2. Executive Summary
This report is to examine, analyse and explore the merchandising techniques used by high
street retailer, LUSH Cosmetics. In 2014 the company reported sales of £20 million at their 106
UK stores (Campbell, 2014), the company highly represents ethical and environmental respon-
sibilities, which is a key factor in the creative design of their stores, as well as the ingredients
used in their handmade products. The report will be supported by primary research and sec-
ondary research, involving the summary and collation of existing research (secondary) and per-
sonally collected research such as floor plans of the specific store investigated, photographs
and interviews (primary). Some of the key factors that are to be examined are as follows:
-Brand identity
-Store layout and size
-Merchandising techniques: Shop Display/ Window display/ Product design
-In store etiquette
-Competition
-Website design
-Ethical responsibility
-Demographics
Upon the exploration of these subjects, a correlation between them will be identi-
fied which will demonstrate how LUSH run such a successful business in our cur-
rent competitive business environment, LUSH’s concentrated group of demographics and
niche market as well as their moral standing is a valued subject throughout the report.
1
3. LUSH MERCHANDISING REPORT
LUSH was founded in 1995, the cosmetics company uses organic fruit and vegetables, and es-
sential oils to create a wide range of fresh beauty products. LUSH are represented by their ethical
behaviour and this comes into motion in many different forms. They are severely against animal
testing, and avoid buying ingredients from companies that they don’t trust, they also believe in us-
ing as little packaging as possible and putting the face of the person that handmade the product on
the front. They strongly believe in protecting people, animals and the planet, this can be seen in the
charities that they support, and through their ‘Charity Pot’ product, in which 100% of the purchase
price goes toward humanitarian, environmental and animal rights campaigns that are local and
global (lush.com). LUSH’s philosophies are strongly represented via their brick and mortar stores
and staff, in which they work hard to create a happy and inviting environment for their customers, the
companies hard work payed off when they won the Observer Ethical awards 2014, for ‘Best in Busi-
ness’, (thegaurdian.com, 2014). LUSH is a highly successful company, with 830 stores in 51 coun-
tries, in 2012 it was reported that LUSH’s profits rose by £5 million to £26.2 million, the company
planned further expansion and an increased online presence to better their company (Bridge, 2013).
LUSH’s founders, Mark and Mo Constantine and their friend Elizabeth Weir (now LUSH’s retail direc-
tor), are major factors in the foundations of LUSH’s honest and transparent identity, the design and
store concept, products and ethics were inspired by the groups personal beliefs and favourite places
and desire to keep the business personal, LUSH have been successful in keeping the company
passionate and close to home, so to speak, they own only a small number of factories where the
majority of their products are hand made with simple labels that inform customers of the ingredients,
how to use it and who it was made by, unless the product is in the ‘Naked’ range in which packaging
is not required (Teather, 2007). The demographic for LUSH is between the ages of sixteen to thirty-
five, women in their late twenties are thought to make up a large majority of customers, many of their
products are feminine and don’t appeal to the male gender (Hisry, 2013), but in contrast to that, LUSH
also heavily cater for men, featuring ‘The modern man’s guide to grooming’ on their website, along
with ‘How to get the perfect shave’, complimented by products they sell in store that are aimed at the
male demographic, (LUSH.co.uk). LUSH’s brand identity is certainly centred around ethics, and this is
at the forefront of most peoples minds when thinking of LUSH, their green policy has been described
as ‘holistic’ in their approach to business ethics and other initiatives, for example, their limited use of
packaging, and their sustainable sourcing of raw materials, LUSH are strongly against animal testing
and are careful to resist involvement with companies that do conduct testing on animals (Marati, 2012).
The bricks and mortar shop is a place in which the retailer can utilise space and planning to create
a selling atmosphere that reflects their brand whilst successfully creating an environment that is
easy for customers to shop and for retailers to sell. Mintel (1999) created a group of principles, as
grounding for a successful shop design, to name a few that can be applied to the layout of a store,
customer flow and space utilisation, a retailer must use their space practically to enhance the ease
and flow to make the customers shopping experience as pleasant as possible, Accessibility to all,
Infrastructure and Mood and emotions, these elements are all valid additions to a stores lay-
out success, any contribution towards the customers end experience is a good contribution.
