Jack Constantine (Lush) on Bursting the retail bubble with handmade tech | TNW Conference 2018

Hello everyone, thank you very much for coming. You're probably wondering what you've just seen. What I've shown you there is a trailer to six channels that we're launching. We've been working on them over the last 18 months. There's lots of content on social media, everything was filmed by our in-house media teams and our ability to get out there with the global network of activism on the ground and really look at how we can tell Lush stories.

I wanted to show you that, and we're working on social media and building our own global publishing platform which will be launching over the next six to twelve months. So that gives you an idea of the kind of things we're doing digitally.

Just to give you a bit of a sense of scale: the global cosmetics industry is 203 billion, L'Oréal 25.7 billion, Lush 0.8. So this was 2016, we're now around a billion, and obviously that's a bit of a speck in the ocean of the cosmetics industry. However, that does mean we are in 49 countries with 933 shops and 18,688 staff.

As much as we're a small dot in that industry, we are a very large organization. We still feel very much like we come from our roots of how we've grown the business from this one shop in Poole on the high street in Dorset to the scale I just described.

This is the team, the founders who actually created Lush. So the two on the right in the left-hand picture are my parents. It's a privately owned company. I have the privilege of working with family. I say privilege—it's a double-edged sword working with family—but I do have the great privilege of being able to enjoy private ownership of a company that we are just about to, or have just started, putting into an employee benefit trust. So now our staff own 10% of the company and the whole company is owned by people who work in the business.

That gives us the ability to think differently than most average organizations. So that kind of thinking different has been there from the beginning. The team you just saw were inventing cosmetics up in the upstairs of that shop I showed you, way back 22 years ago. That mentality has never left us. We've always focused on inventing and creating things that people have never seen before—cosmetics categories that never existed.

We invented bath bombs, we've invented shampoo bars, we have whole categories of products that have never existed before—we created them. And that is where my parents love to work. They are still very active in the company. They love working in the Lush Labs above the shop. My dad right now is making some products, and that product development mentality has always been nurtured throughout the business.

With that, we make our products fresh. We have factories across the world and we use the freshest ingredients we can. We're always focused on freshness as a huge policy in our business. We have a 21-day freshness policy in the factories—the products have to get out of the factory within 21 days to our shops. So we don't have massive warehouses full of stale stock packaged up for a drugstore. We have fresh products making their way through the global business every day.

Everything is handmade. All the products that we make are made by teams—very dedicated, strong, hardworking teams in our factories—by hand every day. This is a core principle of ours.

Naked—effectively we're talking about plastic-free. How can we reduce packaging and waste? We look at this as a really cool ethic of the business, alongside a lot of other strong ethics. Hopefully you'll see there's an ethical thread through everything I say. With this naked approach, it's come from the beginning. We always had unpackaged products, which is why the shop smells so strong. Everyone always asks: are we pumping that fragrance out through some kind of secret little air vent? No—that is just the smell of naked products.

If you went to a Moroccan market, you'd smell the spices a mile away. Everything's unpackaged, it all comes out, and that's exactly what happens with us. My job, to a degree, is to understand and figure out how we're going to move forward and look at the future of the business. I've got a few solutions to some of these topics I'm showing here, to hopefully give a sense of how we see digital working for Lush.

This is called Lush Lens. It's a prototype and we're going to be launching it in our naked shop that we're opening in Milan, which is only going to have unpackaged products in it—that's at the beginning of June. Effectively this is a way of solving our challenge with packaging through AR. We want to be able to put image recognition into this process so that you can basically have a look at the products through your phone and it will identify the products and tell you what the ingredients are. That would be a way for us to step away from packaging so we can tell people what's in the products, what the product is, and you can take it away with you.

Activism has always been at the core of the business. We have very strong ethics in fighting against animal testing. We've focused a lot on telling stories and using our business as a platform for others to be able to really get their message across. Again, because we're privately owned, we have the ability to just give the support that we feel passionate about, and our staff feel passionate about, to topics and areas that we think need some kind of support in their communication and messages.

An example of that in the digital world: last year or the year before last, on Black Friday we shut down our websites across the world over a 24-hour period to illustrate the message that internet shutdowns are happening all over the world. A lot of the time we don't see them, but if you're in continents like Africa or India, you can get the internet shut down when there's riots or when there's going to be a political event happening. That is dampening down on people's ability to have freedom of speech. So we fought against that and we campaigned alongside an NGO to work on how we could communicate that message.

