Omnichannel shipping never looked so good

Sally Beauty Holdings uses IBM Sterling software to boost sales for DIY products
by Karen Boush
6-minute read
A smiling woman opens a medium-size box delivered to her home

In spring 2020, many people became daredevils when it came to styling their hair. The coronavirus had arrived in North America, and salons and barbershops had temporarily closed or limited their operations. Consumers who had never considered such risky behavior as coloring their own hair went online to purchase do-it-yourself (DIY) dye kits and other self-care products.

“The pandemic was a little bit of a perfect storm for us, if we’re being optimistic,” says Sonoma Taylor, VP Solution Delivery at Sally Beauty Holdings, Inc., a global distributor and specialty retailer of professional beauty products. “We already had a big focus on professional-grade, DIY brands, and now the consumer had more time to use them and more opportunity to experiment. I mean, since you’re not going to the office anyway, you might as well dye your hair purple.”

Sally Beauty Holdings operates through two business enterprises: Sally Beauty Supply LLC to serve consumers, and Beauty Systems Group LLC (BSG), branded as Cosmo Prof, to serve salon professionals. Not surprisingly, Sally Beauty Supply experienced a huge spike in online demand at the pandemic’s onset. At the same time, government mandates and company concern for employee safety slowed operations at the retailer’s three US distribution centers.

“The consumer really started wanting our products, but we weren’t always able to ship from the warehouses,” comments Taylor.

Fortunately, the previous year Sally Beauty Holdings had embarked on a digital transformation to improve its omnichannel B2C and B2B customer experiences. The company wanted to drive higher sales and customer satisfaction by simplifying ordering and purchasing processes and offering seamless services to online and in-store customers.

As part of that initiative, Sally Beauty Holdings modernized its order management and fulfillment system with the IBM Sterling® Order Management platform. The solution provides centralized, real-time visibility into and management of inventory, orders and fulfillment. It also helps streamline deployment of ship from store (SFS) and other digital fulfillment options. In addition, IBM offers the industry expertise and knowledge to help guide the company through a digital transformation.

Sally Beauty Holdings collaborated with IBM Business Partner Perficient Inc. to implement the IBM Sterling platform on IBM Cloud®, which provides the scalability, availability and security-rich features to support diverse business lines and services.

Time-to-market deployment of SFS capabilities in

3

weeks

2 million SFS shipments fulfilled since 2020, increasing sales by

540%

Thank goodness we have the IBM Sterling platform to help us keep ahead and respond quickly to marketplace demands.
Sonoma Taylor
VP Solution Delivery, Sally Beauty Holdings, Inc.

By March 2020, the company had successfully completed several initial deployments on the new platform. It had launched the order management system, including ship-to-me functions, for sallybeauty.com and cosmoprofbeauty.com. It had also enabled online order fulfillment for Cosmo Prof direct sales consultants, introduced same-day-delivery (SDD) capabilities on cosmoprofbeauty.com, and piloted a SFS program for sallybeauty.ca involving 16 Sally Beauty stores in Canada.

Then, with the sudden arrival of the virus, Sally Beauty Holdings immediately considered what it could quickly do to meet surging online demand for DIY products while still delivering an optimal customer experience.

A woman wearing plastic gloves uses a pink brush to apply hair dye
A woman with hair dyed bright blue at the ends works from home on a laptop
We immediately collaborated with IBM and Perficient to resize our cloud capabilities, and within hours we were back up and running. We’ve never had a performance issue since.
Sonoma Taylor
VP Solution Delivery, Sally Beauty Holdings, Inc.
“An incredibly strong application”
We immediately collaborated with IBM and Perficient to resize our cloud capabilities, and within hours we were back up and running. We’ve never had a performance issue since.
Sonoma Taylor
VP Solution Delivery, Sally Beauty Holdings, Inc.

Sally Beauty Holdings’ next steps revealed its resourcefulness and agility. The business couldn’t fulfill orders on a timely basis from its distribution centers, so it found an alternative way.

“We said, ‘We’ve got a lot of inventory sitting in our Sally Beauty stores in the US. Why don’t we just roll out ship from store? This would allow us to extend our product assortment while our suppliers are not fully operational. It would also give our store associates jobs and our customers a chance to come shop us,’” Taylor explains.

Within three weeks, the company enabled 2,700 of its 3,300 US retail stores to function as fulfillment centers. Essentially adding thousands of new shipping nodes to its US network, the company significantly increased customer satisfaction and sales.

Taylor describes the in-store execution of new SFS capabilities, including establishing and training new business rules for order distribution and transportation, as a complicated process. Capitalizing on its IBM Sterling Order Management solution, the team rapidly got the work done.

“It was super stressful, but that’s what the IBM application is built for, to understand where the demand is, where the inventory is and how to best get it to consumers. It is an incredibly strong application that can be flexibly configured to do what we need it to do,” she says.

The team also closely worked with IBM and Perficient during the implementation, including applying agile delivery methods to integrate the application into the company’s point-of-sale system. “I have to give all the credit in the world to the IBM support team and to our Perficient team for working closely with our Sally Beauty teams to deploy a consolidated and comprehensive solution,” Taylor says.

