Innovative Retailer: THG Ingenuity

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Name: The Hut Group

The Place: Based in Manchester Airport City. And building a really huge HQ there even as we speak plus its ICON building, which is all about content creation. But also fulfilment and warehousing centres across the world.

The Story: It’s a funny one. Ask most people what does The Hut Group do? And they probably won’t know. Because it’s not a brand itself. It just owns an awful lot of brands and it powers their e-commerce platforms and other people’s businesses on a white label basis.

The Hut Group HQ under construction as we speak

Oh, one of those: Stop it. It has customers in 169 countries.

What? Don’t get sniffy. And a workforce of 7,000.

I’m not getting sniffy: Yes, you are. You think it is just a tech company full of geeks pretending to be really interested in selling lipstick but actually they could be selling just about anything.  But you’re wrong. This is an outfit which yes, is expanding at a rate of knots by buying and buying and buying some more online brands but then it superpowers their brand offering and you know…

Takes it to the next level? Exactly. That’s Ingenuity.

It certainly is: No, I mean, that’s what its e-commerce platform is called THG Ingenuity. This is what it started out as – right at the beginning, a white label solution and there’s a lot of money in that – just ask Ocado. But now on the grounds that there is nothing new under the sun it is almost coming full circle and its acquired online brands are now wanting to get into bricks and mortar buildings with their consumers and build a rapport, tell a story, build a narrative.

Well, they were before covid struck anyway: And they will again. But we’re not talking about anything as mundane as a shop here. LOL.

Aren’t we? Dear me, no. We are talking about curated content, about influencer-led experiences, about a collision of the offline and online worlds, about bringing brands to life in infinity pools overlooking Manchester.

Yes, I think you’d better start at the beginning because you’ve lost me: The main man here is the current CEO and founding father Matthew Moulding who in 2004, after an upbringing which apparently left something to be desired on the stability front, found a place that suited him at Caudwell Group where the firm but fair boss John Caudwell taught him a thing or two about success and failure. Then in a Eureka moment he bought a cheap CD online and thought “that’s the business for me”. So he and his colleague John Gallemore did just that with some money from friends and family.

Matthew Moulding, founder and Chief Executive and all round entrepreneurial type

But it doesn’t sell CDs does it? It began as a gaming and entertainment business but there has been a concentrated move away from those low-profit margin items like books and CDs in the last decade and now it is much better known for its wellness and international beauty portfolio, which includes the kind of brands that you only know if you are a digital-first shopper.

Oh please. Try me…MyProtein, Coggles, Glossybox, Illmasqua.

Ummm: OK, how about AllSole, MyBag, Exante?

Alright, fair enough. See? And it takes those little brands from all over the world that you, poor high street retailer-focused invididual that you are, and it puts them onto the Ingenuity platform with its seamless end-to-end fulfilment, marketing and all the rest of the show and voila! 0– 60 in a matter of weeks.

A glorified marketing machine then: Not at all. Manufacturing is key so that little lipstick brand will have the might of The Hut Group’s manufacturing facility to develop and make its range from now on. But of course, as I’ve already said that’s only half the ingeniousness of Ingenuity.

Go on then: It’s the white label thing innit. Who knows which bit will be more profitable in the long run but as quick as it’s buying little brands up it’s announcing partnerships with huge companies who want to develop a whole new relationship with their consumers. Honestly, it’s a win-win for The Hut Group.

Give me an example: No problem – April 2020, Nestle linked up with Ingenuity for a big programme involving Nestle Health Science where it will deliver a fully-serviced global health platform for the brand.

Are you telling me Nestle cannot do this for themselves? Well, they obviously could but Ingenuity does it already and it does it so well that it just doesn’t make any sense for Nestle to do it. And as long as brands want to keep connecting direct to their buyers, and get hold of all that lovely customer data instead of giving it to a supermarket for instance, then Moulding and his business cannot lose. The Hut’s global fulfilment network consists of 12 centres all serviced by 150 final-mile delivery options – if you think Nestle can be bothered to organise all of that for themselves when it’s ready and waiting for them via Ingenuity then I pity you.

It’s a whole new world: Latest full-year results were up 24% to £1.14 billion. Honestly, it’s only going one way and that was before Covid-19 pushed everyone online. As much as 66% of sales now come from overseas (it’s huge in Asia) while more than half of its money is earned on its own-brand products. In June another £100 million partnership was announced with brands such as Burt’s Bees, PZ Cussons and Elemis for the usual services, thank-you very much.

Is the old Ingenuity platform really worth this much lucre? Absolutely. THG develops additional features constantly.

Such as? Such as the recently-filed patent for its Foundation Finder, which colour matches products from home using machine learning and computer vision technology. But let’s finish on infinity pools.

Is it the inside of Battleship Galatica? No, it’s THG’s new headquarters

At last: THG understands well enough that the marketing of these brands is utterly crucial so while it does not in any way want to be an hotelier it is quite busily buying up several high-end hotels to add to its country club and spa. And 100 King Street in Manchester is also now in the portfolio.

And what is going to happen there? It’s going to be a unique creative space and a studio. This is how seriously Moulding takes the business of content creation and influencer marketing for his brands.

All in all a far cry from selling ASDA’s entertainment category goods for them: It so is.

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