This is an example of how we work every day across all different parts of environmentalism, animal rights, human rights, and now digital rights. With that, we launched a digital fund through a bath bomb called Error 404 and we raised 285,000 euros, which we then distributed across 20 global grassroots organizations all fighting for digital rights—from small villages in the Congo looking for internet connections to protect their villages from poachers, to people all over the world looking at different scenarios where we could help support grassroots organizations and sometimes one-man bands being able to get a leg up with their struggles.

This is a slogan that Wired magazine coined for us: "What Amazon Can't Do"—which is why we have that little Amazon tick there. We have the "What Amazon Can't Do" effect, primarily because we don't set up products on Amazon. A lot of people worry about retailers because of the effect Amazon is having. We don't set our products on Amazon, and you can't compare-shop our products through different websites. We only set up products in our own outlets.

We've had some challenging times with Amazon. We did have a run-in with them a few years ago because they were using Lush as a keyword in their Google searches. Lush is our trademark and they were trading off of our name, so we were in court with them about the situation. You can't use our name—they were selling competitors' products by saying if you search Lush on Amazon, we can show you these other products. So we took them to court.

The process was going on a bit, so my dad decided that he would register the management director of Amazon's name and create a product called Christopher North—as you can see here, a shower smoothie: rich, thick, and full of it.

So we're not afraid to stand out and speak up if we feel the need. Oh, and this is our version of what we would do—that's our Hello for Alexa.

So this one is—I'm sure you were thinking, what the hell is Lush doing at this tech conference, right? Like, what the f***, why is Lush here? And hopefully I've kind of alluded to a few reasons, because we are thinking technologically and we are focused on the future. And that's kind of my job within the company. I joined Lush straight out of school—I didn't go to university—and I went in 15 years ago. I suppose because I'm at millennial, just that millennial age range, I've managed to work my way through the company, providing some guidance and support about how we could think about the future, digital technologies, and what maybe we could be doing with those things.

So over the last five years, what we've actually done is we've set up a company within our Lush group called Lush Digital, dedicated to digital technologies and digital media, pushing us forward and thinking about how we could future-proof the business as these changes come through. As we've talked about the Amazon effect or other things happening that affect the retail environment.

It's also something very interesting because what it has brought to the forefront for us, as we have such strong ethical principles as we run our business, and the digital landscape is constantly evolving—it really pushed me to think about what other principles we're going to need to have in this digital business to make sure we feel confident we can drive ethically the same principles or the same feeling that we have within our brand—the passion we have for being ethical—on platforms out there that are evolving so much.

So we came together with a few policies. Well, this is my other slide I'd forgotten I had. The kind of thing I'm saying about the size of our business is that really the way that digital is set up in there is about having the brain of a startup and the body of a giant. Obviously we've got a massive business and we're trying to think quite startup about the things we do. Thankfully, with Lush, it's very organically grown over the years and it feels very startup anyway—it's not a big conglomerate, like I said. Privately owned, we have a lot more ability to do exciting, interesting, different things.

This guy coming up—he's my least favorite person in the world. This would be an enterprise systems reseller. This would be anyone who is sales-pitching their very expensive and unnecessarily complicated solutions to Lush or other businesses, thinking that we're just going to fall for it.

Over the last five years this has been a big frustration. And I absolutely, I'm sure there's people out here, but I have to tell you: your snake oil sales. Because the reality is we don't need overpriced software and hardware with a sales rep selling it because they're trying to make their margins. For a big company to get sold dreams but then they never deliver the right solution that does the right job—any ERP, any big systems, they never do the job they say they're going to do. So through that frustration, that's where we really put our efforts in.

So how do we want to approach digital, and what kind of ethics and ethos do we want to have around running our business through a digital lens? We focus on three core policies.

One of them is open source. We're very keen on community-based projects and community work, and that translates into the digital landscape as well. If we want to go out there and be activists against foxhunting in the UK and we're in that community, we also want to be in the communities that are looking at free software, looking at how we can make things and give things back to each other rather than constantly trying to package things up and sell them as proprietary.

So we're very focused on working with open solutions and working with partners who think about open solutions. We are not interested in proprietary resellers telling us they can sell us the world when they know they can't deliver half the things they promised unless you pay a crazy amount.

With that in mind, through our frustrations, we've actually found ourselves building our own technology in-house. So we now have 80 engineers across the world and we focus on building technology from a software point of view. And we've also found ourselves looking at hardware as well. We've worked on building our own till system, and that also leads into the whole process of how we run our entire business.

