“The pandemic was a little bit of a perfect storm for us, if we’re being optimistic,” says Sonoma Taylor, VP Solution Delivery at Sally Beauty Holdings, Inc., a global distributor and specialty retailer of professional beauty products. “We already had a big focus on professional-grade, DIY brands, and now the consumer had more time to use them and more opportunity to experiment. I mean, since you’re not going to the office anyway, you might as well dye your hair purple.”

Sally Beauty Holdings operates through two business enterprises: Sally Beauty Supply LLC to serve consumers, and Beauty Systems Group LLC (BSG), branded as Cosmo Prof, to serve salon professionals. Not surprisingly, Sally Beauty Supply experienced a huge spike in online demand at the pandemic’s onset. At the same time, government mandates and company concern for employee safety slowed operations at the retailer’s three US distribution centers.

“The consumer really started wanting our products, but we weren’t always able to ship from the warehouses,” comments Taylor.

Fortunately, the previous year Sally Beauty Holdings had embarked on a digital transformation to improve its omnichannel B2C and B2B customer experiences. The company wanted to drive higher sales and customer satisfaction by simplifying ordering and purchasing processes and offering seamless services to online and in-store customers.

As part of that initiative, Sally Beauty Holdings modernized its order management and fulfillment system with the IBM Sterling® Order Management platform. The solution provides centralized, real-time visibility into and management of inventory, orders and fulfillment. It also helps streamline deployment of ship from store (SFS) and other digital fulfillment options. In addition, IBM offers the industry expertise and knowledge to help guide the company through a digital transformation.

Sally Beauty Holdings collaborated with IBM Business Partner Perficient Inc. to implement the IBM Sterling platform on IBM Cloud®, which provides the scalability, availability and security-rich features to support diverse business lines and services.

Sally Beauty Holdings’ next steps revealed its resourcefulness and agility. The business couldn’t fulfill orders on a timely basis from its distribution centers, so it found an alternative way.

“We said, ‘We’ve got a lot of inventory sitting in our Sally Beauty stores in the US. Why don’t we just roll out ship from store? This would allow us to extend our product assortment while our suppliers are not fully operational. It would also give our store associates jobs and our customers a chance to come shop us,’” Taylor explains.

Within three weeks, the company enabled 2,700 of its 3,300 US retail stores to function as fulfillment centers. Essentially adding thousands of new shipping nodes to its US network, the company significantly increased customer satisfaction and sales.

Taylor describes the in-store execution of new SFS capabilities, including establishing and training new business rules for order distribution and transportation, as a complicated process. Capitalizing on its IBM Sterling Order Management solution, the team rapidly got the work done.

“It was super stressful, but that’s what the IBM application is built for, to understand where the demand is, where the inventory is and how to best get it to consumers. It is an incredibly strong application that can be flexibly configured to do what we need it to do,” she says.

The team also closely worked with IBM and Perficient during the implementation, including applying agile delivery methods to integrate the application into the company’s point-of-sale system. “I have to give all the credit in the world to the IBM support team and to our Perficient team for working closely with our Sally Beauty teams to deploy a consolidated and comprehensive solution,” Taylor says.

For instance, shortly after going live, the SFS application performance dipped because of the huge transaction volumes. “We use a software-as-a-service (SaaS) delivery model, and outside of this moment we’ve never had any issue as it relates to scalability and performance,” says Taylor. “But when you scale your e-commerce operations like we did, you’re going to have a little bit of a challenge. We immediately collaborated with IBM and Perficient to resize our cloud capabilities, and within hours we were back up and running. We’ve never had a performance issue since.”

Learn how to build smarter supply chains

Fast to enable SFS capabilities, Sally Beauty Holdings attracted new B2C customers during the pandemic’s early months in North America. However, supply chain disruptions had fragmented in-store inventories, so customers often received split order shipments. To improve the brand experience and minimize its shipping costs, the company gradually reduced the number of stores offering a SFS option from 2,700 to 245 stores. The business continues to optimize the network, helping streamline inventory allocation.

In April 2020, as some stores began safely opening back up, Sally Beauty Holdings also quickly piloted and then rolled out curbside pickup and buy online pickup in store (BOPIS) capabilities for most Sally Beauty Supply stores in the US and Canada. This model further reduced order splitting and shipping costs, while helping new customers become more familiar with store locations and product assortments.

More than a year after the pandemic began, the digital transformation at Sally Beauty Holdings continues. In the summer of 2021, the company introduced BOPIS options for cosmoprofbeauty.com. It is also in the process of deploying same-day, two-hour delivery for sallybeauty.com, and same day, three-hour delivery for cosmoprofbeauty.com.

“We remain focused on having inventory in the right place at the right time, so customers have excellent experiences, and we optimize costs,” says Taylor.