, we always do this part on the checkout and we'll do a checkout as well. But we always ask E commerce leaders and founders, who is your favorite retailer now? Adore beauty comes up a lot. Last week we had Julie Mathers join us and she said adore beauty as well. And you're obviously winning a lot of awards and very, very well recognized in the Australian E Commerce. Does that put pressure on you to kind of go, we're at the top of the game, we've got to keep going?

Tenille O'Shaughnessy: Look, I think we probably don't look at ourselves quite that way. We think about, I mean, our ethos and our philosophy is one to be building very trusted relationships with both our brand partners and our customers. And so what that means is that we empower our team to think about every element of our customer experience. So that might be from how we speak to them for our content and marketing through to how we engage with them on the website, ensuring that our E commerce experience is frictionless and all the way through to how we look at our logistics and delivery and offering the absolute best in terms of fast, free delivery. And so I think that. But we haven't changed that focus and it remains at the core of how we make all of our decisions. So that translates to how we make decisions on our strategy, on our hiring, on our execution. So I think that we're much more focused on the customer. And so what we would say is that we very much still consider ourselves almost the underdog. Because if you go back to our origin story, this is a classic story. The business set up in Kate and James garage 21 years ago and it was one that was self funded for its first almost 15 years. And so the way that they were able to be successful was to focus very deeply on delighting the customer at every stage. And that's something that's really ingrained into all that we do today. So I think that as you look at our strategy and where we're focused moving forward, you will see that underpinning of customer centricity and that's how we approach doing business.

[Voiceover]: Like bees to the honeycomb, retailers are loving Signet's new sustainable alternatives to traditional e commerce packaging. Signet have recently introduced honeycomb mailers into their eco friendly range. Made from craft paper, the 100% recyclable padded mailers offer the same protection as plastic bubble mailers without costing the earth. Signet have over five and a half thousand packaging solutions to help leading e commerce businesses step up their packaging game. Visit signet.net.au to find out more. Now with COVID obviously there are things that are outside of your control when it comes to that customer experience, such as fulfillment, which you pride yourself on and have a great reputation for. When we have things like the fulfillment network really struggling and you don't have control of that with people like Australia Post, what can you do to optimise that customer experience when you don't have control of it?

Tenille O'Shaughnessy: I think first and foremost the non negotiable is just to be transparent and to communicate with the customer and set expectations so that would go across the entire customer experience. We are very proactive in our communication. One of the decisions that we made early on in establishing the business was to own our own inventory and to own our own customer fulfillment center. And that has enabled us to be much more flexible and adaptive and responsive to the various challenges we've seen during COVID So during the COVID period we've seen challenges associated with different lockdown events that meant we had to operate differently in our customer fulfillment center. A significant increase in volumes that meant we had to ramp up very quickly and then as you just touch on challenges around volumes for our logistics partners and so but the owning of our warehouse has meant that we're able to change quickly and be quite adaptable in terms of how we can scale up to meet the needs of our customers. So during the last 12 months, despite all of that uncertainty, we were actually able to increase our same day dispatch promise. So we increased that to 4pm, which is industry leading, and then to hit that 4pm promise even through all of those key sales events. So I think it's about the decisions you make in your customer experience that allows you to be flexible and responsive to whatever the uncertain elements are that come through in your operations.

[Voiceover]: Yeah, that makes sense. What we've seen is we've definitely seen a gap opening up between retailers who are ready pre Covid with their Technology, their operations, their systems and those who played catch up and those who were ready beforehand really got to capitalize on what happened during COVID Do you feel like you are well set up moving into Covid?

