Recommendations for the Honest Company Project (Overview the project at first)

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Recommendations – Select two different areas and provide one well thought out recommendation for each of the two areas that you select a) implement or improve integrations among channels (For example, there might be additional service outputs a channel could provide) b) add or delete channels (For example, they might need a different channel to reach a different market) c) use the website to increase customer loyalty d) other revenue generating ecommerce/channel suggestions. Use some creativity. Remember this is an eCommerce and Channels of Distribution class. Your recommendations should focus on those two things.

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Honest Company E-Commerce project Table of contents and reference pages Industry Overview 1 Company Overview 2 Company Website Assessment 3 Channels of Distribution 4 Reference page 5 Industry Overview The Honest Company was founded in 2011 by actress Jessica Alba. The Honest Company is a online retail which sells eco-friendly cleaning products such as diapers, body products, non-toxic products, etc. In 2014, the company’s annual revenue exceeded $150 million and has earned a $70 million investment. In 2015, the company was valued at $1.7 billion and is now preparing for IPO. In the same year, The Honest Company also launched a line of cosmetics, skin care products, and hair care to expand the brand and it is selling those products over 700 beauty stores within the USA. The Honest Company decided to open a store in LA but unfortunately it was not successful and they had to closed it. In addition, The Honest Company seems very ambitious about their business and it is considering to expand in Europe. The Honest Company has a monthly service that delivers customized bundles of their products to your door. On your first bundle, you save $10.95 which is an excellent marketing strategy when targeting new customers. They also use a emailing strategy to remind customers they are not forgotten. They send out emails periodically about free trials, products information, promotional things, and asking to follow on all social media. This impacts the ecommerce sales to go up. Furthermore, the company is also selling their products in a couple of retailer stores like Target, Whole Foods, and Costco. Which have been more successful than e-commerce since 80 to 90 percent of commerce still occurs in retailer stores. The Honest Company product development is also improving. The first baby wipes that were created for the company did terribly bad and many customers complained. They then removed the wipes from production quickly and relooked the products materials and manufacturing. They soon found new sources and within a few weeks the new product was back on the site and is now one of the site’s top-selling product. As you can see, Honest Company listens when it is being criticized and is also open to improve its brand. In fact, they care a lot about high quality products and want their customers to be please with those products. This shows how customerdriven they are. In 2016, The Honest company started to have civil lawsuits because customers felt that they were mislead by the company’s name of “ Honest”. Some of the products that customers complained about are laundry detergent and sunscreen. According to the Wall Street Journal, The Company Honest has told consumers not to use the ingredient “ sodium lauryl sulfate “ and it happened to appear that this exact ingredient appears in other detergents. However, The Honest Company has contradict the Wall street Journal and says that they use a different ingredient called coco Sulfate. It seems like there is a lot of controversy from both sides. Company Overview The Honest Company is an American wellness brand that designs, manufactures and sells products for ethical consumerism. The company was founded in 2011 by Jessica Alba with its headquarters located in Playa Vista, California. The value of the company surpassed the billion only after three years and it was estimated at 1.7 billion in 2015. The Honest Company is rooted with values in consciousness, transparency, design and community whose mission is to be the most supportive family brand. There are approximately 500 Honest employees divided in the packaging, technology and a customer service department where up to 3,500 calls and emails are answered per day. The company also accounts with the operations, fulfillment and shipping teams that manages their inventory. Honest started with a line of 17 products and now accounts with a portfolio of more than 100 products in different categories. The inventory includes nontoxic household cleaners, body care products, nutritional and organic supplements and baby food. These products can be packed in bundles that can be customized and shipped to your door any time needed. The main growing product line is composed of eco-friendly diapers with seasonal and stylish designs. Even though the brand is fairly new with six years in the market, Honest has a recognizable presence across the United States and Canada and sells in over 3,500 retail locations. In starting the company Jessica was inspired by her two daughter Honor and Haven. Jessica Alba was pregnant when she read “Healthy Child Healthy World: Creating a Cleaner, Greener, Safer Home”. In this book by Christopher Gavigan he addresses the many toxins that children are exposed to in typical household products on a daily basis and their link to diseases. When her first newborn broke out in hives due to chemicals in the detergent Jessica was frantic about her daughter’s well