ACCELERATING INNOVATION
within premium SKINCARE
P R O J E C T PA R T N E R S
SECURING
double-digit GROWTH through supplyTRANSFORMATION chain The fastest growing beauty and personal care brand in North America in 2017 , Rodan + Fields remains committed to innovating within the premium skincare market
S
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kincare has become big business.
anti-aging, dry, sensitive, or oily
Looking and feeling good, both on
skin, Dr. Katie Rodan and Dr.
the inside and out has become a
Kathy Fields founded Rodan +
significant market and led companies to vie
Fields to support the growing
against one another to not only attract new
gap for dermatological products
customers, but also retain a solid customer
within the adult skincare market.
base in the process. In North America, the
With over 200,000 independent
premium skincare market is set to reach
consultants across the US, Can-
$9.9bn by 2021, with the US accounting for
ada and Australia, Rodan +
15% of global premium skincare sales alone.
Fields has gained over 2mn cus-
However, whilst the majority of adult skin-
tomers, and is projected to
care products focus on areas such as
continue to drive double-digital
thenext five years.
Disrupting traditional business models
“This has been a great challenge
Originally selling the business to Estee
for us,” explains Bryan Wayda,
Lauder in 2003, the founders bought back
Chief Supply and Service Officer
the business upon witnessing a number of
at Rodan + Fields.
areas converging together which provided
“When we’re growing at an aver-
a unique opportunity to further disrupt the
age of 60% or more over the
beauty market. The emergence of social
last 10 years, we have worked
media in the mid-2000s led companies to
closely with our supply base
look at transforming traditional business
to address this in a comprehen-
models and address the ongoing chal-
sive way.”
lenges within brick and mortar retail stores.
growth across its operations for
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w w w. r o d a n a n d f i e l d s . c o m
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Diane Dietz, CEO
“We are continually looking at how to get to the market faster. We have relocated our distribution point from Dallas to Ohio to put us closer to our center of gravity for customers” — Bryan Wayda, Chief Supply Chain Service Officer at Rodan + Fields “The founders saw an opportunity to look at the direct selling model in a very disruptive way, which broke some of the rules of traditional direct selling and created how we operate today with our consumer connected commerce model,” says Wayda. “In a traditional direct selling model, the company would sell to a distributor, and the distributor would collect products, sell to
Break the Cycle of Acne | UNBLEMISH Regimen | Rodan + Fields
customers, collect the money and do the administrative work. “Our model flipped it upside down, where we said, ‘why not let us do a direct to consumer shipment, order management and payment process’. This allows consultants to do what they do best, which is connect to their networks, identify new customers and provide a personalised customer experience by helping them find the right skincare products and grow their business.” w w w. r o d a n a n d f i e l d s . c o m
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Product innovation By launching a multitude of regimen-based products, Rodan + Fields continues to focus on four key areas: lines and wrinkles, brown spots and discolouration, acne and sensitive
‘The fastest growing beauty and personal care brand in North America in 2017’
skin. However, the so-called ‘Amazon effect’ has significantly impacted its supply chain capabilities and created ever-growing consumer expectations. “We are continually looking at how to get to the market faster. We have relocated our distribution point from Dallas to Ohio to put us closer to our center of gravity for customers,” adds Wayda. “Everybody expects everything faster than
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they ever did before, and so we’ve made a strategic move to put a warehouse in the most strategic location to get products out faster.” Responsible for Rodan + Fields’ end to end supply chain operations, dealing directly with consultants and customers, as well as the product management for new products, Wayda has streamlined the commercialisation and industrialisation of existing products whilst bringing new products to life. “Our plan was to add one new product every couple of years in the first several years, so that we grew organically and both our consultant base, as well as our internal team, gained a good understanding of our core
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products. In the last couple of years, how-
Nonetheless, to enable further
ever, we’ve accelerated this.
growth, it remains imperative
“Our products are fairly technical and highly
for the supply chain to work
effective with the types of ingredients and
with those who can support its
the formulas used. It’s been a change for our
ambitions to further scale.
organisation to introduce new products
“Many of our suppliers were
quickly, bring them to market and commer-
great suppliers when we were
cialise them in a strong way. It’s been part of
a $100mn business. They fit us
the culture shift of how we operate the busi-
really well because they had
ness.”
flexible batch sizes. In many cases, they offered opportuni-
Supplier drive
ties for us to do things that
Partnering with AT Kearney across its con-
were unique as a small player,
tract manufacturer rationalisation, Rodan +
but as we scaled, their fit
Fields has sought to follow a typical strategic
became better suited for play-
sourcing process; starting from a request for
ers who looked like what we
information (RFI), leading the way to award-
used to look like, so we had to
ing the business and transitioning for
make some tough decisions,”
technical transfer.
notes Wayda.
‘In North America, the premium skincare market is set to reach $9.9bn by 2021, with the US accounting for 15% of global premium skincare sales’ Mircro-Dermabrasion Paste - Jar w w w. r o d a n a n d f i e l d s . c o m
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“Through a seven-step process, we
use of technology has strongly
made some decisions to partner
underpinned Rodan + Fields’ sup-
tighter with some players because
ply chain operations. Upgrading its
they had scaled their business with
outdated enterprise resource plan-
us. It was a venture within contract
ning (ERP) system to SAP, the
manufacturing to find the right part-
company has also sought to partner
nerships to produce our product
with a number of new players to
and co-innovate with us for the
provide further visibility, lower costs
future.”
and guarantee high quality outcomes.
Exceptional technologies
By partnering with DHL, Rodan +
Throughout its transformation, the
Fields has not only overhauled its
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contract manufacturing operations,
Fields to gain further expertise,
but also its distribution capabilities.
enhance its order management
“Our partners need to manage high
platform, add value and reduce the
volume of orders alongside our
risk for the business in developing a
ongoing growth. Our partner is DHL
system in house.
in the US, and we’ve also got part-
Additionally, by building effective
ners in Canada and Australia as
relationships with contact center
we’ve opened up those markets,”
providers, the company has
Wayda says.
enhanced its outsourcing pro-
Implementing a state-of-the-art
cesses and improved its customer
warehouse management system
and consultant support.
(WMS) by DHL has allowed Rodan +
“We’ve also partnered with a new
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“Our partners need to manage high volume of orders alongside our ongoing growth. Our partner is DHL in the US, and we’ve also got partners in Canada and Australia as we’ve opened up those markets” — Bryan Wayda, Chief Supply Chain Service Officer at Rodan + Fields
contact center outsource provider in the last year to make sure that we have someone who can scale with us and offer us global opportunities as we continue to grow, leveraging the knowledge and the input that we receive across multiple geographies,” adds Wayda.
Entrepreneurial spirit As Rodan + Fields continues to expand, the business will continue to explore further global opportunities in markets which fit its strategic skincare portfolio. “The products are fantastic and remain core to our founder’s mission. Customers and consumers love our products, they’re highly
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efficacious and serve the purpose they’re intended to serve,” acknowledges Wayda. “The future is even more exciting when we think about the opportunity to transform the business to fit a truly global market place. A global supply chain will be a really unique opportunity for our business to grow,” he concludes. “It changes the dynamics of how we look at things when we think of scaling ourselves to be a business that can be double the size or even more than what we are today. “One of our big opportunities to continue to transform the supply chain, which will help the business evolve in the next several years.”
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HEADQUARTERS 60 Spear Street, Suite 600 San Francisco, CA 94105 T 415.273.8000 www.rodanandfields.com