Tenille O'Shaughnessy: Yes, I think we've been making necessary investments over the last several years. So when I take a look at our fulfillment centre and the infrastructure there, we moved to a new warehouse structure three years ago and we're operating with significant capacity to continue to scale. And then also when I take a look at our technology infrastructure, we've transitioned to a head loss e commerce infrastructure with an API layer that allows us to essentially a mix of build and buy so that again with our technology we can be flexible and nimble and scale quite quickly. These investments over the past few years have meant that we've been ready for the scaling and growth that we've expected to continue to come over many years. I think it's fair to say that that growth was accelerated during COVID I think Beauty and personal care in the first half of calendar year 20, the online market itself grew at around 60%. Our business grew at 84%. It's fair to say that an acceleration of the growth that we expected, but really pleased that we've made the necessary investments so that we could ingest all of those new customers, deliver an exceptional experience and we're seeing the benefit of that now. So those new customers we acquired during COVID are already returning to the site, repeating in a similar way as our historical cohorts and transitioning into those loyal customer cohorts that we've seen for many years.

[Voiceover]: So you've got an incredible return in customer rate of 64% based on the last annual report. So it might have changed since then. And we've talked about the holistic customer journey and how you guys are focused on that. Is there any parts of that customer journey specifically that you think are critical in keeping customers returning to Adore Beauty?

Tenille O'Shaughnessy: Yeah, sure. So let me talk about that a little bit. So firstly, if I touch on the Adore Beauty model, the compelling thing about our model is firstly, our customers are very sticky and loyal. So our retention rates are almost subscription like in particular in the later years. And then secondly, what we see in our model is that for each year that a customer remains on platform with us, they become more valuable. So they increase both their basket size and their order frequency. So with those behaviors, obviously the retention metric is one that is really important to us and one that we focused on for several years now. Historically, I guess where we've Seen being able to really positively influence retention is the work that we've done around engaging our customers through content. So we've been investing to build out a really powerful content engine that spans across. We've got a content team that builds things like blog posts, like tutorials, YouTube videos, podcasts. We've currently got three, I think, of the top 20 podcasts here in Australia in the fashion and beauty category. That content gives people a reason to connect with the door, to re engage to come back, you know, daily and weekly, not just when they're shopping. And that really encourages that retention, that retention behavior.

[Voiceover]: Yeah. And the podcast, for example, if we just take that one, I heard that it's got a million downloads already, which is incredible for a podcast, knowing how hard it is to get podcast listens. And one of the things I love about it is that it is truly editorial. It's truly helpful.

Tenille O'Shaughnessy: Absolutely. So, I mean, the podcast has really gone from strength to strength. So I think that our podcast on Latest Read is close to 3 million downloads now. And as you say, for a retailer, I think it's quite unusual to see that level of engagement. So as you would know, you can't pay a customer to download and listen to a podcast. You can pay for whether it's YouTube views or interviews or other social channels. But engagement with a podcast, where someone listens to what you've got to say for half an hour each week, I mean, that's something that is genuine engagement. And I think that a really important part of us being able to get that cut through and engagement is exactly what you touch on there is we really focus on bringing an editorial view to our content. So it's something that is in house, it's impartial, it's not directly sponsored for by our brands. I think our customers are very sophisticated and if it was positioned as an advertorial at all or sponsored by brands, they would sense that and wouldn't get the same engagement.

[Voiceover]: I bet you get lots of brands who would love to be involved from a paid sponsorship perspective.

Tenille O'Shaughnessy: Absolutely. But I think the decisions that we make in this space, what our customers are looking for from the door, is to bring that very authentic, real brand agnostic view. So we like to position ourselves as separate voice, almost like your beauty BFF in your pocket. So I think about your best friend that you talk about all of those topics of conversation, some that might be a little more cringy than others, but that's what we try to bring to our podcast.

[Voiceover]: That's great. And across Everything. So you do have an incredible YouTube channel. You've got great content on site. I saw that you're on TikTok now. How do you approach content from a team perspective? Do you have a team dedicated to content?

Tenille O'Shaughnessy: As I touched on, we really think about content as a key pillar to our strategy. So we aim to own the entire discovery experience for beauty shopping and our content really allows us to do this. We do have a dedicated content team and they do an incredible job here. However, if you do look closely, you will see staff from across the entire business contributing and sharing their experiences. So whether it's. I think we had a recent men's campaign and we had some of our internal stars from our CFC appearing on that. So you will see our employees sharing their recommendations and their experiences also.

