Hair Salon Chain Pins Future Growth to the Cloud

Posted by Rob Hooton, Vertical Market Expert, Ecommerce, NetSuite APAC

How important is the cloud to the growth of your business? Consider why Hairhouse Warehouse (HHWH), Australia’s leading hair and beauty retailer and salon and beauty services provider, is moving its entire enterprise, including its stores and ecommerce business, to NetSuite's cloud-based OneWorld platform. HHWH is planning a global growth strategy that will expand its market beyond its existing 140 franchise-operated stores not only in Australia but other countries around the globe. Michael O'Connell, CFO of the company, candidly explained why NetSuite's integrated, cloud-based platform is critical to its future plans in a recent webinar: ‘Three Steps to Realising Hairhouse Warehouse's Retail Future.’ O’Connell discussed that the company's IT systems were disjointed and inflexible, unable to support all of the new processes and data sharing that such a massive growth plan would require. The accounting data was in one system, inventory in a second, and CRM, retail and salon services in yet other systems.

"Our business had grown faster than our back end systems could support,” O'Connell explained. “What customers were seeing in our stores - the slick, professional services and look - was not matched by the infrastructure behind it."

That meant employees were less productive, being forced to re-input data into multiple systems, while managers lacked visibility into real-time data and intelligent analysis to guide them in making important business decisions. Obviously, such an aging network of silos could not support the company’s long-term strategic plan.

HHWH has a unique business model where each HHWH location provides multiple types of services, including salon, piercing and beauty services and retail stores, while the company also operates an ecommerce site. This model, combined with the franchise structure of the business, create a complex set of business needs. Individual franchisees needed to operate somewhat separately, depending on their market requirements, but still use the same integrated system and have chain-wide data and benchmarks available for evaluating their performance. O'Connell explained that the company's plan was based on attracting franchise operators in new markets - yet the IT systems could not easily produce even basic benchmark reports on its retail operations to show prospects.

"To generate any management reports, we had to export data out of multiple reporting environments and massage them in Excel," explained O'Connell, adding that even the scheduling of appointments at the store level was done on a paper appointment calendar.

When HHWH executives decided to overhaul the company’s computing systems, they researched potential software providers very carefully, drafting a detailed RFP with HHWH requirements to 35 providers that the upgrade team had identified as offering possible solutions. After receiving answers and vetting the applications, the HHWH team selected a short list of five to invite in for detailed demonstrations and interviews by a large project team composed of employees from all parts of the business as well as franchise owners. As the organisation started to assess the various mobility options with the goal of expanding globally in the future, HHWH decided that a cloud solution was the best option. Based on the detailed vendor demonstrations, the project team selected NetSuite's cloud-based platform to handle its entire operation, from accounting and CRM to inventory and retail.

As a leader in cloud ecommerce software, NetSuite manages over 3,000 ecommerce deployments globally, which equates to over 6 million orders and over 150 million page hits per month.

The first stage of the HHWH rollout, which began in the first half of 2013, was done with NetSuite Financials. That deployment took about 10 weeks and was followed by phase two: in-store testing of the entire ERP suite during June and July, 2014. The final roll out of ecommerce and Retail POS will commence soon.

One benefit that HHWH is looking forward to is access to real-time data on information like inventory stock levels and ecommerce, so that customers who order a product for in-store pickup or ‘click and collect’ don't find out that the product is backordered only after they arrive at the store. It is interesting to note that there is a unique model at play here; omnichannel commerce is being leveraged to drive the franchisees’ core business model – that of selling salon services – which is traditionally very much a bricks and mortar offering.

Another big benefit O'Connell is eager to take advantage of is the new intelligent reporting and the target marketing potential that the NetSuite SuiteCommerce and NetSuite POS (Point-of-Sale) solutions will offer.

“Previously, one of our staff would spend approximately three days every week extracting sales data from 140 of our franchise stores to enable us to calculate, invoice, and direct debit weekly fees from our franchises. The automation of that process with NetSuite means we can now do that in less than half a day,” added O’Connell.

"With the database we can build around the salon services now, we can see when people visited the salons, what they had done, which stylist serviced them, and what adjunct products they bought. This will enable us to target customers more successfully. For instance, if we don't see a particular customer for a month or three months, we can take note of that and provide product targeted offers for these people," O'Connell said, noting, "It's going to help us develop more long-standing relationships with our clients."

HHWH will also be able to look at ways to acquire new salon customers through ecommerce, which they had no way of being able to do before.

For HHWH, it was not only about finding a solution that met the company’s needs now; it was about finding a solution that will meet its needs in the future. HHWH is comfortable that the future enhancements of the NetSuite solution will continue to support its evolving needs.

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