3
PAGE 1
EXECUTIVE SUMMARY
REPORT: PAGES 3-6
MERCHANDISING CASE STUDY
RESEARCH: PAGES 7-15
APPENDIX 1/ FLOOR PLAN & RESEARCH PHOTOGRAPH/ P. 7-11
APPENDIX 2/ INTERVIEW WITH LUSH EMPLOYEE/ P. 12-14
APPENDIX 3/ LUSH EMPLOYEE STATEMENT/ P. 15
PAGE 16
REFERENCES
PAGE 17
BIBLIOGRAPHY
4. used and the chalk boards were an easy way to tell customers what was in store, considering the
products were made fresh everyday, and even though they have the ability to outsource, LUSH
chooses not to, every shop is customised and the not only are the products handmade but also
the furniture, handmade by the same team. Grant also describes the deli feel to their displays,
‘Inspired by fruit markets, we pile our Bath Bombs high in crates like apples, na-
ked and ready to be picked up! we sell our soaps like big rounds of cheese […]. Hav-
ing naked products means we can avoid excessive waste and also create beautiful dis-
plays that customers can interact with. We love that customers can come in and pick up,
smell and choose […], so the design is catered around this.’ (McAndrew, 2014, pp. 5-6)
As seen in Fig. 12 , the displays are made up of LUSH’s ‘Naked’ range, more than 60% of LUSH’s
products are in this range. Naked products are concentrated solids that need little to no packaging
(Ellis, 2014), when packaging is used, they are normally plain black/white pots or bottles (Fig.11)
which are made from recycled materials and are recyclable. LUSH also has a self sustainable
scheme in which they ask LUSH customers to return 5 pots or bottles in return for a free fresh face
mask, in hope of eventually having their own plastic supply made out of the recycled product packag-
ing (LUSH.co.uk). LUSH have special requirements for some of their displays, where they are using
fresh fruit and/or things for product sampling that need to be kept cool (Fig.8), according to a LUSH
employee, these types of displays needed to be on ice all day which required occasional changing
and upkeep, the displays are often at the front of the shop, in which customers are instantly faced
with fresh goods in a cool condition ready for sampling (Appendix 2). Along with a fresh feeling upon
entering a LUSH store, customers are also faced with information on the latest charities and cam-
paigns LUSH are supporting, this links heavily with their website where all of the information is pro-
vided for customers to read up on, issues such as animal testing, their Anti-Shark-Finning campaign
(LUSH Japan), their Bullfighting campaign (LUSH Spain) and their Fur Free campaign (LUSH Hol-
land), LUSH has a great number of assets which translate well into their website design, their image
has a contrast between bright colouring and the simple black and white and natural wood, natural
packaging. Recently LUSH underwent a website redesign, in which the site was transformed from
a cluttered, colourful, in your face lively design, to their simpler side, of black and white, ‘fresh’ and
calming, which seems to coincide better with the things that LUSH are serious about (Steven, 2014).
Embracing online presence is another way that LUSH communicate with their customers,
LUSH runs a Facebook page and Twitter account, as well as an Instagram account, in which
every store has a personal account for local customers. LUSH also have their own maga-
zine, The LUSH Times, released every few months, the magazine is made from recycled mate-
rial, and includes the companies new products, news and feature articles, (LUSH.co.uk, 2014),
LUSH use social media and word of mouth as marketing, and use the quality, service and
brand identity to create loyal and passionate customers that want to return, LUSH do not use
any type of paid advertising to market the stores and products (Appendix 3., Doughan, 2013).
5
The Colchester branch of LUSH in Essex has a long narrow space to work with, as depicted in
Fig. 1 (LUSH’s floor plan), it can also be recognised that this store has a ‘free flow’ layout, ac-
cording to McGoldrick (2002) the careful design of a store layout is to make the best use of the
space provided, to manipulate traffic flow and maximise exposure to the merchandise, in a free
flow environment, the shopper can be given more freedom in direction between fixtures, this can
encourage browsing and be visually pleasing, but this can also be negative due to an increased
risk of confusion on the customers part. Due to the long narrow space in this particular LUSH
store, the displays have been mostly positioned along the outside of the shop floor, with shelves
built upwards to utilise vertical space, floor planners must decide how much of the floor space
is to be used for selling with out crowding the space whilst offering enough floor space to fit the
maximum amount of customers (Buttle 1984). Due to the small space in the case of LUSH Col-
chester the open floor and ‘free flow’ design make it a relaxed pleasant environment rather than
crowded, often a cause of an evasive reaction from consumers rather than an approach be-
haviour, Donovan and Rositer (1982) cited by Bitner (pp.60, 1992) found that approach behav-
iours, which include shopping enjoyment, return affect, attraction and friendliness, purchasing,
browsing and exploration were strongly influenced by the consumers perception of environment.
