Industry: cosmetics, personal care
Name of contact, if available: Mark Wolverton, CEO
Description of how social media is used for business performance
When considering the level of speculation, blogs and availability of specialty business networks such as Procurious, it’s hard to ignore the promise of social media in supply chain management (SCM).
For the supply chain, that promise may come in the form of more efficient processes, reduced operating costs, and better or new supplier partnerships. For the consumer, there is the advantage of improved transparency of the supply chain involved for a given product. Sourcemap is one social media tool that allows users to plot the supply chain path taken by a given product, getting a full view of the ethics and sustainability of the path travelled from source to consumer and everywhere in between. Businesses can us Sourcemap’s Enterprise version to optimize their supply chain and connect with new suppliers in the network.
Putting promise into practice, Supply Chain Digital suggested three starter approaches to putting social media to work in the supply chain:
- Predicting demand – You can find relevant indexes for your industry that are built on data harvested from social media activity, and then use them to help predict demand.
- Improving assortment planning – Because consumers use social media to talk about companies, you can use this information to take care of assortment planning upfront.
- Refining shelf placement – Just as social media data can be used for assortment planning, the sentiment gleaned from this data can be used to refine where specific products are placed on retail shelves.
A 2014 Fronetics report found that a majority (68%) of supply chain and logistics companies are already capturing benefits of social media, with the greatest benefits being in the areas of customer engagement and market intelligence.
Enter cosmetics company Lush, born in 1995 in the United Kingdom and brought to North America – Vancouver to start – by Lush Canada CEO Mark Wolverton. With a presence in 46 countries, the concept for the more than 800 Lush stores is akin to a deli, where freshness is king. For a cosmetics company, that means producing bath, body, hair and skin care products that are made with fresh ingredients and sold fresh to consumers. For some products, maintaining that freshness requires refrigeration (fresh face masks), while others come stamped with a best-before date. Lush is vehemently against animal testing, and does not deal with companies that directly or indirectly perform animal testing. All products are vegetarian.
In an industry that has had its fair share of ethical challenges – from animal testing to earth-unfriendly packaging – Lush operates on an ethics-first position. In its retail stores and through a robust online presence, the Lush story is on display. It tells tales of fresh, handmade products, an ongoing fight to stop animal testing, a commitment to running ethical campaigns, and pledges of charitable giving. In reading the story, you can almost hear Lush’s sustainability story told in earthy song; for a true audio experience, visit a Lush store or SoundCloud:
In terms of SCM, Lush shares its aims on social media: wrap products in minimal packaging – naked where possible – that is recyclable, compostable or biodegradable. Raw materials are purchased from suppliers that operate green, and there are ongoing efforts to minimize the impact of all of the transportation required to bring materials to Lush factories.
Lush has an ethical buying team that is charged with personally investigating the conditions surrounding the growing/harvesting of raw materials, as well as the working conditions and business practices of the suppliers they purchase their ingredients from. That could mean visiting Vancouver-based free-range egg producer Rabbit River Farms, or the Ojoba Women’s Cooperative in Ghana, West Africa.
In addition to using social media to illustrate their supply-chain ethos, Lush uses big data from social media and a point-of-sale platform to manage stock in individual shops and across other stores in the supply chain. In 2014, Lush reportedly saved £1 million with this type of user-driven business intelligence.
For Lush’s core audience – anyone, as Lush has something for everyone, Wolverton has said – green, sustainability and ethical are more than buzzwords. They’re words to live by. Those fans are 860K strong on Facebook, with 1.4 million Instagram followers and 227K Twitter followers – numbers worth connecting with.
Lessons for others:
- Live the ethics you espouse. If green is thing, ensure that your supply chain emits the same hue, from source to consumer.
- Maintain an online presence in the forums where your consumers lie, and don’t be afraid to share those boring policy bits with them. This can be in the form of omnipresent pictogram mantras . . .
. . . and fleshed out stories about how your supply-chain policy is equal parts and promise and practice.
- Take advantage of big data and apply it to inventory and supply chain management. There is money to be saved.
- It is possible to be the change, be profitable, and be ethical.
Submitted by: Melanie Windover
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