Beauty may only be skin deep, but the beauty and cosmetics industry is rooted in deep analytics and customer strategies. Sally Beauty Holdings is one such company that is looking closely at opportunities to better understand its customers' needs and differentiate its brand.
Founded in 1964, Sally Beauty is a specialty retailer and distributor of beauty supplies with annual revenues of more than $3.8 billion. 1to1 Media caught up with Mike Povendo, vice president of loss prevention at Sally Beauty Supply, to discuss the company's increasingly data-driven approach to the customer experience through its work with prescriptive analytics firm Profitect.
1to1 Media: What was your objective to adopt a prescription analytics approach? Is this part of the initiative to improve the customer experience at Sally Beauty's stores that was mentioned during the company's Q1 earnings call?
Mike Povendo: It absolutely is. The beauty industry is ever evolving and we have to be dynamic enough to keep up with our customers. We are by store count the largest beauty supply distributor in the world. Under the Sally Beauty Supply and Beauty Systems Group businesses, we sell beauty supplies through more than 4,000 stores. But we needed a better understanding of the data we were capturing and what to do with it. Last year, we selected Profitect as our partner because we liked the company's approach to analyzing and presenting data insights.
What was different about their approach to data and reporting?
In the old days, which was 1.5 years ago, we would get a stack of data that we had to try to interpret. And by the time the data was documented and sent to the right people who could act on those findings, the situation could be three weeks old. Now, we can get these recommendations out within about 24 to 48 hours and our people can immediately start working on it.
The other thing that's different is that the recommendation is being delivered as an email directly to a manager or department head with a subject line and message that clearly explains the issue and the action we should be taking. We can also see whether the action was taken and continue to build on it. And if it's not acted on, the issue gets escalated further.
Can you share an example of an insight that you were able to act on?
On the sales side of the organization, we look at a single item transaction and whether things can be added to it. For example, maybe a customer came into the store to buy hair dye. There are other products that can go along with the dye like gloves, swabs, or a spray bottle. But not all our associates were selling those products along with the hair dye.
And so some of our managers received an email about those single item transactions with the recommendation that they retrain their associates. The managers quickly acted upon that [insight], and are helping associates engage customers in more conversations about the benefits of our other products. Identifying an issue like that-that we need to help certain stores and associates do more upselling-is extremely beneficial and helpful to us.
What triggers the emails?
Data from our in-store POS systems forms the backbone of the program. We've got about 180 different events or rules to trigger different types of emails that go to specific stores. Some district leaders may get four emails in a day, and others could go for a week without anything. It depends on what is happening in the stores and across the company. Let's say a coupon is being extensively used at many of our stores. We can look at the coupon and sales generated from it and quickly determine whether we want to continue that promotion.
Are you working on connecting in-store data with your e-commerce site?
That's not an area I can discuss in great detail since it's beyond my scope, but I'm confident that our in-store and e-commerce sides are working together to better understand what our customers need. We're always looking for more ways to help our associates and customers and improve the 'shopability' of our stores.