Smaller, boutique, or D2C brands are scaling internationally faster than ever. This trend requires agile, cross-cultural leadership and an understanding of global consumer behaviour. We’ve taken a look at the DNA of those businesses getting it right…and where they almost got it wrong.
From Niche Idea to Global Brand
It must surely be every small business owner’s dream that their kitchen-table idea would one day turn into a global business. That niche product that they thought would serve a small community around them and give them just enough income to make a fair living, to their surprise, turns out to hit a nerve on a global scale.
The stuff of dreams, of course, but these things don’t happen just by accident. And the stories of success – a seed created in a back bedroom that suddenly becomes a part of everyone’s bedroom – are littered with commonalities. They are companies staying true to their original ethos and steadfastly not straying from the ‘one shop’ mentality that served them so well in their formative years.
Direct-to-consumer, or D2C, has been fast-tracked by the digital and social media revolution. Now, anyone can start to appeal to global audiences but also be very direct in how they target niche interests and/or very specific demographics. A D2C product’s shop window is no longer restricted to just the High Street it was born on.
Values & Identity as a Global Compass
But Lush, the British soap and cosmetics retailer, started life exactly like this. A single shop on a Dorset High Street in the 90s has since spawned a global footprint of some 900 shops and a thriving online retail operation serving more than 50 territories worldwide. In the mid-90s, it was one of the first to be an ‘anti-brand’. An organisation that thought differently to the tried and trusted ‘corporate’ approach of building an operation.
Since opening its first shop, Lush has stood out as being vocal in its ethical business practices, long before that was considered the norm. And it has always been vocally fair-minded in its global outlook, which drives appeal and retention for customers and staff alike. It has stuck rigidly to those principles, sometimes to its cost. However, customers, whether from round the corner from its first site in the southwest corner of England or from its website in Australia, will know exactly what Lush stands for.
Its stance catches headlines. Shunning the apparent power of social media, it famously announced in 2019 that it was switching off the vast majority of its social media channels. In a lengthy statement, it said it refused to play along with ‘algorithm games’ and openly criticised many of the major platforms’ ability to sufficiently deal with what it saw as the mental damage social media was having, especially on the young.
Some reports suggested the move cost the business some £10m in annual sales; however, it’s a move that underlined just how much it truly believed in its values.
And that wasn’t a flash in the pan. Just a few short weeks ago, the business closed all its UK stores for a day for what it says was a protest move at the starvation of children and genocide taking place in Gaza. A brand move that analysts say would have cost them more than £300,000 in sales on that day alone.
Lush’s financial performance can fairly be viewed through different lenses. While growth in areas like Japan and pan-Europe are up markedly by 8% and 2%, respectively, 1% drops in revenue in the United States and like-for-like digital sales retractions paint a mixed picture. The business itself, while posting overall marginal losses, points towards heavy investment in that period and one that, for this period at least, appears to be treading water.
What cannot be in dispute is its steadfast alignment to its beliefs. Closing stores and coming off social media, especially when staring at mixed P&L sheets in the boardroom, must have tested even the most ardent supporters of Lush’s original beliefs in the way the company should operate.
Cross-Cultural Challenges and the Path to Global Growth
Cultural and language barriers are repeatedly cited as a top issue when brands attempt expansion internationally. Misunderstanding local norms, customs, values and culture and even humour can lead to marketing misfires. It won’t be the easiest of transitions for a D2C brand that might have built its tone of voice in one country as self-deprecating in its home territory to then have that misunderstood as being ‘transparently bad’ in another.
And to start to expand into new territories, despite the dreams and ambition, must be easier said than done. It’s an enormous leap in infrastructure, in recruitment, in capital and in logistics and fulfilment.
For any Gen Z, Joe & The Juice has become a go-to brand, an urban cafe-style destination, and a cup-to-be-seen-holding for drinks on the go. And it found fame for its service and atmosphere that comes with an edge. The Danish brand exploded out of Scandinavia and had soft and successful landings across the UK and Europe with its hard-edge aesthetic and club-style surroundings with live DJs and beautiful, edgy staff.
Here was a juice maker, whose venues became hotter hangouts than the coolest bars in town, finding the perfect home at the intersection of fashion, health, drinks and a social media-friendly aesthetic with attitude.
But even for the company that was originally sold for $48m by founder Kaspar Basse more than ten years ago to Swedish venture capitalists Valedo Partners, who themselves sold it on again just two years ago for $641m, the path to success wasn’t plain sailing.
Joe & The Juice’s gritty edge didn’t land well at all in the United States when it first arrived. A country whose ‘customer first’ culture didn’t chime with how Joe & The Juice raised itself, and it had to rethink its strategies, not least in the light of a high-profile discrimination case brought in 2017 by the Equal Employment Opportunity Commission, alleging that the company failed to sufficiently hire and promote enough women within the business.
That, and failing to meet the challenges of successfully hiring and training at a pace that most analysts thought was unsustainable, forced bosses there to put the brakes on before it accelerated…into a wall.
However, the brand turned the all-important US ship around and can now boast successful operations across 70 stores Stateside, adding to the additional 350+ it has across Europe, the Middle East and the Far East.
Not bad for an outlet that started life in the back corner of a Copenhagen clothing store.