After over four decades offering its products exclusively through direct selling, Natura took an important step toward its goal of regaining leadership in the Brazilian market with the opening of its first store in Morumbi Shopping, in São Paulo’s southern suburbs. Natura hopes the convenience and experimentation offered by the physical stores will drive sales, and the synergy among the different channels will increase consumer awareness.
Shareholders received the news with relief after a season of bleak announcements. Natura closed Q1 with a R$ 69.1 million loss, adding up to a 40% revenue gap that has been growing since 2012. The company has been facing fierce competition from rivals such as O Boticário, which went from a speck in the rearview mirror to a worthy adversary since its brand revamp five years ago.
Premium Beauty News - Natura is a benchmark in direct selling in Brazil. What is driving the company to diversify its sales channels?
João Paulo Ferreira - Direct selling will still be our main sales channel, while the stores will take a complementary role. We believe in a synergetic effect taking place between them because our customers are always striving for convenience and now will be able to get our products through different means. The brick-and-mortar stores will enable them to try out new products and further discover our brand, which benefits all sales channels.
Premium Beauty News - So the idea is for both channels to coexist? How will this decision impact the work of Natura’s sales representatives?
João Paulo Ferreira - We see complete synergy between the two channels. Our vision is that by increasing the supply for our customers, everybody wins. Opening up a new channel generates new opportunities as well as an increase in sales potential for our representatives with a boost in brand awareness.
Opening stores advances our plans of becoming a multichannel company. We had already taken important steps down this path such as the distribution of the SOU range in drugstore chains. At the same time, we strongly believe direct selling takes a center role in serving our customers, so much so that we invested in new payment options and digital tools for our sales representatives.
Premium Beauty News - The idea is to segment the product range into different sales channels?
João Paulo Ferreira - We have a very large product offer, with lines that are more suitable for this or that channel. At the stores, for instance, we are focusing in makeup and fragrances, which benefit greatly from customers trying them out on the spot. On the other hand, the SOU daily care line is better suited for drugstore shelves.
Premium Beauty News - Natura had a concept store at Rua Oscar Freire in 2015, but the decision now is to open stores in shopping malls. What are the reasons behind this decision?
João Paulo Ferreira - The concept store was part of our learning process to put into practice a carefully structured plan to open our own stores. Our retail strategy, at this point, prioritizes retail stores in busy shopping centers.
Premium Beauty News - Is the brand looking into a franchise model or is it sticking to direct ownership for now?
João Paulo Ferreira - We are focusing on having our own stores for now, and it is crucial that we follow them up closely to ensure the stores reflect our core values and beliefs. The franchise model is a possibility for expansion in the future.
Premium Beauty News - How are Natura’s plans to expand internationally?
João Paulo Ferreira - Our international operations are becoming more and more relevant for our business. We will continue to invest in globalizing our brand, and this is the centerpiece of our expansion strategy. Natura is now present in six LatAm countries - Argentina, Peru, Chile, Mexico, Colombia and Bolivia - as well as France. The Aesop brand has 135 stores in 18 countries.