being. She was afraid her baby’s throat could close due to the reaction and she would not know if it was happening. All of this made Alba fearful and anxious for her baby as she herself was often sick as a child. That same night Jessica googled all the ingredients of the detergent and after her research, she discovered that some toxins can be labeled as fragrances. She began looking for products that didn’t have the ingredients that she was trying to avoid but didn’t find them. That is when the idea for creating Honest began and her mission became clear and started the company. Therefore, these products were meant for parents in search of safe and trusted product options. The Honest Company has significant competitive advantages with the most important one as filling the important market niche of organic baby products. A Nielsen study in 2015 found that the sales for organic baby food and formulas had increased 26% while the non-organic products sales decreased by 6%. The innovative monthly service that delivers products and bundles and a team with talented members like Brian Lee who is the founder of ShoeDazzle and the ecommerce innovator at Honest. Another competitive advantage is that the company was created by parents for parents which gives the customers the affirmation of trusting the products that an influential mom supplies to the market. Since the company exclusively sells their own products, that gives it an advantage to solely focus on improvements and innovations in their health and safety standards, quality and the price affordability. This company engages their customers and parents as part of their journey. This company serves to customers in the organic and ecofriendly markets as well as to aware parents and health inclined people that share the belief with the company, that what you put in your body matters a lot. All of these factors have led to the rapid success of the Honest consumer-product company. According to Alba, the name for the company reflects their core value. Company Website Assessment 1. Context:(Rating: Good) We think the context of company site is the hybrid, which means the site is both aesthetically pleasing and functionally efficient. For the functionality oriented, the site has a good product’s categories, shop bundles, “How it works” category, and “Choose from our bundle subscriptions” category, that’s ease of navigation. For the aesthetic oriented, the whole site looks very beautiful and cozy. 2. Content:(Rating: Good) We think Honest company’s site has lots of colorful pictures of product description and product’s presentation which has the best way for customers to buy products easily. In addition, it is the best way to attract our target customers like the mom with colorful images. 3. Community: (Rating: Poor)We think Honest company’s site is a non-existent site that has no community offer no way for users to interact with one another, on either a one-to-one basis or one-to-many basis. The honest company should allow their to be q&a or more customer interaction to convince users that honest products are good. Many may be skeptical that the product may not work as well as their non-natural competitors and have questions. An format for community interaction may result in more sales 4. Customization:( Rating: Poor)After reviewing the site and making an account with them there is unfortunately no way to customize the site. You can create bundles and edit email preferences, but there is no feature to customize. They could allow users to customize their background with cute green themed backgrounds. As a result users might be more likely to login in before making a purchase then at checkout. This way honest could suggest more products which might increase the user’s checkout total. 5.Communication:(Rating: Good)The sites communication would be considered a hybrid. They have is set up where you can chat with a member to ask questions. They also have it set up to where they will send out emails every so often to keep you up to date on promotions and what is going on in the company. 6.Connection: (Rating: Fair)The site does provide links to other websites other than their social media pages like facebook. They have a link to www.greenamerica.org for example, this site goes into detail about green businesses and what it takes to qualify to be one. They could improve by having more links to popular blogs and links relate to their product but not directly their social media platforms. This would make the honest company look better because others are talking about their products. 7.Commerce:(Rating: Fair) The site does allow you to make a purchase through them. You do have to login in to make a purchase. Even if the purchase is a one time purchase which can be annoying if you are just trying out the company. Allowing users to do express check out or guest check out would be easier for those new to the company and just want to try the products. First time users might be more likely to buy if they know they can buy once and not get the annoying emails after. Channels of Distribution Honest Company is a manufacturer that specializes in natural chemicals, and organic household, baby, beauty, and daily supplement products. Its target market segment is mostly women, and the company has three main distribution channels in retail, E-tail and affiliates programs throughout North America. Because according to D&B Business Brower’s company summary, Honest is a privately-held company, it does not disclose significant information to the public. Thus, we can only assume that there are wholesale intermediaries in the distribution channel to smaller retailers. However, for larger retailers, such as Target, Wal-Mart, Costco and