UK-based cosmetics retailer Lush has begun opening stores which they are calling "Naked", where customers can purchase their products free of any plastic packaging. The company, which is already 100% vegetarian and against animal testing, is trying out this concept as a way to allow customers to buy its products without harming the environment. According to Emily Salter, an analyst at Global Data Retail, Lush has recognized that there is demand for packaging-free products and is the first mass market retailer to try this approach. The company also hopes that other retailers will follow their lead in an effort to eliminate plastic from the retail industry. Salter believes that the way that retailers will become plastic-free is through pressure from both consumers and competitors.
Source: Anna Schaverien, "Lush Creates Packaging-Free Shops. But Will Other Retailers Follow Suit?," Forbes, March 12, 2019.
-Refer to the Article Summary. By marketing to environmentally conscious customers, Lush is trying to set its business apart from competing cosmetic retailers. All else equal, if the company's concept remains successful, in the long run we would expect Lush to experience

Question

UK-based cosmetics retailer Lush has begun opening stores which they are calling "Naked", where customers can purchase their products free of any plastic packaging. The company, which is already 100% vegetarian and against animal testing, is trying out this concept as a way to allow customers to buy its products without harming the environment. According to Emily Salter, an analyst at Global Data Retail, Lush has recognized that there is demand for packaging-free products and is the first mass market retailer to try this approach. The company also hopes that other retailers will follow their lead in an effort to eliminate plastic from the retail industry. Salter believes that the way that retailers will become plastic-free is through pressure from both consumers and competitors.
Source: Anna Schaverien, "Lush Creates Packaging-Free Shops. But Will Other Retailers Follow Suit?," Forbes, March 12, 2019.
-Refer to the Article Summary. By marketing to environmentally conscious customers, Lush is trying to set its business apart from competing cosmetic retailers. All else equal, if the company's concept remains successful, in the long run we would expect Lush to experience

Quizplus · Accepted Answer

If Lush's concept proves successful and sets the business apart by appealing to environmentally conscious customers, other retailers are likely to adopt similar practices to compete, leading to increased competition. Over time, this could erode Lush's initial advantage and lead to lower economic profits as the market adjusts to the new norm of packaging-free products.

UK-Based Cosmetics Retailer Lush Has Begun Opening Stores Which They