Due to LUSH Colchester being a smaller store, careful consideration is taken when making up the
displays inside of the shop, the point of visual merchandising is to pull customers into the store, where
the product and image of the company is made to look attractive, atmospheric stimuli that please the
emotions and needs of consumers essentially increases customer participation in the store, that then
leads to positive purchasing behaviours (Anonymous, 2012). It is popular for stores to play music,
normally carefully selected music that persuades customers to feel a certain way, this is one of many
stimulants used in merchandising, as well as smell, touch and taste, in many consumption situations
several sensory channels operate simultaneously, this type of cognitive response from a customer
can engage them through excitement, interest and attention (Holbrook and Hirschman, 1982) and
effectively cause a positive purchase or at least a good impression from that store. LUSH shops are
well known for smelling strongly of their products, and this contributes strongly to customer reaction
on entering the shop, the smell could potentially be one of LUSH’s strongest selling causes, due to
the significance of smell and our memories, ‘The language of smell has no autonomous domain to
itself, memory becomes extremely important as a means of aiding our recognition of smells.’ (Moer-
an, 2007), meaning that a positive experience whilst in a LUSH store can result in a customer return-
ing, upon smelling a LUSH product or walking past a store without a pre-conceded effort to enter.
In terms of visual merchandising, LUSH stores are vibrant in colour and stacked high with prod-
ucts, ‘The shops feel more like a delicatessens than cosmetics stores […] The soap isn’t pack-
aged; it is displayed in gigantic lumps and cut to size and wrapped by the sales assistants.’
(Telegraph, 2001). As seen in Fig.13 and Fig.14 , LUSH has a kitchen/food style to it, an in-
terview with Tracy Grant, LUSH’s shop design manager, confirms that the use of chalk boards
and ‘naked’ products were down to necessity, a lack of money reduced the packaging the shop
4
5. APPENDIX 1
7
LUSH’s biggest high street competition is The Body Shop, opened for the first time in Brighton
in 1976 almost 20 years before LUSH was founded, the company similarly to LUSH is a great
supporter of ethical and environmental campaigns, (The Body Shop, 2014) although The Body
Shop has been questioned on their true ethical standing and transparency with regards to ani-
mal testing, a key imputes of the company. In 2006 The Body Shop after it’s founder and fel-
low shareholders sold out to L’Oreal, who test on animals (Booth, 2006), lost their ethical reputa-
tion, The Body Shops founder insisted that The Body Shop would be able to positively influence
L’Oreal in ethical retailing (Shankleman, 2013). According to Kent and Stone (2007), The Body
Shop has been slow to evolve it’s brand identity, and that the cause of their attempted innova-
tion has been mostly driven by competition and more recently poor trading performance. ‘Look
good, feel good, do good.’ is The Body Shops slogan, similar to LUSH, The Body Shop is ambi-
tious about ethics and in 2012 embarked on a store revamp to better communicate this to their
customers (Holland, 2012). The Body Shop’s continued their dark green shop exterior, to protect
their brand identity, the interior of the shop was replaced with light coloured wood for the envi-
ronmental theme, and the products were placed on new glass shelving with backlighting, they
also used free standing display units to create a spacious store environment (Anonymous, 2007).
LUSH Cosmetics have worked hard to establish they’re eco-friendly, and ethical identity, and suc-
cessfully portray this in their shop designs, product making and website designs. The shop de-
sign and layout illustrates a casual browsing environment with plenty of floor space, achieved
by utilising the space, and enhancing the portrayal of space by building displays upwards and
using small counters around the outside of the space, adding to the ‘kitchen’ style of the shop.
They’re products and packaging design succinctly compliments the shop design and vice versa,
as well as supporting the companies philosophies, e.g. ‘naked’ packaging supports their envi-
ronmental concerns, and compliments the home/kitchen atmosphere. Whilst the shop environ-
ment is a fun, bright, colourful place, it still relates well to the website in which customers can
shop and also read about the recent campaigns and/or the companies passions and beliefs, the
company has successfully crossed the two paths of serious matters and fun loving products.
Word Count: 2,229
6
8. Please describe a typical window display at LUSH colchester.
Not to crowded, but bright and colourful, normally with a bit of decoration but again not a
lot, we don’t need to many props because we display our actual products and they look re-
ally nice anyway!
