Melbourne-based retailer Aēsop has embarked on a rapid global expansion plan, adding four new markets and 50 new stores a year.
“The number of countries we operate in is disproportionate to the size of the company that we are,” says Troy Smith, global head of information technology at Aēsop.
When Smith arrived at Aēsop six years ago, the luxury cosmetics brand had roughly 50 stores in six countries with 400 employees. Today it’s in 22 countries, with more than 350 stores and is approaching 2,000 staff. It’s also recorded over 30 per cent year-on-year growth for six years in a row, Smith told media at SuiteWorld in Las Vegas today.
This year Aēsop plans to launch in Belgium and UAE. Matthew Nott, group financial controller, said when deciding on entering a new market the brand focuses on cities and considers the market opportunity and the business’s capability to execute there.
“There are some markets that we haven’t entered yet because we know they are very large and complex and we are just not ready to do so,” Nott said.
The big one being China, which throws up all kinds of obstacles for foreign companies. For cosmetics companies like Aēsop the requirement to test its products on animals before being sold in Chinese stores is enough to derail any expansion plans.
A focus on stores
The company has grown without any investment in traditional advertising.
Founded in Melbourne in 1987, Aēsop has its own retail stores, ecommerce, wholesale accounts and stocks products in hotels, restaurants and airlines.
“That’s effectively our advertising, we don’t do any traditional advertising at all,” Smith said.
Aesop’s stores, with their strong focus on design and customer experience, account for the lions share of sales. Online accounts for about 5 per cent of the company’s sales.
Each of Aesop’s stores have a different look and feel, created by architects who design the store to reflect each the neighbourhood .
“From a store roll out perspective it makes things quite difficult but we really think that sets us apart.”
“We want technology to be almost invisible in our stores because we want the focus to be on the product and customers,” Smith said. Instead the company has made big investments in technology to streamline its backend operational systems.
Aēsop’s rapid global expansion has been supported by its NetSuite implementation, Smith said. The key benefit of the cloud-based system has been the speed in which it is able to be deployed in new markets.
“We don’t have to worry about infrastructure, security, compliance issues anymore. We know that NetSuite will handle that for us so we can focus on rolling the system out to our new markets quite quickly,” he said.
In the past Aēsop didn’t have an ERP system or a single global view of operations in each country. In response, Aēsop deployed NetSuite to consolidate several disparate systems, from financials to global supply chain management. All told the business runs NetSuite in 22 countries, six languages and 21 currencies.
The other win, according to Smith, has been the system’s ability to provide a global view of the company’s operations, including sales, financials, supply planning, inventory management, order management and manufacturing.