LUSH Handmande Cosmetics - Canada
When LUSH Fresh Handmade Cosmetics tallied the pain from two disparate POS systems and five databases covering a hundred stores in the United States and Canada, the mandate for system-wide conversion was clear. Corporate staff spent hours manually polling, normalizing, collating, and verifying store data. Month-end closings took weeks. Store managers had to know their system’s quirks and update stock changes by hand. Microsoft Dynamics™ Retail Management System offered a solution that could expand with the chain, yet flex as business demands evolved. Today, a central database and strong reporting tools help complete once-tedious chores, monthly closings take a day, and store managers see automated daily updates on their screens each morning.
Situation
LUSH Fresh Handmade Cosmetics, based in Vancouver, British Columbia, works to preserve the environment as it flourishes financially. LUSH’s 1,200 employees manufacture, distribute, and sell 350 SKUs of personal care items including bath, body, hair care, skincare, and gifts. By the end of 2007, they sold through 180 lanes in nearly 100 stores in street-front, mall, and airport locations, through print catalogs, mail order, and online ordering. Expansion plans for 2008 include boutiques within USA-based Macy’s Department Stores, and possibly Bloomingdales Department Stores.
LUSH strives for natural and vegan products, made in smaller lots, without animal testing, and sold in minimalist, reusable, or recyclable containers disclosing all ingredients. The company’s value proposition is, “We believe that our products should be good value, that we make a profit, and that the customer is always right.”
But trying to uphold this proposition with obsolete retail technology, Linux infrastructure, and inefficient procedures drained human and financial resources. LUSH needed a retail makeover and a stable base upon which the business could grow.
“At the store level, we had eight versions of two antiquated point-of-sale systems,” says Mike Coulter, IT Director. “One held transaction data without line-item totals; the other had our extended line-item pricing. We maintained five databases, five sets of SKUs and prices, and five comm methods. We dealt with U.S. and Canadian currency conversions and had separate pricing for retail, mail order, and online. One system measured items sold by weight in grams, another in 100-gram units, and the U.S. systems didn’t support French, and measured in pounds.”
“As we grew, getting timely and accurate chainwide data became increasingly difficult. We had to manually poll each shop’s transactions, check for accuracy, normalize quantities, units, and transaction totals, and then create a single large table. The process was not reliable because we weren’t certain whether a store's records were complete, which stores had reported which days, or even if all stores had reported. Without central system admin, managers had to manually run processes to update products or prices—which didn’t always happen.
“Typically,” concludes Coulter, “it was the tenth or twelfth of the month before we had a clue about last month’s sales. Forget about knowing daily information or having insight into shop systems or their potential issues.”
Solution
“We inspected about a dozen systems and seriously considered three,” Coulter says. “We tested one in six sites but it required double maintenance of U.S. and Canadian data structures. Another came from a small vendor with no large reference sites.”
LUSH’s IT and management teams chose Microsoft Dynamics™ Retail Management System (RMS) business software. “Microsoft’s retail solutions satisfied our lengthy requirements list and came highly recommended for flexibility, breadth, and scalability.
Chainwide Rollout in Two Countries
“To help LUSH smoothly install Microsoft Dynamics RMS chainwide, we formulated a two-stage rollout plan and assigned project manager Heidi Stieh as LUSH’s go-to person. In Vancouver, Stieh helped roll out the first two stores; then helped with four in Toronto. The conversion entailed a move to TD Merchant Services in Canada, Bank of America Merchant Services in the USA, and integrating Givex gift cards across all locations.
“We remotely deployed the remaining 60 sites in January 2007 and were fully live by February,” says Coulter. A typical setup is two POS tills per location with one running the database. LUSH uses consumer-class broadband with a security router configured for VPN connectivity and “failover” capability that dials out if the high-speed trunk is down.
Adapting to New Power
“The basic POS is very intuitive and requires little or no training,” reports Coulter. Coulter says. “We developed a chaptered curriculum and trained about a thousand staff and management in a series of Web sessions.”
Coulter admits the new capabilities—and tighter procedures—generated some culture shock. Formally tracking inventory, running proper reports, and communicating among all stores gave employees new disciplines to learn along with their new speed.
