Case Study: Corporate Social Responsibility at The Body Shop

The Body Shop (TBS) has developed 2500 stores in 60 countries with a range of over 1,200 products in approximately 30 years, and is the second largest cosmetic franchise in the world. After the first TBS’s outlet founded in 1976, the company has experienced rapid growth and with expanding rate of 50% annually. When its stock first obtained a full listing on the London Stock Exchange, its price increased by more than 500%. In 1999, TBS was even voted as the second most trusted brand in UK by the Consumers Association. The founder, Anita Roddick had received numerous awards including Dame Commander of the British Empire for her contributions. TBS’s success is hard to observe from the extrinsic value but the ethical value which make the success of TBS so legendary and inspiring.

Corporate Social Responsibility at The Body Shop

Anita Roddick, founder of TBS first entered the industry by using £4,000 to open a small stand-alone shop of natural ingredient cosmetics and skincare products. Through her early travel experience, she had seen the potential of those natural ingredients being produced as cosmetic and skincare products commercially. Due to the budget constraint, Roddick used the urine sample containers purchased from local hospital as the containers of her products. The shop’s walls are painted with dark green to cover the damp. To save cost on advertisement, Roddick spread aroma in front of her shop to gain attention of the patrons. The strategy pursued was a huge success and another shop was able to be opened before the first year ended. In its second year, the company started to franchise the operation and by 1984 TBS already had 138 stores while 87 of them were located outside UK. The development of the company continued to soar when it went public in 1984. At the same time, Roddick started her efforts to encourage and contribute to social and environmental problems such as campaign of issues against animal testing in cosmetic and recycling.

In 1987, TBS’s Trade Not Aid program started. It was aimed to help sustaining third countries’ people livelihood. Besides, TBS’s charitable activities included aiding communities close to home and various donations. Roddick was strongly persistent with her own singular vision, that business could be a force for good, and that profits could be made without compromising principles which corresponding with TBS’s mission statement, “To dedicate our business to the pursuit of social and environmental change.” In 1990, TBS Foundation was launched to give financial support to pioneering and frontline organizations that aim to achieve progress in the areas of human and civil rights, environmental and animal protection. The website of TBS was launched in 1995 to keep pace with IT revolution. In 2002, Roddick stepped down as the co-chairperson of TBS International PLC but remained back as non-executive director. In 2006, TBS was purchased by Loreal which is not against animal testing. This move has raised a huge controversy around the supporters of TBS, however the company clarified that it is operated independently within the Loreal Group. Until now, TBS is still the icon of ethics business for many people.

These are three well-known policies that TBS taken as their core values of products:

  1. Against Animal Testing:  TBS is approved by the internationally recognized Humane Cosmetic Standard which is against conducting or commission cruel tests on animal for cosmetic ingredients and products. In 1980, animal tests were popular among cosmetics brand. Later, these numbers dropped gradually and companies bowed to public opinion and in 1999 there were none in Britain. While TBS is among one of the leading forces to object these not humane experiments, they always emphasized that they have never and will never test their cosmetic products or commission others to do it.
  2. Support Community Trade:  Most multinational corporate are just searching for cheap labor force in undeveloped countries while TBS has pioneered a program called ‘community trade’, not only about charity trade, but to achieve economic development and empowerment which provides opportunities for disadvantaged producers, especially women and indigenous people. The value chain to the advantage of producers is reconfigured, often via reducing multiple mark-up inefficiencies and cutting out exploitative middleman. TBS realized that without development of the community, any development in the community will be ineffective. As a result, the company introduces fair trade by buying the ingredients and resources they demand in the production of their products from those people with higher than market price. One of the examples is the purchase of cocoa beans from Kuapa Kokoo Company in Ghana, which is a fair trade cooperative with over 30,000 small-scale farmers.
  3. Protect Our Planet:  The 3R concept which represents reuse, recycle, refill has been utilized well in TBS. The company encourages the consumers to return the containers of their products after use to their outlets. From early 2008 onwards, 100% recycled plastic bottles and paper bags were introduced. TBS organized campaigns to raise conscious of people about the responsibility being a citizen of earth to protect the environment.

Benefits to The Body Shop by  Corporate Social Responsibility Activities

TBS saves a huge amount of money by not advertising but to put more efforts in social activities than other mainstream cosmetic brands, which gives it a same effect of publicity. It is an alternative way to generate mass publicity for the company without throwing big money to capture rosy commercial advertisement. A very good example of this is TBS’s first major campaign in 1986 which is alliance with Greenpeace in UK, ‘Save the Whale’. This campaign has helped to promote the new product line of TBS which is using jojoba oil as the ingredient to substitute the whale spermaceti.

In the cosmetics market that time, the business models are already standardized. TBS has focused on the business level strategy to obtain and sustain differentiation and advantage on competitors in the same industries. Not like other cosmetic brands which highly advertised the artificially created beauty and expensive ingredients, the products it offered provided no miracle effects other than cleaning and protecting. The usual finely designed bottles were also replaced with simple containers which are made from recyclable materials. The company also set up its own store while most of the cosmetics brands were locating them inside the shopping centre. TBS has highly concentrated on developing a drastically different image which is more focused on the ethical value and natural quality in it. The company has succeeded in challenging the accepted value curve of luxury cosmetics and beauty products to create one based on more ethical values. The social activism approach that taken by TBS has created a whole new group of consumer which is ethical living oriented. This is a very smart step taken by TBS, not only building customer loyalty based on distinctive ethical values, the company itself also benefits from gaining a high reputation and fame for environment friendly and contribution to the public. This unique positioning of TBS also made itself more invulnerable from price cutting wars. The company has presented such a distinct motive compared to other profit oriented corporations. Consumers choose products of TBS based on the conscience that generate naturally by their own judgments.

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