Natura charts digital route to customer-centricity
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Natura charts digital route to customer-centricity

Angelica Mari — November 2016
Agenor Leão, CIO at Brazilian cosmetics company Natura, reveals how a focus on data analytics and mobile apps has put the customer at the heart of its business.

Brazilian cosmetics company Natura is reaping the benefits of a four-year digital transformation program, powered by an innovative online network, mobile applications and data analytics, that has seen the overhaul of its traditional sales model and the deepening of the relationship with both its independent sales force and its millions of consumers.

The 47-year-old company, which had revenues to R$7.9 billion ($2.3bn) in 2015, has transcended a classic sales model based on door-to-door calls by its agents and supported by the printing of 3.5 million catalogs each sales cycle. Today, a network of 1.9 million sales consultants, spread across five South American countries, as well as Mexico and France, engage with local customers and take orders via their own online franchises and mobile applications.

“Agenor

The change program got underway in 2012 with the appointment of CIO and VP of digital technology Agenor Leão and now fewer than 1% of Natura’s orders are placed via telephone or mail order.

Key to that success has been to capitalize on the community element of cosmetics sales, Leão says. “We see Natura as a social network. Direct sales are all about product recommendations and reputation driving decisions,” he says. “Our vision was to get Natura into the online world, and to bring our consultants into that environment with new tools and sales channels.”
Creating a digital platform  

The first milestone in the process was the creation of Rede Natura (Natura Network), an online sales platform where sales consultants can craft their own online stores, with payment and logistics fulfilled by the company.

According to Leão, Rede Natura was born as a disruptive start-up within the business. But now almost 70,000 consultants in Brazil operate their own online shops, engaging more than a million customers, with the e-commerce network now being extended to Chile.

In building Rede Natura, the company also recognized the value of robust data management, establishing a master data management (MDM) platform to underpin an analytics engine. This in turn provides visibility into sales and marketing performance and trends, influencing the online relationship between consumers and sales consultants.

The firm now knows at a granular level which products consultants sell the most: for example, if an agent sells skincare products but struggles to shift make-up, Natura can approach that representative with promotional campaigns specifically designed to boost interest in make-up products.

“Natura

Leão highlights how far its thinking has moved from introspective business intelligence to customer-centric analytics. “We were previously only looking at our business from an industry perspective,” he says. “In the past, I would send [managers] an Excel spreadsheet and some emails with data. Today they have a Tableau application that enables them to analyze the performance in their area and also gives insights such as which customers they could call if they need to wrap up their sales cycle that day.”

Predictive analytics functionality on the Rede Natura platform back-end also alerts consultants and customers to additional purchasing opportunities. Such functionality has “allowed us to avoid that cold and impersonal online feel by offering a more relevant and personal experience,” says Leão.
Mobile opportunities

The benefits of a mobile applications strategy became obvious to Natura when the company moved away from its print catalog model. In 2015 the company launched VocêConect@, a mobile platform that gives consultants connectivity and access to applications, payment methods and training modules through their tablet or mobile phone.

But to fulfil its mobile ambitions Natura had to address the cost factors that often deterred many of its independent agents from using mobile broadband. To address that, the company partnered with a Brazil mobile operator to offer prepaid rates that are much lower than market averages, enabling representatives to access social networks, make unlimited calls and, most importantly, access Natura's applications without paying for extra mobile data.

“Natura Strategy/Mobile/Embedded/Natura-Raw-materials.jpg

The delivery of a mobile payment mechanism was also key to solving transaction limitations that meant consultants could only accept cash. Natura worked with a local payment provider to create a mobile point of sale terminal that would enable card transactions. Fourteen per cent of all orders are now taken via mobile applications. The company also offers training through the mobile platform, allowing users to download educational modules that they can watch on the go. According to Leão, about 30% of the online training is currently accessed through mobile devices.

The portfolio of applications created to enable sales consultants to operate their business through their phones has proved successful: around 220,000 representatives now interact with Natura through mobile devices. The success with mobile extends to Natura’s engagement with customers as well. The company launched a retail app in late 2015 which enables direct purchases as well as features such as the ability to set up subscriptions for frequently purchased products, and an Uber-like resource to enable consumers to find their nearest representative.

About 35% of all consumers keep the Natura retail app on their phones after three months of use, compared to an industry average of 18%, according to the CIO.

“If you don't focus your whole function on the business, IT starts to become a barrier to evolution.”

Mobility has introduced a mindset of constant experimentation within Natura and has brought previously siloed departments together, says Leão. A digital products and services development group composed of IT and other parts of the business meets each week to discuss possibilities of adding new features to existing applications and services as well as new launches – such as the recent introduction of order-placement facility for representatives through messaging tool WhatsApp.

This cross-departmental group is just the start of Leão’s vision for how IT interacts with the business. His aim: “I often say that we have a goal of extinguishing the IT department. Companies born in the digital world often don't have an IT function, they have multidisciplinary groups instead — and we are working to make that happen here. If you don’t focus your whole function on the business, IT starts to become a barrier to evolution."

Underscoring his focus on the wider business agenda, he continues: “We are here to sell cosmetics rather than fix server boxes. We are here to deliver the best user experience. That’s why we are constantly monitoring what is happening in the system, primarily in terms of the user experience.”

“Natura

That is inseparably linked to the core challenge of ensuring the stability, reliability and security of an IT infrastructure that each day supports the processing of 50,000 orders and shipment of more than two million cosmetic items from its warehouses to clients in Brazil alone.

Over the coming year, Leão expects the model of collaboration and working within networks to be fully embraced across the company — “not only as an IT or sales initiative, but really to get Natura to effectively live that process of technology co-building and evolution.”

First published November 2016
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