We have relatively simple objectives. If we want to sell products in a shop, we only have a line of three to six hundred products. I don't need discounting tools, I don't need all the other marketing things. We have staff in our shops—they want an easy way of being able to sell the products, and that's all we want to have. So we built the system we want to have, we built the solution that is right for us. And we built it in an open-source way: we built it using Android, we don't have any license fees for our tools, we're using Linux, making sure that we're actually utilizing the community that we were leaning on.

Very focused on how we can provide better solutions for the whole business. As you can see, it's not just about the tills—it starts to become about rotas, it starts becoming about other tools that our shop staff need. So open source is a huge component, and the openness that we have around software and free software and the mentality around what goes on with that is something critical.

The reason we set up the Digital Ethical Hardware initiative—like I said, something we found ourselves venturing into—we care a lot about our supply chain when it comes to the ingredients we use in our products. And I feel very strongly we need to care about the components that are going into our hardware. I think sometimes we can all forget that these phones we're all holding up—they don't land from space. They actually come from planet Earth. They get mined out, and all of that resource that's being used for us to put ourselves in an upgrade cycle and chuck it out in a year's time—all those things, they're valuable resources.

We need to be more aware of what we're doing when we're thinking about making our hardware. This is us in Shenzhen, because again a core approach is: get in there, do it yourself, and really understand what's going on. We visited Shenzhen, we've been working with different partners out there, working a lot with Fairphone to get a great idea of what we can be doing with them and their supply chain management.

We found a partner. I mean, if you really want to know—you don't want to know how cheap the technology you're holding is. It's crazy how much we're getting overcharged for what you've got. We're looking at the cool solutions and we'll be making a tablet for our shop. It's not going to cost us more than 500 to 600 pounds per tablet, and that's going to be ethically sourced. You could buy one for 10 pounds—that's not how much we're paying—and obviously there's a lot of unethical practices going on in that process.

This is an e-waste dump site that we've also visited. Like I said, if we're not careful, if we're not paying attention to the actual technology in our hands and we think it just lands from space and then when you throw it away it gets beamed up—no, it's going to these places. There are children who aren't going to school and they're going in here where they're working to strip rare metals and strip plastic off, take those rare metals and try to melt them down and sell them on. We are wasteful and if we're not careful we're going to ruin the planet we have. So we need to start thinking about what we're doing.

There's also data. Today, GDPR—thankfully there's a nice government policy coming through that's going to really help protect people. But we cared before that. The way that we treat things at Lush is we care a lot about customers and staff, and how we use the data and what is happening with that information—making sure that we're looking after it. It's a relationship of trust. You can't abuse the trust, which unfortunately Zuckerberg might have done.

You may have already seen this in the swag shop. We've been working with T and W—there's a "What the Zuck" bag you can buy. The money will go to the digital fund and we will support more grassroots activism through that. And that kind of led us to this interesting, very small community that's starting to grow around the topic of Tech for Good. This is our Digital Ethics Stand, our showcase and summit that we do. What we found is there are a lot of like-minded people there—very small grassroots operations trying to think about how we can improve the way we use technology in the world. And so we really need to work on how to pull that all together and really make a strong movement out of this.

My last things I wanted to say about things I've learned through this very crazy journey—and you've probably already thinking there's a lot of information. Obviously digital is widespread and huge. You have to get your hands dirty and get in there. I'm from a retail business—if we don't start thinking about the technology that's driving our business, if we don't start thinking like a tech company, we're going to fall and crash and burn. That, for me, is pretty much any company out there. If you don't start thinking about technology as a core aspect of your business, don't expect to be around in a few years. You need to get in there, get involved, get your hands dirty, and understand for yourself what's going on. Stop pretending that it's all okay and someone else is sorting it out—no, get in there and make things happen.

Failure hurts. I fail a hell of a lot. I keep failing. I've got so many failures under my belt it's quite embarrassing. Then I have to go back to the board and say I need more money, and they say, "Well, these are the things that you haven't delivered. They made mistakes, it's gone wrong, I've got this other thing happening." But it's so important—you're only going to learn from failing. But don't expect it to be fun. It's not like, "I'll fail faster, it'll be lovely." No—it hurts, it's horrible, it's painful. But you will learn, and it's what's needed.

Don't buy snake oil. Don't sell snake oil. If you know you're doing something that isn't important or isn't necessary or is bloated or just isn't something that really has an impact on the planet—what are you doing? Don't buy it, don't sell it, just don't do it. Where's your moral compass? You come to work and that means you leave your moral compass at home? What would you do at home? Why does it have to stay there?

Bring your moral compass to work. Think about the approach you're having and make sure you navigate what you're bringing to everything you're doing with that sense of personal ethics. Otherwise we're not going to have a great planet to live on. Thank you very much.