A ‘resilient’ D2C future: Beauty brands partner with The Hut Group to expand online

The partnerships, collectively worth more than €110 million, will give the beauty and personal care majors access to The Hut Group’s proprietary, end-to-end technology and operating platform THG Ingenuity to build and scale direct-to-consumer (D2C) presence worldwide. Along with international fulfilment and payments infrastructure, the brands also gain access to hosting, translations, brand development, creative content and extensive data analytics.

“The consumer shift to online continues at pace, and a resilient, world class, direct-to-consumer operation has become a necessity for brands to generate sustainable long-term growth,”​ said Matthew Moulding, founder and CEO of The Hut Group.

Partnering with The Hut Group, Moulding said, enabled brands to leverage all the important capabilities for the successful launch, marketing and fulfilment of a global D2C product offering.

‘Tailored’ D2C models for quick global beauty scale​

Speaking to CosmeticsDesign-Europe, Moulding said whilst beauty brands could develop D2C models in-house, and almost all of them had or were working to do so, success was typically “very slow to achieve” ​and also “very unprofitable”.​

“THG Ingenuity offers an end-to-end solution for every territory in the world, which can be specifically tailored for each brand to suit their needs. In addition, our global infrastructure means brands can achieve international scale quickly and efficiently,”​ he said.

“…When we say ‘end-to-end’, we genuinely mean it,” ​he said, with work including anything from fully translated websites and local payments to marketing and influencer content developed exclusively for brands.​

Elemis, for example, was set to launch D2C offerings across 15 territories in Europe and Asia over the next 12 months, leveraging THG’s distribution centres in the UK, Poland, Austria and Singapore for “greater fulfilment efficiencies”. ​PZ Cussons Beauty would launch D2C models for St Tropez, Sanctuary Spa and Fudge Professional in under six weeks and By Terry was set to launch an entirely new D2C brand. Burt’s Bees would upscale its D2C presence beyond the UK; rolling out its offering across Europe under the partnership, and Nuxe and Revolution Beauty would build upon earlier work with THG and upscale and expand D2C offerings into new global regions and markets.

COVID-19 drives need for ‘resilient D2C model’​

Moulding said upscaling online presence and direct-to-consumer reach was now more relevant than ever.

“There has clearly been a dramatic acceleration in the shift towards online shopping during COVID-19. This has unquestionably made brands rethink their requirements for a resilient D2C model and supporting global infrastructure. Now, more than ever, a successful D2C strategy will determine the success and longevity of a brand,” ​he said.

Asked if D2C beauty was the future, he said providing models were built on proven technology and infrastructure, it was “a really exciting opportunity for the beauty industry”.​

“Consumers have previously been slower to move their beauty purchases online than some other categories, such as clothing, but the pace of change has definitely accelerated in the past two years,” ​he said.

“There is still a place for traditional retail and real-life experiences to operate alongside the online environment and, when teamed with significant consumer engagement through mediums like social media, the possibilities are endless. Beauty has an exciting future ahead.”​

The future of beauty is omni-channel ​

Djalal Lougouev, co-founder and chief product officer at Ometria – an AI-driven, cross-channel marketing platform for beauty, fashion and homeware – previously said the future of beauty had to be a combination of physical and digital.

Lougouev said the COVID-19 crisis had made cross-channel or omni-channel marketing ​“more important than ever before”​ – ​with relevance accelerated by five to ten years.

Michelle Smith, business director at retail design consultancy Fitch, agreed and noted that COVID-19 had really driven up the importance and relevance of beauty communities, requiring brands to connect better with consumers through online channels​.