Buybuy baby, Honest has a direct sales force to distribute its products. End users can easily purchase the company’s products in bulk at said retailers and return if not satisfied. Honest Company also employs the E-tail channel of distribution. The company uses its own website and apps, in addition to individual vendors that promote and sell Honest products throughout E-tailers such as Amazon, Ebay, Newegg, and other online vendors. Consumers can order products from the company’s website and have the items shipped to their doors. Because the company delivers a “100% money back guarantee,” customers can easily return products to the company if dissatisfied. End users can also order from other E-tailer stores, which are then responsible for item return, customer satisfaction and delivery. Honest Company also offers subscription plans targeting customers who look for spatial convenience. Subscribers are able to mix and match products of interest, schedule ship dates and frequencies for deliveries, and cancel the subscription online at anytime. Honest Company’s third distribution channel is through its ambassador and affiliate program. Although anyone can sign up for the program and become an ambassador, Honest requires each individual to have a personal website, blog, or YouTube channel for conducting business. It is important to note that the individuals don’t physically possess any product. The ambassadors simply embed or insert a promotional link with a promotional code for viewers to access. These links then redirect from the ambassadors’ websites or blogs to Honest Company’s website or to other E-tailers. The ambassador and affiliate programs benefit all parties. The end users get a discount, the affiliates earn cash for promotions, and the company gains revenue. Potential Conflict Because Honest Company has dual distribution channels, the company does not distribute its products exclusively. However, this can lead to potential conflicts in and between channels. In retail, Honest distributes its products to 20 retail stores and countless individual stores or boutiques throughout North America. These retailers have direct revenue competitions, so they will be one of potential conflicts. Within E-tail, there are countless vendors selling Honest Company’s products on Amazon, Ebay, Newegg and other online companies. At the same time, every retailers have potential conflict with the Honest. There are two reasons, the first one is if they want to increase the passenger flow and earn more, they should ensure that end users buy products on their platforms rather than buy them from the Honest online store, ambassador and affiliates. The second reason is these retailers not only sell the Honest products, but also sell their competitors' products. That will be a potential conflict in the channel distributions. Moreover, these E-tailers must compete with large chain retailers online, like Wal-Mart and Target. Each retailer and E-tailer, however, has different target segments and locations. As long as the demand for each product is large enough, conflicts can be resolved. With the right approach, each and every channel can fulfill each and every end user’s needs. Reference page D&B Business Brower, 20 Oct 2017 https://globalbb-onesourcecom.proxy.cc.uic.edu/web/Reports/ReportMain.aspx?KeyID=183481738&Process=CP& FtrID=UNIFIEDSUMMARY Honest Company, 20 oct 2017 https://www.honest.com/about-us/who-we-are Kelley, Liz, and Liz KelleyLiz is a PR professional and freelance writer. Previously, she worked at one of the largest independent global PR agencies, and advised Fortune 500 clients on their media relations and digital communications. You can follow her on Twitter @lizkelley.View all posts by Liz Kelley. “The Ecommerce Strategy Making Millions for The Honest Company.” The BigCommerce Blog, 28 July 2017, www.bigcommerce.com/blog/the-honest-companyecommerce-strategy/ Rey, Jason Del. “Jessica Alba's Honest Company is contemplating a CEO change.” Recode, Recode, 9 Feb. 2017, www.recode.net/2017/2/9/14545260/honest-company-ceo-change-brianlee. Loizos, Connie. “The Honest Company's not terrible but not very good 2016.” TechCrunch, TechCrunch, 11 Dec. 2016, techcrunch.com/2016/12/11/the-honest-companys-not-terrible-butnot-very-good-2016/. Blasberg, Derek. “How Jessica Alba Built a Billion-Dollar Business Empire.” Vanities, Vanity Fair, 25 May 2017, www.vanityfair.com/style/2015/11/jessica-alba-honest-company-businessempire. “The Honest Company.” Crunchbase, 2017, www.crunchbase.com/organization/the-honestcompany.
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RUNNING HEAD: E-COMMERCE AND DISTRIBUTION CHANNELS

E-Commerce and Channels of Distribution
The Honest Company
Student’s Name:
Affiliate University:
Date:

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E-COMMERCE AND DISTRIBUTION CHANNELS

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The Honest Company
The Honest Company is an entity that produces and distributes eco-friendly commodities.
Mostly, the company deals with household products like organic foods, sanitary and beauty
products. Like most of the companies operating in the modern market, Honest Company has
various distribution channels for their products. In addition to the traditional distribution, retail
and wholesale, the company has ventured to online distribution channels like Amazon, eBay not
forgetting retail on their website. This has enabled the company to witness a continued growth in
the industry since its launch. The company has seen great success by employing the various tools
in their day to day operations, but there is always a way to improve.
Customer Relat...


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