👉 Background: Adore Beauty has been one of the great Aussie e-commerce success stories. It launched in a garage back in 2000 and has become one of Australia’s largest online cosmetics retailers.

👉 What happened: During COVID lockdowns, Adore Beauty became the saving grace for those who still wanted to feeling human while stuck at home. Think: daily moisturisers, face creams and perfumes. But over the past six months, Adore’s revenue has dropped 17% to just over $93m.

👉 What else: The reason? Adore hasn’t quite adjusted to this post-lockdown world where they are competing with physical retailers as well as online retailers. As a result, they’ve pushed haaaard with promotions, which has hurt their profit margin too.

What's the key learning?

💡When it comes to selling products or services, there are infinite pricing strategies to get the sale done.

💡 Each strategy has a different and unique impact on your revenue and profit.

• Strategy 1: The 'always-on-sale' strategy. This appeals to a customer's sense of value. We call this the Kathmandu strategy.
• Strategy 2: The 'almost-never on sale' strategy. This means comapnies are able to forecast their profit margins pretty accurately. We call this the Apple strategy.
• Strategy 3: The 'promotional-activity-when-needed' strategy. Think: Black Friday sales, end of season sales and Boxing day sales. This is what most retailers do.

💡 But when you start pushing discounts outside of these periods, it may grow your revenue and move stock, but it can start to seriously affect your profit margins. And that’s exactly what has happened to Adore Beauty.

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