Myles Anceschi: It was exciting for a number of reasons. We’ve had some really exciting new brand launches, like the Melting Moments Cleansing Balm. And then we had our activities supporting small female-owned businesses through the holiday season. Overall, it’s been exciting on that front – when the brand, your product range and innovation develop. It’s so important in most channels and segments, but really turbocharged in beauty, where you need to have good news and solve customer problems. That’s our focus. How do we make our consumers’ skin more healthy and more resilient? And then the innovation kind of falls behind that.
On the other side, we’ve had a geographic expansion and our expansion in the US is going really well. I’m very, very pleased. We’re in Sephora and Neiman Marcus and we’re just about to launch with Nordstrom, so we’re picking up really good quality retailers. Obviously, it’s a super competitive market, but we’re able to gain traction because of the core elements and characteristics of the Alpha-H brand.
That really starts with the product working. We’re finding that when consumers trial the products and see their efficacy, they understand [the values] wrapped around the brand – the other reason for the brand’s existence outside of amazing skin results. Those sort of second or tertiary benefits are really starting to resonate, like our program The Encoreship. We’re a brand that’s very focused on female empowerment.
IR: Can you tell me more about Alpha-H’s international expansion plans?
MA: China has been good, albeit it hasn’t been a focus area. So we’ve established a really good presence across all the main cross-border e-commerce platforms: Tmall, Douyin and Little Red Book. We’ve got a presence in China and that platform will grow in the future. I think some of the questions we face over there are, “How do we position the product to make sure we’ve got the right solutions for Asian skin?” “Does our standard range really produce excellent results?” and “how do we potentially innovate for the long-term future to match the needs of consumers in the region?”
It’s not super-scaled at the moment. I think we’ve seen some impact from geopolitical issues, as well as the domestic impacts of Covid in China. Certainly the cross border e-commerce market has slowed off a little bit. But the good thing for us is that it’s been a year of expansion and we’ve established a platform with no great expectations, while knowing that it will be beneficial for us two or three years down the track. If you look at our flagship stores across all of those e-commerce platforms, we’re really well placed to take the next step.
You have to be in there for a marathon and not a sprint and you have to take note of the difference in skincare needs and types. Engaging consumers has been a focus for us. We’re starting from a small base, but we have a very good repurchase rate, so we know that when our products are being used, they’re effective. And really, it’s about getting the right product lineup that’s more suited to a Chinese skin type, so we’re being selective in terms of how we innovate and grow from that basis. China’s bigger in scale and levels of competition, but the competition takes a slightly different form. Increasingly, you’re dealing with Chinese skincare brands and the prevalence and popularity of those. Some of those CSR values are increasingly attractive to Chinese consumers as well. You’ve got to get that right.
The US is another massive base and highly competitive, but it’s coming more from indie brands. We’ve got good partners, and I think that’s the core of success in the US – you’ve got to be on the right platforms. And then those platforms need to have the right voice for the brand. We’ve tried to be more selective and really work with partners where we can use their awareness and creation platforms – whether it’s an EDM or a blog, or Instagram stories – to increase the education and awareness of our brand functionality and Alpha-H as a brand in its entirety.
IR: Alpha-H is now certified cruelty-free by the global Cruelty Free International Leaping Bunny Programme. It really is the ultimate credential for brands against animal testing. That’s important to note because there are so many clean brands coming through and ‘sustainability’ is one of those terms that just gets thrown around a lot and consumers are both savvy and sceptical.
MA: Being cruelty-free is extremely important. It takes a lot of work to go all the way up through your supply chain, checking where your ingredients come from and whether they test those on animals. There’s a lot of work in [getting the certification], but it’s verifiable, factual information that consumers can relate to that actually sticks.
Of all energy in the business, 65 per cent is now generated from solar in our factory up in Queensland, and here in Chadstone in Melbourne. We really try to focus on the actions and not just the appearance or the positioning of that action. I think that’s what consumers can relate to when they’re looking at a brand: What are you doing and is it better than last year? And are you a positive influence on the community, and, therefore, can I give you my love and my trust, and the support to stay within the brand?
That’s important commercially as well. Skincare generally is a very small core regime for any user. That’s the stuff they stick with for their life generally. And then there’s a lot of switching in, switching out of products. We want to be a ‘life’ brand, and that requires you doing the right thing in the tertiary space as well as the primary space.
IR: I think the other thing about consumers, especially when you’re talking about social and environmental issues, is that if they see something, they’re not afraid to call you out. They can be harsh.
MA: They can spot a fraud so quickly. They’re very savvy, and you can’t hide. And that’s why we start from that different lens. What do we want to stand for? Do we demonstrate those values internally every day? And is it going to be genuine when we actually progress or project that out to consumers?
And you’re right, you just can’t fake it. There are too many examples of where consumers quite rightly say [to brands], “Hang on a sec. You’re contradicting yourself. Or you’ve talked and not acted. Or you’re trying to greenwash when you’ve never stood for that [value] and it doesn’t look like you’re gonna stand for that in the future.”
[Those values] have to be enduring. This is the reality of the longevity of these programmes – they have to work commercially as well.
IR: Tell me about The Encoreship, a program that Alpha-H launched to help mums return to the workplace with great brands like Who Gives a Crap, Wittner, and Adore Beauty.
MA: The Encoreship is something that covers a very simple idea: We’ve got a huge, talented portion of the workforce who are not engaged because we’re not providing them with opportunities. So this is a commercial opportunity to get talented women who have been out of the workforce back in and working. Nationwide, there’s an enormous opportunity to have greater participation [among working mothers]. There are some views that if you’ve spent time out [of the workforce], you can’t come back in. We’re breaking down those barriers.
Longer term, we hope to get more participation every year and start to solve some of the bigger financial problems, like superannuation pay gaps and gender pay gaps. Those sorts of things come as consequences of the action, but the action is what’s most important. We don’t want to just complain about the gender pay gap. What can we do specifically to solve it?
The normal paradigm is “So-and-so can’t work five days a week” or “They only want to work three days a week.” Three days, from an extremely talented person, is better than zero. And it’s probably equivalent to five from someone who’s not motivated. We need to be more flexible in our approach. And that’s one of the hallmarks of The Encoreship. We want working mums, but then you need to understand that mums have obligations and responsibilities. So we need to be flexible to get even a little taste of that amazing skill set. It’s underused at the moment.
IR: It just makes sense, though. If you’re inflexible as a business, you’re literally letting all this amazing talent go by.
MA: You’re mad!
IR: I’ve got a three-and-a-half year old and I’ve learnt a lot of invaluable skills that I’ve taken to the workplace since becoming a mum. Have you seen how hard or fast a parent works when they know childcare pickup is coming?
MA: Yes! And that focus on application skill set is a truly untapped opportunity for businesses in Australia. There’s a longstanding set of data that shows that we get more out of people sometimes in a three-day week than five, because in those times of application, they are focused on an outcome that they need to get done on time, and then move on to picking the kids up for basketball training. Often that time-bound focus and purpose gives you much better outcomes. And that’s the lost opportunity that we’re trying to address in our own very small way.