[Voiceover]: Have you been dragged into it yet?

Tenille O'Shaughnessy: I have to a limited extent.

[Voiceover]: Brilliant. And so for things like the content. And I saw that you've done TVC's first TVC campaign last year. How do you tie those efforts back to online sales?

Tenille O'Shaughnessy: Yeah, sure. So if I speak to the tvc, we did our first experiments with brand campaign last year and really this was quite opportunistic in the early days. So early in the COVID lockdowns we saw an opportunity to take advantage of what was some unique marketing conditions. So we saw essentially a captive audience at the time. We were all in stage four lockdown and really favourable media rates. So a lot of the physical retailers were out of the market at that time with short stores shut. So we experimented with a TBC in May June last year, which our staff actually filmed in lockdown in two weeks predominantly on their own iPhones. So that gives you a sense of what production looked like. The TVC performed really strongly and so we followed it up with a national campaign. We were able to see really strong results for the TV campaign in terms of growing our brand awareness. So our brand awareness during the period shifted from 39% to 58% last year. So really pleased with the results of that TV scene and we'll continue to experiment and see where we get the best returns with a priority to really increase that brand awareness.

[Voiceover]: You said that you want to continue it. Is that because the customer acquisition costs through digital channels, especially the Facebooks and the Googles of the world, have gone up dramatically, especially in the last three months. Do you seek alternative channels like that to bring in new customers?

Tenille O'Shaughnessy: I think building a sustainable marketing platform that supports your scaling and growth is one of the key challenges for all E commerce players. And I Think that any e commerce brand that was anchored on growing simply through paid digital will cap out the growth at some point in time. So we've thought about marketing holistically for several years now and what we're really looking to do is to invest in and build out our own marketing channels. So it's things like our various content channels really building a community. It's the brand awareness piece to improve the performance of our direct channels. And recently we also launched our mobile app. And I can talk a little bit more about the mobile app, but one of the things that really excites us about that as a tool is it's essentially another owned marketing channel focused on returning customers. So I think success for most e commerce businesses that are genuinely looking to scale is to have a sustainable marketing platform that encompasses both a paid element, but also I guess the lower cost owned community type channels and things that

[Voiceover]: don't go down like Facebook and Instagram unexpectedly.

Tenille O'Shaughnessy: That's right.

[Voiceover]: Let's talk about the mobile app. What kind of customer behavior differences are you seeing between customers who use the mobile app versus who might shop online through the web browser?

Tenille O'Shaughnessy: Yeah, so let me talk about the mobile app. We're really excited about this one. So with the mobile app, we haven't sought to replicate our mobile web transactional shopping experience. Rather it's been built with a content first approach. And so our aspiration here was to create your beauty BFF in your pocket. So it's built to showcase all the amazing content that our team creates. So when you click on it, the first page you see is really engaging in the content. The idea here is that returning customers will engage with us through this content on a daily or weekly basis before returning to shop. So we did a soft launch and this is our approach to innovation here at Adora. It's very test and learn and very customer centric. So we did a soft launch back in December, not promoting it at all, just working closely with a group of engaged customers to get their feedback to iterate and improve. We've got to the point where we're really pleased with the performance of the mobile app. Getting really strong customer reviews. I think our current ratings at 4.8 and growing and we're seeing improve. We're already seeing higher levels of engagement, conversion through to sale and average order value over time. We also expect to see that returning customer behavior escalate also. So based on that strong performance, we've kind of moved from soft launch to hard launch, which means we're starting to promote the mobile app. And encourage our existing customers to download and use it.

[Voiceover]: Great. And you mentioned there before your approach to technology being Headless is that because. So you can open up more channels and own more channels like the mobile app and have consistency of data throughout them all.

Tenille O'Shaughnessy: So that's one of the advantages. So the building blocks that we used for the mobile app are the same building blocks that are used to power the mobile web experience. I think there's lots of advantages of Headless. It's that consistency and that ability to access data in a meaningful way. It also allows you to move much more flexibly and nimbly because changes that you make to elements headsets don't require a change through the entire monolithic structure. So I think that the case that was made for Headless for us was really allowing us to be agile, scalable, and respond to the customer in a more meaningful way.

