major change for the business. Laing’s appointment as CEO earlier this year makes a lot of sense given his experience with bricks-and-mortar store operations.  In this interview, Inside Retail got an exclusive look into what Adore Beauty’s first store will look like and what the customer experience will be. Inside Retail: What are you most excited about in creating these ‘stores to adore’? Sacha Laing: Joining the business was about accelerating growth, and having a deep omnichannel and retail experience as I do, and coming into the business, that [opening stores] was absolutely the intent. It’s a great business and it holds a very special place in the beauty category as the leading pureplay online retailer.  Moreover, it’s got such a highly engaged connection with its core audience— $200 million in revenue and 800,000 active customers. Almost 80 per cent of our revenue is from returning customers, which means we’re doing something really well, time and time again. The last three years have built a strong foundation for the business, but new customer acquisition and growth have slowed. Looking at the market, 87 per cent of retail sales in the beauty category are done offline. Adore Beauty is primed and ready to go into bricks-and-mortar retail.  We’re not introducing a new brand to the Australian beauty consumer, although we will meet many new customers along the way, as we open stores in centres where perhaps customers haven’t seen us before. Without a doubt, we are expecting significant new customer acquisition through the initiative. For me, [opening stores] was very much the topic of conversation with the board in my initial discussions. I was looking for a business that I could make a meaningful difference in – transform and grow over in a relatively short to medium period of time – and also a board that was supportive of that. From the beginning, the board has been very supportive of a mandate for growth, pursuing these initiatives with pace but fully informed data-led decision-making, and that’s certainly core to the way I do things. There’s a very strong alignment between what the board was thinking, and the skills that I could bring to the business. IR: How did you decide where to open the stores initially and moving forward? SL: We’re very much targeting the large shopping malls embedded in fashion precincts, where there’s high footfall, but more importantly, where our customer shops. Particularly in those fashion precincts, it’s recreational, a moment of feeling good and engaging in a product that will make you feel good. By aligning ourselves with fashion, we’re in line with where our demographic is and how they shop. IR:  Do you foresee these stores being in shopping centres or on the high street? SL: We have a wealth of data and we have a significant volume of transactions over many years that’s enabled us to be very informed in terms of where our customers are geographically located in proximity to particular shopping centres, but equally, where we have spots around the country where believe it or not, we don’t have customers, even though we’ve got such a vast customer reach already. There are significant markets where we have very low penetration today in terms of customers that engage with us online. We’re looking at our store placement through two lenses— where are our customers? Firstly, where do we currently have that deep penetration in terms of customers who engage with us and have engaged with us for years, but we lose them when they’re offline? We lose them when they’re in the shopping centre. We’re not where they are. Equally, going into those centres where our customers are not in those geographic hubs, enables us to present the brand to customers that have engaged with with us in the past. We’re targeting large shopping centres and fashion precincts. We want to be immersed in fashion precincts. We want to be adjacent to those national fashion brands where our customer shops— our customers are in the 25 to 55-year-old demographic, in the heartland of that 35 to 45-year-old fashion lover who’s also, as we know, highly engaged in, particularly skin care, hair care, and also loves her fragrance and makeup. We are not looking for locations that are in the proximity of or going directly head-to-head with Mecca and Sephora. It’s not who we are and it doesn’t represent our offer. IR: How will the stores accelerate the growth outlined in the AGM? SL: When you look at our business from a category perspective, we are predominantly a skincare and hair care brand. We do makeup and fragrance — fast-emerging categories for us, but being an online-only business today, makeup and fragrance are more challenging categories to sell online, try as we might. So we see a tremendous opportunity to grow those categories.  IR: What are they going to look like? What’s the vibe? SL: There’ll be no cardboard collateral, no shelf talkers, so beautifully elevated execution and further iterations of those small devices will provide customers with more product information.  We’ve invested in an elevated design. You can see the curved glass, the beautiful brass AB plate at the front door, elevated aesthetic from clean lines and of course, leaning into our digital heritage.  Our brands will be able to project imagery within the areas that they’re their products are being displayed. Equally, we’ll be able to project advice on those little screens on the shelves around the store. All of that brand collateral you see around the tops of all the wall bays, and on the fixtures in the front windows – they are all digital screens managed by our central content management system linked back to our website. Every shelf in the store will have a tablet that will share price and product descriptions.  One tap on the product will take customers through to product information, and the ratings and reviews landing page within our website. So, much as we enable customers to educate themselves online, those same tools will be available offline, of course, in consultation with our beauty advisors. IR: What customer experience will the stores facilitate? SL: When you walk into the store, I want it to feel elevated. I want it to feel comfortable. I want it to feel like it’s a space where consumers can come and talk about their skin and hair concerns for a particular product solution. You won’t be walking into a nightclub environment that feels very intense with a lot of brands and execution coming at you.  We want the environment to feel comfortable and engaging; then, of course, most importantly, be able to provide the product that’s right for each customer. First and foremost, the store will present itself with that overwhelming sense of a dominant category-led approach in skin and haircare; as we do online today. We invest heavily in education— channels like Beauty IQ and our podcast. We pride ourselves on being seen as a destination for consumers looking for direction on how they might satisfy a skin or hair concern, and of course, fragrance and makeup – that will apply in-store as well. It will be a service model, where our in-store advisors, are educated and informed to provide the right level of advice in-store for customers looking to satisfy a particular concern, and we’ve always been a brand-agnostic business. We’ve always had that approach and that resonates in the way we train our staff. IR: When will the the Southland store open? SL: It’ll be in the next couple of months, probably post-Christmas in mid to late January. In the next couple of months, both the Southland and Water Gardens stores will open; we’re on site in both locations. Southlands is under construction now, but just with the proximity to Christmas, we’re likely to open just on the other side of that. IR: What will the balance of Adore Beauty’s own brands and retail partners be? SL: Very much reflective of the online experience: Ikou will be there in a full wall bay presentation. Ikou has a breadth of products that enables that level of representation. Viviology and AB Lab will be there in their full form. Both of those ranges are very limited in their SKU today; that’s going to grow over time. IR: New Zealand seems like the next obvious step for bricks-and-mortar expansion. What’s the international scope? SL: We have some business in New Zealand today, through our online channel, and New Zealand is on the radar for sure. We will extend across Australia in the first instance with 20 to 25 stores, there’s upwards of 100 fantastic major shopping centre hubs across Australia and New Zealand. This is just the beginning. This is just the first phase for Adore. We’ll focus on where we see the opportunity to attract new customers to the brand with that national footprint, and then start stepping up and filling in the physical store network, beyond that.