“But clean information makes our reports clean and quick to run. They take almost no training, and are easy to tailor,” Coulter says. “We empower certain store staff to run ad hoc reports, yet the security modules ensure they don’t see beyond limits we set. Finance and manufacturing run reports extensively, and we can alternate with Crystal Reports for exception reporting.”
Integration with Other Software
Microsoft Dynamics RMS Store Operations tracks individual store sales, demographics, inventory, and purchasing, and then sends data to Microsoft Dynamics RMS Headquarters in Vancouver. This top-level central solution enables chainwide overviews, drill-downs, and filtering for reporting by region, store, department, and other criteria. It enables executive control of pricing, inventory, and sales events by equally broad criteria.
Coulter reports, “Scheduled scripts capture transaction records and purchase-order details and create files for our financial system (Sage Accpac) and our manufacturing system (QAD Manufacturing Pro). That once-awful, manual, redundant, error-prone process is nearly fully automated, and we are fast-tracking a plan to push our Web sales into Microsoft Dynamics RMS tables.”
LUSH now enjoys integrated reporting with its Web system for consolidated month-end reporting, integrated journaling through to its financial system, and integrated product ordering from POS through to its manufacturing system. In addition to serving store and IT staff, the new solution serves eight employees in finance, six in distribution, two in marketing, and one trainer. Further, using the new solution, IT staff provides remote support to all stores.
Benefits
“Having a single, detailed, continuously updated, company-wide database has resolved scores of time-draining problems—at our stores, at headquarters, and in every department that uses the solution. Microsoft Dynamics RMS has satisfied all our requirements,” says Coulter.
“I’d estimate we save 100 hours per month in month-end processes. Sales polling and stock tracking—once huge tasks—now just happen. We’ve eliminated collecting, normalizing, and consolidating information. That was a massive data entry burden for many staff.
“Having one chainwide POS means store managers don’t have to be the on-site expert in their version of the system. That entire administrative burden moved to IT where it belongs—and where it’s easy. Stock and price updates, once a chore for each manager, now just appear on their systems.”
Faster Closing, Faster Response
Coulter says, “Month-end reports now take one day to send to finance, versus two weeks. Having sales data automatically available at headquarters each morning provides us many benefits we’d previously missed. Finance can better manage cash flow and make better business decisions. Manufacturing has better insight into upcoming production quotas. Store managers see their metrics across all regions. And showing every shop’s daily sales ranking sparks competition and drives sales.
“We’ve gained real-time inventory management—something we’ve never had. Because we manufacture our own products, knowing timely and true stock levels saves us money along our entire supply line, from ordering raw materials to wisely distributing finished products around the chain.
“Microsoft Dynamics RMS has greatly improved staff’s perception of our organization. We’re more professional and efficient, and staff feedback has been extremely positive.
More Growth Ahead
The logical database structure of Microsoft Dynamics RMS enabled Coulter to start experimenting towards a retail capital asset tracking system within Microsoft Dynamics RMS Headquarters. “The nature of its item hierarchy, departments, and categories allow me to create a hardware hierarchy, allocate it, and track it to all shops,” he says. “We plan to leverage Business Intelligence and Analysis Services in Microsoft SQL Server® 2005 to give management even more access to retail metrics. I’m confident these new efficiencies will enable us to support more and more stores without hiring more IT staff.
“To Do What We Did...”
Coulter offers advice to other chains contemplating large-scale conversions: “Select an experienced, hands-on vendor like Tri-City Retail. And then plan, plan, plan.
“It’s tempting to neglect staff education, but don’t. The logic of Microsoft Dynamics RMS made staff think they didn’t need training. We required it to enforce standard procedures and the handling of odd situations.
“Always roll out in stages. For the first 30 to 60 days, we implemented just the POS before going ‘live’ with inventory management. This helped us tremendously. We learned a lot, standardized early, and didn’t have to backtrack.”
For More Information
For more information about Microsoft RMS, Point-Of-Sales software and other hardware, call American Retail Supply Computer Solutions at 800-426-5708