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Simple change shaves $114k off Adore Beauty’s costs

Adam Zuchetti
Adam Zuchetti
24 July 2019 4 minute readShare

Online beauty supplies retailer Adore Beauty has provided insights into its move to become a more sustainable business, including one recent change that is on track to save it $114,000 each year.

Speaking at the Online Retailer conference in Sydney on Wednesday, the retailer’s general manager, Sarah Mullen, revealed its #WarOnWaste strategy was born at least in part by customers wanting more environmentally friendly and sustainable shipments, which reflected a similar desire among its “fairly young” workforce.

But in implementing a range of changes, alternative packaging options and efficiencies, the business is now reaping projected costs savings in the hundreds of thousands of dollars each year.

Package size

The bulk of the savings have been achieved by changing the way products are packaged and shipped to customers.

Ms Mullen said that staff played around with their 20 most popular items to see if they could be put into a smaller box, and discovered that it was indeed possible.

“What we could see was that the footprint would need to be the same, but there was absolutely wastage in the height,” she said.

“What we could visually see was there was probably three to four centimetres wastage in the height.”

The business moved to stock a box that was smaller than the ones it already had, and also turned to technology providers in order to automatically recommend the optimal size box for every individual order.

The changes were rolled out in March this year.

“And wow, were the results immediate,” Ms Mullen exclaimed.

“In the first week, what was 80 per cent of our orders in our then smallest box was... pretty much split in half: 40 per cent of our orders transitioned to the new, smallest box. Each smallest box saved us 18 cents.

“And if we think about the box split currently, and we predict out for the next financial year, we predict that’s a saving of about $114,000.”

Ms Mullen added that each of the new smaller boxes also saves “50 grams of cardboard” — equating to an estimated saving of 26,093 kilos of cardboard, contributing to additional cost savings by way of lower shipping costs.

Promotional goodie bags

“We activate a goodie bag promotion every four to six weeks,” Ms Mullen explained.

Traditionally, this bag was plastic and included as many as eight sample-size products, “and there’s about five to 10,000 of those offered to our customers every four to six weeks”.

A replacement to the plastic bag has been a switch to branded calico bags which, while also being more eco-friendly, actually worked out to be much cheaper and also more efficient to pack.

The new calico bags work out at 37 US cents each, almost half of the 70 US cents that the plastic bags had cost.

But the bags have also reduced the labour-intensive packing process, Ms Mullen said, as an estimated 200 to 220 calico bags can be packed each hour, compared to an estimated 80 to 100 per hour for the plastic variety.

“So, in the next financial year, just by that simple change, we predict to save around $40,000,” she said.

“That might not seem like much, but that goes straight to the bottom line.”

Gift cards

Reforming the gift card process was largely about improving efficiency, Ms Mullen said, but eliminating plastic gift cards also had both a sustainability and a cost benefit.

“We were printing north of about 22,000 of those just in a year,” she said.

“We were literally picking and packing every one of those items, which is incredibly inefficient; and they’re plastic, so when the customer receives them, they use them or they don’t use them, and they throw them in the bin.”

A technology solution — sending gift cards by email rather than a physical card — has eliminated plastic entirely from this part of the business, and simultaneously delivered the business efficiencies by cutting the need to physically pack 22,000 items.

Other sustainability measures

Other sustainability measures have also been implemented by the business which, while not necessarily delivering cost savings, are reinforcing its public commitment to be more sustainable.

1. Void fill

“This was one of the earliest changes that we made... and this absolutely came off the back of customer feedback,” Ms Mullen explained.

She said that the business thought it was “doing the right thing” by reusing the beads it received in shipments from suppliers when sending goods directly to the customer.

“On a daily basis, we were having our customers ask us ‘why are you filling your orders with polystyrene beads?’” she said, admitting that the re-usage had not been communicated to customers, but also that customers didn’t care.

“They wanted us to change that practice. So we did.”

Adore Beauty transitioned to using recycled recyclable paper instead, and Ms Mullen said the result was “seamless” for the business.

2. Invoices

Ms Mullen explained that, like many businesses delivering directly to their customer, Adore Beauty used to print customer invoices, manually fold them and include them in a customer package.

“We were using about 1,260 packets of paper — each packet was 500 sheets of paper,” she said.

Going paperless in the process has involved embracing RF guns to pick, scan and pack goods, with the data then automatically filed and an electronic invoice sent to the customer.

3. Keep cups

In addition to improving the sustainability on the customer-facing side, Adore Beauty looked for simple ways to demonstrate this commitment within its own workspace.

“As a business, we were contributing last year about 5,200 cups to the single-[use] cup crisis,” Ms Mullen said.

To address this, Adore Beauty opted to provide a keep cup of their choice to every new and existing member of staff.

“There’s an added benefit to that, because our coffee shop up the road gives us a 50 cent discount if you bring your keep cup,” she said.

Sustainability challenges

Ms Mullen said that taking a more environmentally conscious approach is not something that can happen overnight, and it has come with some challenges along the way.

One of these comes down to consumer expectations, including that for luxury items, more packaging is often seen as the norm.

Additionally, once the ball starts rolling on sustainable initiatives, customers and staff come to expect further improvements.

She said that future plans include slashing the use of soft plastics and eliminating bubble wrap from its packaging.

But the benefits — financial, branding/PR and environmental — have easily outweighed the challenges to implement change.

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Simple change shaves $114k off Adore Beauty’s costs
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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