Were there ever any fresh fruit or special goods used in displays?
Yes we would use fresh fruit, we would also put our products out in bowls so customers
could sample things properly, we’d normally have those type of displays near the entrance,
so that would mean that the fresh products would have to be on ice, which meant toping it
up in the morning, and sometimes during the day, it’s hot outside.
How involved do you feel with the company and their message?
I feel as if I do as a person represent a lot of their beliefs too, we are strongly against ani-
mal testing, we select our charities really carefully, we use natural products but don’t lie
about the ones we still have to use that aren’t natural, I feel like people sometimes mis-
understand the ‘natural’ statement, we don’t deny using other unnatural products in our
things, we just try not to, all the ingredients are listed on the pots, we are an honest com-
pany, I love what LUSH stands for, and look forward to a long career with LUSH, it’s excit-
ing to be in a new store at Brighton, I was pleased to see that the same atmosphere and
unity exists here in Brighton too.
How do you represent the company when you are selling LUSH goods to custom-
ers?
We all have training when we start, so we do genuinely understand the products, what’s
in them, what they do, what they smell like, so that we can serve our customers properly,
we have to make our customers feel at home in our shop, we want them to come in and
sample and smell and explore, that means always being chirpy and having a genuinely fun
time talking to customers, I love it, I do enjoy serving people and having a chat, you have
to feel comfortable with the person you are serving because we are sometimes fairly inti-
mate, if thats the right word to use? We put on the creams and sometimes give hand mas-
sages with the products, so getting to know your customer is important, if we are dealing
with a customer we are told to only deal with them, and dedicate our attention to only them,
which I think is good. I have loads of LUSH products at home, and I know all of them really
well, I think thats the best thing you can do to represent a company is genuinely believe in
the product they sell.
What do you think about LUSH’s merchandising technique?
Our technique is bright and bold, we have only one kind of pot, our actual packaging is
plain black with one kind of font on it, unless it’s a gift box or something like that, so we
use the actual product inside for colour and to make it look natural, which represents the
company. It obviously always smells nice to come inside, I’ve seen the smell alone pull in
customers. Our displays normally consist of stacks of our pots, or bottles which are what
people buy, and then normally a sample of a few of our new products in bowls and then
sometimes the fruit or fresh ingredient that went into the product, then bowls or boards of
other fresh product, it’s just so colourful and wonderful, oh we also have little mini black-
boards with the products written on so people can know what it is, and of course we are
there on hand to explain it in more depth.
13
APPENDIX 2
Interview with LUSH employee, 4/12/14, (Employed at Colchester and Bright-
on)
How long have you worked for the company LUSH?
About 1 year, maybe a little longer.
What does LUSH represent to you?
A step in the right direction for large companies, through their ethics and honesty.
What was your roll at LUSH Colchester?
I was a sales assistant but I was very close with my managers and so I was allowed
to deal with the social media sites for that store, which I really enjoyed!
What is your roll at LUSH Brighton?
Senior Sales Assistant still working towards extra responsibilities!
At LUSH Colchester, how did you feel about the store layout and space?
Nice period building, long and narrow, so quite dark sometimes due to the lack
of windows at the back of the shop, I felt like it was very open, giving customers
enough time to walk around and browse and enough space for the staff to interact
with the customers.
How does that compare to the Brighton store?
Much bigger in the big BT store, wider and much bigger, more room for tables in the
middle, which was very different to the colchester store, the footfall in Brighton is
much bigger than colchester so the size of the store had to be larger to stock more
product and make for enough space for more customers.
At LUSH colchester were you ever involved with the changing of window dis-
plays and/or shop displays?
Sometimes for training, but mostly a senior person would change the displays and
go by a merchandising booklet designed by LUSH’s merchandisers, but there was a
certain degree of free will, as long as general guidelines were followed.
And how often would you/somebody else change the window displays?
Normally very frequently, it was either about a week to 10 days, or sometimes 2
months, it depends on the window theme, for example a christmas display would be
up for a longer amount of time, but through out the summer we would change them
more often.
How often would shop displays be changed?
Only really when we had new stock, or similarly for special occasions, like christ-
mas, valentines etc. except from tidying and moving things about.