[Voiceover]: And for those who are still confused by Headless, you've given a great use case and examples of what Headless is and what it means for you. How do you. In your head, are there any key pieces of technology within that headless? If someone's like, I need to go headless, are there key elements like a web platform, a CRM that you go are critical to getting the building blocks of that right?

Tenille O'Shaughnessy: Look, I think for us, I'll talk to our personal case rather than a general, because I think that's always helpful. One thing that has been a really important pillar for us has been personalization. And so that desire to be able to ensure that a customer's experience of a door is unique and tailored for them. And so what Headless has enabled us to do is to consolidate our data and offer an experience across the various elements of a customer experience that is personalized. So we've built out a proprietary algorithm called Beauty Wise. And with that algorithm, we are able to, based on what we know from a customer's history with us, so what they've engaged with, what they've liked, what they haven't liked. We're able to personalize most elements of their journey with us. So we personalize how they see their products, the recommendations that are shared, the offers they might see. We're even personalizing elements of our loyalty program. And so one of the benefits of having the correct technology infrastructure in place is that's enabled us to bring that holistic data set together, and then we can use that data set to leverage and drive meaningful personalization for our customers.

[Voiceover]: It's really smart. And you can see how this is all coming together. With the own channels, the headless. Because we're seeing that obviously the Facebooks of the world, the apples of the world are locking us out of data. And to be able to do that personalized experience, we need all that in place. The Beauty Wise algorithm that's really interesting and obviously that's IP that's really important for Adore Beauty. Is there any particular types of customer data that is critical for driving that?

Tenille O'Shaughnessy: Yeah, so I mean at the moment the way that the data that is driving that for us, it's based on our customers previous interactions with us. So seeking to understand when they've been on the Adore website previously, when we've shown them specific content, whether or not they have engaged with that content or not, what they've purchased with us previously, what they've disregarded. So at the moment that's, that's how we've built out the algorithm. There's opportunity over time to continue to improve the model. And so looking at levers like seeking to understand and input metrics like lifetime value, so what our predictive view of what that customer relationship will look like over time. What I'd say also is with Beauty Wise we very much consider ourselves at the start of that journey. So the last 18 months to two years has been about as I touched on getting the technology and infrastructure right so that we can collect the data in the right way. Building out the algorithm, what we're doing now is starting to experiment with use cases, additional use cases where we can use Beauty Wise to further improve metrics like conversion and engagement, things like that. So really exciting. We've got the building blocks in place and now we just get to think about how we can further improve the customer experience.

[Voiceover]: That's fantastic and I think it's great advice for anyone thinking about personalization and where to start is that you don't need to have all the data perfect before you start, just pick a few key pieces and then build upon it.

Tenille O'Shaughnessy: I think that's fine, you can always improve and refine. But I think that what I'd start with is very much think about the technology as enabling. What is your understanding for the customer is asking for from you? And so where we always start is understanding that in the discovery space, here's what the customer's looking for from us, whether it is information, education, product information, product content reviews and then the technology will enable us to deliver that in a personalized way. So it starts and ends with the customer.

[Voiceover]: Nice. I'm getting a theme here. I'm getting a theme. I Like it. You mentioned there around data and understanding what customers want to. You've also been very public about Adore Beauty soon to launch a private label suite of products. Does that customer understanding customer data go into product development now?

Tenille O'Shaughnessy: It does. So the private label is another strategic initiative we're really excited about. And so our approach to private label has been a little different. So we have very deliberately sought to leverage that data and insights we have from our large customer base to really identify gaps in our offering. And so our first private label brand, which will be in the skincare space, is on track to launch in the third quarter this year.

[Voiceover]: That's exciting. It's phenomenal to think that you've got gaps given how much you already stock.

