Virgin Cosmetics

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Virgin Cosmetics

Fujitsu was initially awarded a five year contract to manage Virgin Cosmetics' entire IT infrastructure.

Customer's Challenge

Since its launch in 1997, The Virgin Cosmetics Company has grown to be one of the UK's leading cosmetic companies, along with Chanel, Dior and Revlon, and the fastest growing and second largest direct selling business.

However, in order to establish its brand as a provider of the best in service, quality and value, Virgin Cosmetics needed an experienced IT partner that could deliver the technical services and operational flexibility necessary to support the new company's evolving business needs.

Ian Chapman, IT Director, Virgin Cosmetics, explains, “We looked at three or four managed service providers, but chose to work with Fujitsu because it was prepared to work on a flexible commercial arrangement, which was essential for us as a start-up company going through a period of unknowns. Fujitsu's size also meant that we could draw on any specialist skills that were needed.”

Fujitsu Solution

Fujitsu was initially awarded a five year contract to manage Virgin Cosmetics' entire IT infrastructure. This covered the service management of the company's AS400 corporate server and Wide Area Network (WAN), the build and installation of its store systems, using Fujitsu's ISS300 EPoS software and TeamPoS 2000 hardware, the 'break-fix' maintenance of the office, stores and warehouse hardware and 1st line retail helpdesk support.

“Having Fujitsu manage our infrastructure has allowed us to concentrate on developing our core business,” says Ian Chapman, “and it's worked really well as an outsourcing relationship. It's not rocket science, lots of people run AS400s, but the services provided by Fujitsu are all core areas that need to be done well if you are going to have a stable infrastructure and Fujitsu has done just that. As a result, my team is free to focus on our future requirements and new software developments - the value-adding, business specific elements that make us different and deliver a competitive advantage.”

During the contract, Virgin Cosmetics underwent a fairly radical change in business strategy. Having launched a direct selling arm of the business, which was intended to be a secondary sales channel to the company's retail operations, Virgin Cosmetics realised that the rapid growth in direct selling offered huge revenue potential compared to the tough retail environment.

Ian Chapman continues, “Two years into our business plan we made a complete change in strategy and put a lot of our resources into the 'Party Plan' business, using independent sales consultants to sell our products from home. This was a great test of the strength of our relationship with Fujitsu, but Fujitsu didn't hesitate in allowing us to re-gear the services that were needed to back-up the direct selling operation.”

Following a re-tendering process, Fujitsu was subsequently awarded a three year extension to the managed service contract, which included replacing Virgin Cosmetic's aging and costly leased line WAN by utilising Fujitsu's existing European network, which also provided added resilience. Shortly afterwards, Fujitsu was also asked to design, build, host and manage an Intranet system that would enable Virgin Cosmetics' 10,000 sales consultants to access product and marketing information, check stock availability and place customer orders online, rather than through a Call Centre.

“While we based the Intranet system around one of the dominant direct selling applications, from Quinstreet, we also wanted to mitigate the project risk by using Fujitsu to develop and support the Intranet infrastructure, including the product catalogue, because of its expertise in managing and hosting IT environments, the Internet and always-on service provision,” comments Ian Chapman. “Now our sales consultants have 24/7/365 access to the communication and information tools needed to help develop their business - and ours. It has also enabled us to become much more efficient in the way orders are managed and make substantial savings on our Call Centre operations, without reducing the level of service. It's a great business success story.”

Benefits to our Customer

Working with Fujitsu has enabled Virgin Cosmetics to:

Increase efficiency - two-thirds of orders are placed online, allowing the Call Centre to be insourced and hours reduced by over 60%, saving £1.1 million a year

Benefits to our Customer

Working with Fujitsu has enabled Virgin Cosmetics to:

• Increase efficiency - two-thirds of orders are placed online, allowing the Call Centre to be insourced and hours reduced by over 60%, saving £1.1 million a year.
• Develop a new sales channel - able to recruit and retain high quality consultants, increasing the direct sales force by 500% with £50 million revenue in 3 years.
• Improve productivity - with rapid access to accurate product and sales information, greater system reliability and availability and speedy problem resolution.
• Focus on the core business - staff can now concentrate on future requirements and value-adding activities.
• Save on specialist resources - with rapid access to Fujitsu's comprehensive range of business and technical expertise on an 'as needs' basis.
• Budget accurately - the managed service ensures costs are entirely visible and predictable over the contract life.
• Simplify supplier management - using Fujitsu as a single point of contact for all service management issues reduces management time and overhead costs.

“From a standing start in 1997, Virgin Cosmetics is now turning over £64.3 million and 80% of that is from direct selling. Fujitsu has been a key contributor to our rapid success, because the reliability and quality of its service has given us the confidence to focus our efforts on growing the business, without having to worry about the systems needed to make that happen,” says John Jackson, Chairman, Virgin Cosmetics.

Our Approach

In developing the Intranet system, a great deal of effort was put into ensuring close integration between all parts of the site, together with a consistent user interface to make it easy for sales consultants to navigate around the site. In particular, the online product catalogue is very tightly integrated with the back-end order processing system and direct sales application. This ensures that key product information is entered and maintained in just one place, guaranteeing accuracy of data and reducing the administration workload.

Another key feature of the design was to duplicate all major components of the system to provide the resilience and scalability needed to provide the level of service required to support the consultants.

“When you look at the demographic of our consultants,” explains Ian Chapman, “who mostly work from home and are not technically minded, the Intranet system had to be simple and straightforward. So, the fact that two out of three of our orders are now placed online is amazing and a testament to Fujitsu's design skills and management capability in ensuring that the service is always there. Our sales consultants have the convenience, flexibility and content to be able to do thing when they want and it is our ability to provide this level of back-up that has made Virgin Cosmetics a leader in direct selling.”

Our Expertise

Fujitsu has over 30 years experience in supporting multi channel retailing, managing in-store systems, integrating supply chains and optimising IT infrastructures.

Ian Chapman says, “Our customer satisfaction rating with Fujitsu is currently 9 out of 10 and that's purely down to eight year of working together and doing things better each year. Now we're looking forward to developing a much more open relationship with Fujitsu. We would like it to take a more active role in the value-adding slice of our IT development and bring its cross-vertical, global expertise to bear, so that we remain at the cutting edge of the direct selling industry through innovation and excellence.”