12
9. APPENDIX 3
Statement by LUSH employee about LUSH Colchester 4/12/14
‘Colchester’s a much smaller, narrower shop with a newer concept design than
Brighton, which is much more square with higher ceilings and room for displays in
the centre. Lush shops are designed to feel like kitchens when entered, with warm
lighting, tiled floors, cluttered wooden counters, both shops share that respect,
brighton noticeably older. Products always at lots of different eye levels. Prod-
ucts without packaging (naked) bright and colourful. Shops always sectioned into
‘hair care’, ‘skin care’, ‘shower’ etc. with the ‘fresh’ table always at the front. Dis-
play of fresh face masks presented with fresh roses, asparagus, blueberries etc
always a good starting point to talk about the company with first time shoppers
Window displays
Always bright and cluttered, often with a combination of gifts, ‘naked’ and pack-
aged products, and ingredients such as roses, fresh fruit, sea salt etc. often fo-
cused on campaigns (when not seasonal) with little or no focus on products e.g.
Sign of Love campaign, The Black Fish conservation organisation. Caliber of win-
dows differ for size of shop, eg Brighton has much greater scope for more eye catch-
ing displays, whereas Colchester has two smaller windows for more varied displays
Gifts brightly coloured, and patterned, all made with recycled materials and pad-
ded with potato starch ‘Eco-flow’, always lain out to look askew, looks less formal.
On designated gift walls or interspersed throughout relevant parts of the shop.
Difference between ‘naked’ and packaged products.
The‘naked’productsaresolidwithoutanypackaging,oftendisplayedonplates/inbowls,
frequently rotated so always colourful and various. Good talking point about ethics (no
packaging,nopreservatives,handmade).Mostpackagedproductsinuniformlystandard
blackpotswhichareoftenreturnedtotheshoptoberecycledinexchangeforafacemask.
Lush seems to me a step towards a much less formal template for business, where
transparency and honesty is habitual as opposed to contractual - it seems to invite
and encourage a more conscientious consumer. Familial: most of the founders began
as friends and are still actively involved in inventing, or on the buying teams - very
present within the company. The Fighting Animal Testing is an ongoing, company-
wide campaign which is featured throughout the shop - very much Lush’s impetus.
Let the products speak for themselves, Lush forgo media advertising and
encourage demos, free samples, host blogger’s evenings. We dont pay
for advertising all our ‘advertising’ is word of mouth. Lots of excess prod-
uct or soaps are sent to each shop to be given to local charities/fund rais-
ing events at the shop’s discretion (provided the charities don’t test on animals).’
15
How does the Colchester store compare with the Brighton store?
Thats a hard question for me because LUSH Colchester is where I started and
I really got along with my team, lots of them are now long standing friends, and
I’m fond of the store because thats when I first learnt about lush and was really
happy to find a company that was so ethical, but having said that I love living in
Brighton, and the store here is bigger and a lot busier which is good fun. But the
same work ethic and friendly atmosphere is exactly the same!
Is there anything you would like people to be aware of with regards to the
LUSH company?
Just that from my experience the company is genuinely honest, it’s built on trust
and the head office people really trust their store managers who get a large
amount of freedom to how they run their store, that carries on through to their
staff, and everyone is really happy. We do mostly use natural products but we
do also have to use some unnatural ones, which we don’t cover up, every ingre-
dient is thoroughly thought out, our products can be expensive but I feel like the
price is right for what you get, one of LUSH’s statements is that we are a retailer
and we have the right to make a profit, which I agree with, we are honest about
our products and people buy them, sounds good to me!
How do you feel about the LUSH website? Do you feel it correlates well
with your in store atmosphere?
Yeah, I like the website, it’s simple, the look of it is similar to the pot designs and
poster designs, and I feel like it does correlate with the stores.
How do you as a LUSH representative, want customers to feel as they en-
ter the shop?
Like I said before, welcome and at home, like they can spend as long as they
like sampling and testing, and chatting, and obviously, as if they want to come
back, we have regular customers so I think thats a good sign.
What type of music does LUSH play in store? Is it related to your atmos-
phere and shop message?
It is related to the atmosphere, and how much freedom we get because every
store is allowed to play their own selection of music, as long as it’s appropriate,
you know no swearing explicit content, so we play all kinds of stuff, normally
good music too, that is a good representation of the trust in our stores, I think.
Thank you, I’m going to ask you to write a small statement of anything
else you want to talk to about with regards to LUSH and the company, any-
thing you want to talk about or elaborate on, is that okay?
Yeah thats fine, no problem!
End of Interview, 25 minutes, 4/12/14
14
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