July 1, 2004, 12:00 AM

How a 2-year-old cosmetics e-retailer maintains steady 15% monthly growth

Saffron Rouge attributes much of its growth to a web-based application suite designed to integrate customer activity across three channels and run personalized marketing campaigns based on customer activity.

Saffron Rouge Inc., a 2-year-old e-retailer of organic cosmetics and body-care products, attributes much of its steady growth to a web-based application suite designed to integrate customer activity across three channels and run personalized marketing campaigns based on customer activity, Jeff Binder, CEO and co-founder, tells InternetRetailer.com.. “We’ve been growing about 15% per month since we started two years ago,” he says.

Saffron Rouge, based in the Toronto suburb of Guelph, ONT, does about 75% of its business through SaffronRouge.com, but also takes orders over the phone and operates one store, also in Guelph. The retailer operates all of its software applications–including its store POS system, CRM and back-end accounting systems–as part of the hosted NetCommerce suite from NetSuite Inc.

The integrated system supports analysis of customer activity in each selling channel and the development of e-mail marketing campaigns based on customers’ shopping history across channels, Binder says. “Having an integrated web-based infrastructure is a huge asset,” he says. “It allows us to do things faster and easier and to have our finger on the pulse of what’s going on with our customers.”

Saffron Rouge runs reports in NetCommerce, for example, to produce lists of customers who have purchased particular items within a certain time frame, then send an e-mail designed around those customers’ interests. “We can do this in a few minutes with a few clicks of the mouse,” Binder says.

When Saffron Rouge opened its first store last year, it decided to use the same POS system that supports its web site and telephone orders, Binder says. Store POS clerks enter sales on a web page that connects with the same back-end order management system that supports orders placed on SaffronRouge.com. This lets the retailer maintain a central record of sales, regardless of which channel customers shop, without having to build server-to-server integration, Binder says. He adds that Saffron Rouge will continue to use NetCommerce as a POS system if it expands its number of stores.

Although some retailers avoid placing in-store POS data in a web application for security reasons, Binder says he believes his store’s sales data are more secure on the web than if it were kept on a store-based server. “If we keep local information on customers in a store computer, the store is 100 times more susceptible to theft,” he says. “If someone walks off with our store computer, we don’t care, because the customer information is in a bullet-proof data center.” NetSuite maintains its web applications in a data center with Oracle servers. (Although there are no direct ties between NetSuite and Oracle, NetSuite is partly owned by Oracle CEO and co-founder Larry Ellison.)

Because NetCommerce also integrates Saffron Rouge’s accounting system with its order management, the retailer saves time by avoiding additional data entry, Binder says. “The moment someone places an order, we have that order on our back-end accounting system,” he says. “Not having extra data entry is a big time saver.”

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