Tenille O'Shaughnessy: Well, that's the really exciting thing about the beauty category, right? So it's a category that customers are so deeply engaged with. It's such an emotive category, but it's one where you see constant innovation. So there are trends, you know, you will have seen the trends around cosmeceuticals and active skincare ingredients. There are trends towards natural or clean beauty. We've seen quite recently the popularity growing of Korean beauty on the platform. And so we've really built out our range there. So that's what's really exciting about beauty. It's always changing and innovating.

[Voiceover]: When Australian fashion brand Age wanted to set up its international omnichannel presence, they wanted to focus on mobile intuitiveness and flexible payment types. And of course, they turned to Shopify Plus. In just a few weeks after implementation, they saw their e commerce conversion rate soar by 135%. It's the stuff e commerce streams are made of. They also saw a reduction in bounce rate, increased pages per session and a longer session duration. Now they are ready to take on the world. To read more of Age's story and see other case studies, visit the customers section on shopify.com auplus. You've mentioned that you've got a test and learn approach and obviously, like you said, there's so many trends happening around beauty. How do you choose which ones you go after?

Tenille O'Shaughnessy: I do feel like there is a theme here, but we listen to the customer. That's right. So we're a business that's been bootstrapped for 15 years, we can't look everywhere. And so what we need to do is go back to understanding what really matters to our customer. So if I give a small example there, we've had a look at expanding into related product adjacencies over Time. And that's something we've been experimenting with over the last two to three years. And so we start by understanding what are the extension ranges that would make sense and be aligned with the Adore Beauty brand and would be something that our customers would expect to buy from the platform. So we've been experimenting moving into the wellness category, the sex category and fragrances. And the way we do that is we typically smart start with a niche range, a small range of brands. We put it on our platform, we see how it works from a customer perspective and where we see success, we then scale up.

[Voiceover]: Are there any areas that Adore Beauty just won't go, even if your customers are screaming for it, because it's just not the Adore Beauty brand?

Tenille O'Shaughnessy: Oh, look, I think there's plenty of areas that you won't see Adore Beauty go. So our stated approach is we want to be the discovery destination for beauty and personal care. We think that the success that we have had is that customers are looking for a specialist experience in shopping for premium beauty. And so I think it would be fair to say that you won't see us stretching out into many different and varied categories. Like you see on the likes of Amazon. Customers come and shop with us because they're looking for a premium beauty shopping experience. We know what we're good at and we know what our customers are expecting of us. And I think that success for us is that we just focus on doing an exceptional job at what our customers are asking for.

[Voiceover]: Yeah, beautiful. Because you're so bullish online, does that rule out any physical presence in the future?

Tenille O'Shaughnessy: Look, I think that we spent 21 years disrupting the physical shopping experience by creating a digital experience that we believe is superior in many levels. And I think we've demonstrated that across the entire customer experience, we're able to deliver a shopping experience that is at least as good as what you get in store. So for reasons of, I guess, physical distribution, we wouldn't necessarily be looking to roll out a network of 150 stores. Say, having said that, one of the key opportunities for Adore Beauty is to continue to build out our brand awareness. And I think that that remains a real opportunity for us and we are very, I guess, channel agnostic into how we will build out brand awareness. So I think pre Covid we were already experimenting with both virtual events and in person events. So activations that more are focused on the lever of building brand awareness. I think we'd be very open to that once lockdowns allow.

[Voiceover]: Yeah, brilliant point. It's like, just because you've got an online presence and an online sales channel doesn't mean you can't have physical touch points and physical experiences with your customers. So, great point. I've got to let you go because we're running out of time. But I can't let you go without asking one last question. Do you get a bulk discount on Tim Tams?

Tenille O'Shaughnessy: Look, I feel like at this point we should really be shareholders.

[Voiceover]: I think so.

Tenille O'Shaughnessy: In all seriousness, though, our customers do love the Tim Tam and to give you a small example of just how much they love the Tim Tam, as an April Fool's joke, one year we notified customers across all our social channels, letting them know that we'd heard their feedback around the desire to be more healthy. And so we were responding by replacing the Tim Tam with a packet of Australian organic Sultanas. The uproar was something else, so we won't be doing that again soon. And it's fair to say that the Tim Tam is a staple and part of our experience.

