NetSuite Blog

A 180-Year-Old Business and a Startup Both Manage Growth, Change in Dynamic Health and Beauty Industry

Posted by Branden Jenkins, GM of Retail, Oracle NetSuite

In New York City’s bustling Greenwich Village, a vintage neon sign from the 1930s invites patrons to explore the vast array of mainstream and offbeat health and beauty products within C.O. Bigelow, America’s oldest apothecary. On the shelves are typical soaps, shampoos, toothpastes and the like, along with Bigelow-branded products like Lemon Body Cream, its recipe unchanged since 1870.

While the wooden shelving, brass finishes and gas chandeliers more than a century old evoke a sense of history, making it, “by far the coolest place in New York to buy anything beauty-related,” as a Stylecaster reviewer put it, C.O. Bigelow still must deal with the challenges of a modern health and beauty company.

For many, that means a carefully cultivated and evocative brand image, showcased on a sleek, image-rich ecommerce website. Key strategies to elevate a company’s profile in this highly competitive market can include celebrity endorsements, an emphasis on organic ingredients, and aggressive social media marketing.

But beauty is only skin deep. Beneath the surface, health and beauty companies need superior operational efficiency to minimize costs and delays. Inventory, ordering and customer service need to function flawlessly to meet and exceed customer expectations.

Bigelow, in its own description, “transports customers back to a time and place of personalized attention, customized formulas and healing, and therapeutic preparations.” The store was founded in 1838, moving in 1902 two doors down the street to its present location. Bigelow has stayed true to those roots throughout its 180-year history, while simultaneously embracing modern technology to succeed in today’s ever-changing market, even in the face of stiff competition and an influx of chain drug stores.

It struck up partnerships with retailers such as Nordstrom, Sephora and Barney’s, growing the wholesale channel 20 to 30 percent annually in recent years. And notably, it does brisk business with global hotels and airlines that supply Bigelow goods to travelers around the world.

Owner Ian Ginsberg, whose grandfather purchased the business in 1939, says technology is a key ingredient to Bigelow’s success in a changing world: “We’re the ones who survived the disruption. We’re a traditional business surviving in a modern world.”

“The game has changed in all facets of retail,” Ginsberg said. “As growth has slowed, you have to learn how to make money on your bottom line. The more tools and technologies you have to improve your bottom line, the better off you are.”

Since 2013, Bigelow has used NetSuite for core functions of financials, reporting, order management, and inventory management across 30,000 SKUs. Especially valuable, Ginsberg said, are dashboards and real-time reporting that help Bigelow improve cost-efficiency and its bottom line.

Ovation Hair, a manufacturer of high-end hair care products in Carlsbad, southern California, doesn’t have the history that Bigelow does, but it’s confronting many of the same challenges. The 50-person company celebrated its 10-year anniversary in 2017 and has seen rapid growth by every measure.

It joins other upstarts that are challenging household names like Estée Lauder, L’Oréal and Unilever by opening new direct-to-consumer channels to complement traditional distribution strategies.

It comes at a special time. Global health and beauty product sales are expected to grow 73 percent between 2016 and 2025, to $750 billion, says Inkwood Research, a Boston-based research firm. Manufacturers and retailers need speed and agility to take advantage of growing opportunities.

For Ovation Hairrevenue is growing annually at a double-digit pace. It has expanded its product lineup beyond its flagship Cell Therapy product, which uses a proprietary blend of proteins, vitamins, botanical extracts and amino acids to help both women and men grow thicker, stronger, longer hair. Today, customers can choose from more than 25 products, including shampoos, conditioners, shaving lotions, vitamins and accessories.

Starting out an ecommerce pure play, Ovation Hair products are now sold on the QVC shopping channel, third-party marketplaces and through roughly 75 select salons in the U.S. And the company is growing globally. Earlier in 2017, it introduced international shipping to countries in Latin America, Asia, Europe and Africa, with ordering available online or over the phone. 

Effective marketing has been instrumental in Ovation Hair’s success. Once advertising mostly through radio spots in southern California, the company now reaches customers and cultivates evangelists through YouTube, Facebook, a blog and other social channels. And it’s grown a database of 500,000 contacts for personalized marketing engagement.

On its www.ovationhair.com website, Ovation Hair offers regular promotions, refer-a-friend rewards, a loyalty program and a 100 percent satisfaction guarantee. Subscription replenishment has proven effective in driving recurring revenue. Beyond marketing, Ovation Hair is also an in-house manufacturer, producing its products at a plant in southern California.

“Developing customer intimacy is extremely important for us,” said Erika Sherwood, Ovation Hair Marketing Manager. “The customer dictates what our next steps are in terms of product development and what they’re looking for from the company.”

Over its 10 years, Ovation Hair has capitalized on new marketing and fulfillment channels in the face of increasing competition. “The industry has evolved a lot over the past couple of years, especially with social media and influencers,” Sherwood said. “There are a lot of ‘me-too’ products out there making the same claims without substantiation.”

Deployed in late 2010, NetSuite has been pivotal to Ovation Hair’s success. The company uses NetSuite for financials, inventory, order management and manufacturing, with SuiteCommerce providing a mobile-friendly ecommerce site. NetSuite is also the repository for all customer information, providing a foundation for personalized marketing and customer service.

The ever-evolving health and beauty industry requires retailers to be nimble, agile and adaptable to change. C.O. Bigelow and Ovation Hair, two companies with completely distinct histories and backgrounds, serve as prime examples of retailers that have found success by applying these requirements. A combination of creativity, product innovation, new distribution channels and technology have helped them maintain a competitive edge and thrive. Learn more about how NetSuite supports health and beauty companies, including COOLA, Anisa International, Epicurean, Perfectly Posh and The Beauty Collective, by visiting our health and beauty page.

Learn More at NRF – Retail’s BIG Show

If you are heading to NRF taking place January 14-16, be sure to schedule a demo to experience NetSuite’s software used by health and beauty companies like C.O. Bigelow and Ovation Hair. Your brief, 15-minute demo will have a big impact. NetSuite, through RetailROI, will be donating $300 to the Miracle Foundation for each person that schedules and attends a 15-minute demo during NRF, providing clean water to orphans in need.