Target and Toys R Us posted overall sales declines during the holidays.
At custom cosmetics maker Reflect.com, a web-based front end integrates with manufacturing and distribution systems to efficiently downsize mass-production to custom units of one.
The Internet’s integration of order-processing, manufacturing and distribution operations has been a linchpin in the business model of Reflect.com, an online retailer and manufacturer of custom cosmetics, COO Alex Zelikovsky tells Internet Retailer. Four-year-old Reflect, a spin out of CPG giant Proctor & Gamble, has survived while other Internet-launched beauty sites have faded by taking a different approach: it offers cosmetics formulated to the needs and desires of individual consumers, as determined online with an interactive system it calls neural profiling, at an affordable price. Though he won’t disclose numbers, Zelikovsky says Reflect, founded in 1999 in the heydey of Internet start-ups, is meeting goals and is close to profitability.
Gearing the manufacturing and distribution process to individual units instead of mass production runs was a major challenge, and the web has been critical to getting the customer information, directing manufacturing, and tracking each product through distribution, says Zelikovsky. “Without the Internet, the customization would be extremely difficult to conceive and deliver. It’s played a huge role,” he says.
Reflect’s home-built system integrates the online profiling and order taking, direction of manufacturing, and packaging and distribution at different facilities. The end-to-end system incorporates both elements of Reflect’s creation and applications from various vendors. To direct the hand-finishing of each product at its distribution center prior to shipment, for example, it uses warehouse software from Optum Inc. Among other tasks, the software manages the workflow by distributing directions to workers on what to add to each container of custom product, including labels, type of bottle stopper or lid, directions to the consumer on product use, and more, from a series of radio frequency-controlled terminals on the distribution center floor.
“It’s ‘get this, get that, put it together this way,’’’ says Optum co-founder John Davies. “The system directs workers on how to pull it all together and it synchronized those activities in real time.”