[Voiceover]: Talk about an April Fool's Day high risk April Fool's Day campaign. Tenille, thank you so much for everything you've shared today. We really appreciate and you know, like I said, I think you are held to the pinnacle in the e commerce community. So keep on doing the great work. You've given us A few hints. What's next for yourself and the Adore Beauty team?

Tenille O'Shaughnessy: Oh, look, we're only just getting started. So where do I start? We've just launched but we're yet to scale our mobile app and our loyalty programs. We're continuing to expand our range and moving into new categories like I touched on, like fragrance, wellness and men's and private labels on track for this year. So we've set ourselves the lofty goal of being the trusted destination for beauty discovery and success for us is that we continue to grow faster than the market and take share to achieve that aspiration.

[Voiceover]: Beautiful. And now, if people have heard this and want to get in touch with yourself or the team, what's the best place for them to go?

Tenille O'Shaughnessy: Either head to the Adore Beauty website or email us@investor relationsdoorbeauty.com Lovely.

[Voiceover]: Tenille, thank you so much for joining us on Add to cart.

Tenille O'Shaughnessy: Thank you for having me, Nathan.

[Voiceover]: I mean, there's no wonder that Adore Beauty is the powerhouse that it is, right? I love the focus from Tenille. You really heard that. Grit and determination and just eyes on the prize. And as much as I tried to find my way around it, everything had the customer at the heart of every decision being made. Here are my top three practices Practical takeaways from our conversation Number one what would happen if you took your hands off the steering wheel of content for a while? What if you handed it over to an editorial team who are responsible for creating content for your customers that doesn't need to sell and doesn't need your sign off? Would you get more engagement and repeat visitation from your customers? Would it take your content to the next level? While Adobe Beauty has a big content budget, you've heard that they've built their way up there. The independent editorial approach doesn't necessarily need to cost more. Might be worth a go. Number two if you have a mobile app or are considering one, does it create really create a different and enhanced experience compared to your website? Customers don't want a mobile app if a customer website will do the trick. So if you are going for a mobile app and you're investing in it and it does need investment both initially and longer term investment, make sure you're differentiating it with greater personalization. Using the alerts feature, using geographical information, preloaded content. All the things that mobile apps can do that you can't do on a website. It needs to be considered as a brand new opportunity. The last one I've got for for you is a bit of a left field one and it really shouldn't be. Have a look at your leadership teams both on the ground at the executive level and at the board level to see if you have a diverse leadership team. Adore Beauty have long created a workplace that encourages female leadership and it's a big key to their success. It didn't happen by accident and as we heard from Tenille, it's not about quotas, it's built into the way they work and leaders culture they've created. If you aren't benefiting from a diverse leadership team, it might be worth taking some time to listen and understand how you can set up your workplace to create better pathways for all to finish up. I have three resources for you. Firstly, if you're a first time listener of Add to CART and you want to stay up to date with new episodes, head over to add to cart.com and you can sign up for our weekly newsletter. We'll let you know every time a new episode drops, as well as giving you my three takeaways from each episode and a link to the transcripts so you can know that this is an episode that you want to dive straight into. Secondly, if you want a weekly roundup of the best e commerce case studies, tools and research. Sign up to the High Five Friday newsletter which is delivered to inboxes at 8am every Friday morning. I read all the e commerce news and send you the bits that I think you can take action from. Sign up at 12 high 12h I g h.comau forward/high five and the last thing. If you are looking to explore your next e commerce opportunity, head over to esweettalent.com we are a dedicated eco ecommerce talent agency connecting the best e commerce talent with the fastest growing brands. Check it out. Sign up to the email and get in touch with me if you want to discuss your next move. Until next time, thanks for listening and keep those customers adding to cart.

Tagged

  • Customer Experience and Retention
  • Leadership and Culture
  • Technology and Platforms
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