For instance, shortly after going live, the SFS application performance dipped because of the huge transaction volumes. “We use a software-as-a-service (SaaS) delivery model, and outside of this moment we’ve never had any issue as it relates to scalability and performance,” says Taylor. “But when you scale your e-commerce operations like we did, you’re going to have a little bit of a challenge. We immediately collaborated with IBM and Perficient to resize our cloud capabilities, and within hours we were back up and running. We’ve never had a performance issue since.”

Learn how to build smarter supply chains

Fast to enable SFS capabilities, Sally Beauty Holdings attracted new B2C customers during the pandemic’s early months in North America. However, supply chain disruptions had fragmented in-store inventories, so customers often received split order shipments. To improve the brand experience and minimize its shipping costs, the company gradually reduced the number of stores offering a SFS option from 2,700 to 245 stores. The business continues to optimize the network, helping streamline inventory allocation.

In April 2020, as some stores began safely opening back up, Sally Beauty Holdings also quickly piloted and then rolled out curbside pickup and buy online pickup in store (BOPIS) capabilities for most Sally Beauty Supply stores in the US and Canada. This model further reduced order splitting and shipping costs, while helping new customers become more familiar with store locations and product assortments.

More than a year after the pandemic began, the digital transformation at Sally Beauty Holdings continues. In the summer of 2021, the company introduced BOPIS options for cosmoprofbeauty.com. It is also in the process of deploying same-day, two-hour delivery for sallybeauty.com, and same day, three-hour delivery for cosmoprofbeauty.com.

“We remain focused on having inventory in the right place at the right time, so customers have excellent experiences, and we optimize costs,” says Taylor.

Online sales soar by 540%

Having deployed SFS capabilities for 2,700 US stores in just weeks, Sally Beauty Supply has made more than two million SFS shipments and increased sales by 540%. Also, 1,046 participating Cosmo Prof stores have fulfilled more than 42,000 SDD shipments.

With the IBM Sterling platform, Sally Beauty Holdings can now offer a truly omnichannel purchasing experience, empowering customers to engage with the brand through the avenues of their choice. By enhancing its online businesses with advanced fulfillment options, the company not only improved customer satisfaction but increased profitability.

Looking back on the past 1.5 years, Taylor notes that it’s been a wild ride. “It’s just incredible to think back on how much we’ve done in such a short amount of time,” she says. “We honestly count ourselves a little bit lucky that we had at least started our digital journey in time for the 2020 year and all that it brought.”

And the journey continues for Sally Beauty Holdings. Taylor anticipates adopting IBM Sterling Fulfillment Optimizer with Watson software to further enhance the purchasing experience, including optimizing post-order processes by forecasting demand for inventory at fulfillment locations. The company will also look at how to better service salon professionals and field sales consultants through its Cosmo Prof website.

Taylor recommends that retail enterprises stay flexible in how they harness the power of the Sterling platform. “The solution continues to evolve and add new capabilities, but consumer expectations change, and operations change,” she says. “We know we can confidently introduce new capabilities to meet those demands and later revisit and refine those decisions to drive different outcomes.”

Even though the initial rush for DIY products has tapered, demand for at-home hair, skin and nail care products is expected to continue. A few other things are certain, Taylor says. Consumers won’t give up online shopping conveniences introduced during the pandemic, and supply chains won’t always flow as expected.

“Thank goodness we have the IBM Sterling platform to help us keep ahead and respond quickly to marketplace demands,” she says.

Sally Beauty Holdings, Inc. logo
About Sally Beauty Holdings, Inc.

Headquartered in Denton, Texas, Sally BeautyExternal Link is the world’s largest distributor and retailer of professional beauty products based on store count. Sally Beauty Holdings serves both retail consumers and salon professionals by offering thousands of products for hair color and care, skin and nails. With 27,000 employees and 3,700 stores worldwide, the company generated USD 3.5 billion in sales in 2020.

About Perficient Inc.

Based in St. Louis, Missouri, IBM Business Partner PerficientExternal Link is a global digital consultancy offering strategy, creative and technology capabilities. It brings big thinking and innovative ideas, along with a practical approach, to help the world’s largest enterprises and leading brands succeed. Founded in 1997, Perficient employs approximately 3,300 people who work across North America and in Europe, India and China.

Solution components
Sally Beauty Holdings, Inc. logo
About Sally Beauty Holdings, Inc.

Headquartered in Denton, Texas, Sally BeautyExternal Link is the world’s largest distributor and retailer of professional beauty products based on store count. Sally Beauty Holdings serves both retail consumers and salon professionals by offering thousands of products for hair color and care, skin and nails. With 27,000 employees and 3,700 stores worldwide, the company generated USD 3.5 billion in sales in 2020.

About Perficient Inc.

Based in St. Louis, Missouri, IBM Business Partner PerficientExternal Link is a global digital consultancy offering strategy, creative and technology capabilities. It brings big thinking and innovative ideas, along with a practical approach, to help the world’s largest enterprises and leading brands succeed. Founded in 1997, Perficient employs approximately 3,300 people who work across North America and in Europe, India and China.

Solution components