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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