This week ISB speaks to Kate Morris, founder of Australia’s first – and now most successful – online store for beauty products.
ISB: When and how did the idea for Adore Beauty come about?
KM: In 1999 I was a uni student in Melbourne, studying a business degree – majoring in management – and working part-time as a promotional demonstrator for Clarins. When talking to other women I discovered that they found they found the experience of buying beauty products in department stores intimidating and often came home with products that weren’t exactly right for them. I resolved to create a way of providing women with a better experience and, in those early days of the internet, I realised that it would be more empowering for women to be able to make decisions from the comfort of their own home.
ISB: How did you turn the concept into a viable business venture?
KM: I worked out the minimum amount of money I would need to launch a website and buy enough product to service my first customers, and estimated I would need $12,000. As a student I wasn’t going to be able to get any money from a bank so I pitched the idea to my boyfriend’s dad, a small-business owner. He lent me the money and mentored me, particularly on the financial side of starting and running a small business – managing cashflow, BAS returns and so on.
I outsourced the creation of the website. This was before the days of broadband, social media and – most importantly for an eCommerce site – multiple payment gateways. It took a lot of time and effort contacting all the banks but one eventually offered me merchant services so I could take payments on the site.
ISB: So, now you have suppliers and a website, you just needed customers…
There was no money left in the pot for marketing, I assumed once you had a website people would come to it but things don’t work like that. Still being at uni I consulted with a marketing lecturer at Monash and drafted a media release. The early internet magazines were keen to cover the story – Australia’s first online beauty store – but the beauty magazines were a harder nut to crack, and in fact they didn’t come on board until we were really established, so I had to focus on providing a really great experience for my first customers. I wrapped the beauty products in tissue and put a Furry Friend or a Caramel Koala into every package – today it’s an individually-wrapped Tim Tam – and made sure I wrapped and despatched every package on the day of purchase. The feedback on this approach, emails from customers saying how much receiving their package had made their day, sustained me in the tough early days.
ISB: What was the biggest challenge you faced in making the business really profitable and sustainable?
KM: In the early years I only sold Australian brands but customer feedback revealed I needed to offer globally-recognised products. I looked to distributors of these brands but at that time they saw the internet as a fad and a threat rather than an opportunity. I knew that was I got one major brand on board the others would be far more likely to follow, and, eventually, I had a win. Coincidentally, the first big name I landed was Clarins, the company I had worked for in my student days.
ISB: Finally, what was the best piece of advice you have received you could pass on to others with an idea they’d like to turn into a business?
Choose a business in a field that you are truly passionate about, and that customers will care about too. The first years will be really hard so that passion will sustain you, and the positive feedback from your early customers that you are genuinely making a difference confirms you’re on the right path – so, my other tip is listen to your customers!