BIG INTERVIEW: Feelunique CEO Aaron Chatterley

Back in 2011 online health & beauty retailer Feelunique reported a turnover close to £16 million, but this year that figure is expected to be north of £40 million and within three years the company is targeting the £100 million landmark.

The business was sold for £26 million in a deal led by private equity firm Palamon Capital Partners at the end of 2012, and CEO and co-founder Aaron Chatterley has been leading the company in a new direction since the takeover was finalised.

How is business under new ownership?

Chatterley says: "The deal was to bring in expertise, it wasn't necessarily about the money. We wanted to bring the right expertise in to scale the business up.

"We decided we needed to rebrand, re-platform the website and we needed a whole new creative to really drive our brand awareness, while at the same time updating our back-end systems. All of this has been put in place over the last nine months and we have launched a whole new media campaign, built a new responsive layout website and built a proper mobile tablet site. We're on track to meet our targets."

With 170 people now working for the company, Feelunique has increased staffing by 20% in the last 12 months, adding expertise in CRM, user experience, technical and marketing.

The CEO attributes much of the company's growth to its ability to add leading brands to its product range, and there are some new brands set to launch on the website in 2014.

"We've had a lot of success in attracting the big brands to our site, unlike our competitors in the online space," he explained.

"None of our traditional competitors have the likes of Dior or YSL. We've been really successful building up the products that people want to buy and our historical TV campaign has been successful in building brand awareness."

Online vs bricks & mortar

There are a selection of pure-play online heath & beauty retailers currently operating in the UK market, including the likes of Look Fantastic, which is owned by the progressive online player The Hut Group, but Chatterley is looking outside this specific ecosystem in the battle for market share.

"We don't really view our historical competitors as competitors any more – we have moved on quite a lot," he argues.

"We have our own stores and salons, so we view our real competitors now as the likes of Debenhams, John Lewis and Boots. But where we differentiate from them is we have a much wider product range. We are not limited by the space we can fill in store – we have an indefinite product shelf, which means we can offer a wider range and a lot more professional products."

To a predominantly online retailer, the growing role click & collect is playing in the retail industry could be seen as a threat to business, but Chatterley believes the joining up of the store and digital channels in retail is unlikely to significantly impact the web-based players in the industry.

He stated: "There will always be a place for the high street and a requirement to visit stores. Click & collect has got huge in terms of the profile that the retailers that need it are giving it, but it'd be really interesting to see the actual stats on customers taking it up against those who are shopping purely online or in-store.

"The retailers that are really shouting about it are the ones that need customers in stores, but – perhaps with the exception of the grocery industry – I am yet to be convinced of the impact of this mechanism."

But, as Chatterley acknowledges, the way to serve consumers is continually evolving and he hasn't ruled out using locker services to allow Feelunique customers to pick up orders in the future.

"It's something that we would certainly consider once it becomes a much more widespread and reliable proposition," he explains.

The rise of mCommerce

Feelunique launched a mobile- and tablet-enabled version of its website in November, as part of the business's general rebranding and repositioning to focus more on premium products. Going mobile was something "we needed to do", according to Chatterley, and is an element of improving the customer journey.

"Over half of our traffic is coming from some type of mobile device, whether it's a smartphone or a tablet.

"I look at my kids now – they are four-year-old twins – and I can't see them using PCs in the future – I just see them using tablets. I just can't see the traditional keyboard and mouse being used for much longer."

Health & beauty online – can it really work?

Health & beauty has been slow to be taken up online, with recent research from Verdict suggesting that companies operating in the sector must drive innovation to counteract the inability to "try before you buy", which it said is holding back the market.

Verdict's data shows that just 14% of beauty/grooming shoppers across 24 countries state online as their most appealing method of shopping, compared to 78% who name in-store. Various indexes put online sales as around 6% of the overall health & beauty market.

"It's been hard to break away from the idea that you have to try everything in-store before you buy," noted Chatterley.

"We've launched a sophisticated sampling and testing programmes to try and combat this. We have recruited an editorial team and we are becoming much more of a destination ourselves, but the reality is most beauty products are sold as a replenishment.

"If you've already bought it before and you're just coming back for more, online is a perfect platform to do that. The penetration is still low online compared to other sectors, but it's great for us because there is still such an amazing opportunity."

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