As retailers boost omnichannel strategies, careful coordination of online and in-store efforts must address a somewhat surprising truth. While consumers research and vet their purchases online, more than 90 percent of actual purchasing decisions still occur in the store, according to RSR Research.
It’s less surprising then that for companies born entirely online – like e.l.f. Cosmetics – growth has been fueled by its in-store channels – both its own brick-and-mortar presence and chiefly, on the shelves of the stores of the world’s largest big-box retail chains.
In just a decade since its founding, e.l.f. Cosmetics has flipped its chief revenue stream from online B2C sales of its cosmetic and skin care products, to B2B sales with Walmart, Target and other retailers. It’s a shift that NetSuite helped to empower – and one which e.l.f. Cosmetics will continue to leverage its NetSuite partnership to fuel.
“In 2017, over 80% of our net sales was through national and international retailers,” said Ramesh Cooke, director of enterprise applications, e.l.f. Cosmetics. “NetSuite allows us to successfully attract and retain larger retail partners.”
Foundation for B2B growth
As e.l.f. Cosmetics’ online business surged and it sought to diversify its revenue stream, it needed to automate financial processes to enable efficiencies and prepare for growth. It began implementing NetSuite OneWorld in 2015 to replace a custom-built AS/400 system and automate financial and inventory management processes across a business network that spanned its Oakland, Calif.-based headquarters, its China-based manufacturing and its third-party distributors.
With best-in-class financial processes under its belt, e.l.f. Cosmetics shifted its focus in 2016 to optimizing the entire order-to-cash process. Orders coming in through a legacy system weren’t integrated with financial and inventory management data in NetSuite, meaning that the business had to manually rationalize numbers outside of the system to gain visibility into everything from order status to item availability. Employees spent needless time chasing down information on orders.
In 2016, e.l.f. Cosmetics brought on board Cooke, who has nearly two decades of experience in supply chain transformation, to optimize inventory and order management processes that spanned both B2B and B2C sales.
“The finance team had stable business processes in NetSuite, and operations and the rest of the organization were not getting as much benefit,” he said.
Cooke knew that one of the biggest barriers in speeding adoption and realizing the benefits from process automation is change management. Having worked heavily with SAP software prior to coming to e.l.f. Cosmetics, Cooke expected some resistance in trying to get staff that managed inventory and ordering processes to make the shift to NetSuite. But NetSuite’s flexibility made it easy to configure the software to users’ needs, and an intuitive user interface shortened training and adoption to accelerate that journey.
“NetSuite is simple to configure, flexible and easy to understand and provides a much shorter change management barrier,” he said.
End-to-end visibility lends efficiencies
NetSuite’s flexible development platform allowed the team to easily build an integration between the legacy order management system and NetSuite, exposing information through a dashboard that allows employees to consume unified financial, order and inventory data in real-time. This has streamlined transactions with its China-based manufacturing and third-party distributors to optimize its stock. Now, e.l.f. Cosmetics can meet fast turnaround times for invoicing partners. And with real-time visibility into inventory and orders, the business ensures accuracy in those processes, as well as on-time delivery across B2B and B2C channels.
e.l.f. Cosmetics has opened 22 brick and mortar stores across the United States which allow the company to test new products, solicit customer feedback and provide another avenue for the company to delight its consumers. Integrated, real-time inventory and order management has streamlined transactions with B2B partners.
With NetSuite’s multi-currency support, e.l.f. Cosmetics is positioned to expand internationally – and can leverage data for insight-driven decisions on where to launch new stores or partnerships. Additionally, NetSuite will easily scale to accommodate increases in the number and types of products e.l.f. Cosmetics sells as well as expansion into new markets and retailers.
“We have users comfortably using NetSuite, and we’ll continue to build out best practices and KPIs across the organization,” Cooke said.