Best Practices -- Rare Beauty

Dec. 21, 2004

Reflect.com delivers customized products in lots as small as one with remarkable on-time performance.

At first blush, producing women's cosmetics in lots of one wouldn't seem to be a profitable proposition. But the principle that Land's End Inc. and Nike Inc. are using to customize trousers and sneakers is being employed by San Francisco-based Reflect.com LLC, a September 1999 spinoff of Procter & Gamble Co., to make beauty products individual consumers can buy for an affordable -- albeit premium -- price. The privately held company, in which P&G has a stake, does not report its financials. The virtual door to Reflect.com opened in December 1999, and the company has been in business ever since. Through its online operation, which accounts for most of its business, the company seeks to deliver such items as lipstick, powder, shampoo, hair conditioner and fragrances to a U.S. or Canadian customer's door within 10 days. COO Alex Zelikovsky, a former director of logistics at Amazon.com, claims that on-time performance is 99.6%. Reflect.com wouldn't be in business were it not for the Internet. "You cannot possibly make these products in an inventory model and put them on the shelf for each and every woman to go to the store and buy.. [You'd have] to have a store the size of New Jersey," asserts Zelikovsky. But Reflect.com's business also depends on a couple of other significant developments. One is company-developed and patented "neural network" technology. Basically, it gathers data from a customer and tells manufacturing what and how much to make. Zelikovsky puts it this way, "The consultation process drives the creation process." The other notable is an end-to-end mass-customized supply chain that includes a manufacturing facility in Port Jervis, N.Y., which can make a lot of one on each of its production lines. What's more, with "the processes and the systems we have developed, we are capable [of doing] up to 30 product changeovers in a single seven-and-one-half hour shift on a single line," says Zelikovsky. These are "different SKUs, different products that we can formulate and run on a production line," he emphasizes. In contrast, he asserts that two product changes would be too many for other beauty care companies. "I have been able to systematize and create a production process that emulates a mass-production line -- but on a customized basis." Zelikovsky won't discuss the details of these processes or production machinery, saying most of the stuff is patented or proprietary. However, he does confirm that the company has integrated IBM Corp.'s Net.Commerce and Optum Inc.'s Move warehouse management software into its supply-chain management. Why not a completely customized system? Says Zelikovsky, "I don't need to build a brand-new e-commerce capability because there are hundreds of companies today using a successful platform. And from the Optum Move standpoint, these guys have been around for 20 years . . . and their platform is extremely robust and solid. Why should I invest six months of resources to develop a functionality that is pretty straight-forward from the inventory-receive [to] put-away [to] pick-[and]-pack standpoint?" And then there is the bottom-line question: How can Reflect.com produce lots as small as one and make a profit? "The answer is, we can and are doing it," says Zelikovsky. "We are priced in a prestige beauty segment . . . and our price points do allow us the necessary margins to be profitable."

About the Author

John McClenahen | Former Senior Editor, IndustryWeek

John S. McClenahen, is an occasional essayist on the Web site of IndustryWeek, the executive management publication from which he retired in 2006. He began his journalism career as a broadcast journalist at Westinghouse Broadcasting’s KYW in Cleveland, Ohio. In May 1967, he joined Penton Media Inc. in Cleveland and in September 1967 was transferred to Washington, DC, the base from which for nearly 40 years he wrote primarily about national and international economics and politics, and corporate social responsibility.

      McClenahen, a native of Ohio now residing in Maryland, is an award-winning writer and photographer. He is the author of three books of poetry, most recently An Unexpected Poet (2013), and several books of photographs, including Black, White, and Shades of Grey (2014). He also is the author of a children’s book, Henry at His Beach (2014).

      His photograph “Provincetown: Fog Rising 2004” was selected for the Smithsonian Institution’s 2011 juried exhibition Artists at Work and displayed in the S. Dillon Ripley Center at the Smithsonian Institution in Washington, D.C., from June until October 2011. Five of his photographs are in the collection of St. Lawrence University and displayed on campus in Canton, New York.

      John McClenahen’s essay “Incorporating America: Whitman in Context” was designated one of the five best works published in The Journal of Graduate Liberal Studies during the twelve-year editorship of R. Barry Leavis of Rollins College. John McClenahen’s several journalism prizes include the coveted Jesse H. Neal Award. He also is the author of the commemorative poem “Upon 50 Years,” celebrating the fiftieth anniversary of the founding of Wolfson College Cambridge, and appearing in “The Wolfson Review.”

      John McClenahen received a B.A. (English with a minor in government) from St. Lawrence University, an M.A., (English) from Western Reserve University, and a Master of Arts in Liberal Studies from Georgetown University, where he also pursued doctoral studies. At St. Lawrence University, he was elected to academic honor societies in English and government and to Omicron Delta Kappa, the University’s highest undergraduate honor. John McClenahen was a participant in the 32nd Annual Wharton Seminars for Journalists at the Wharton School at the University of Pennsylvania in Philadelphia. During the Easter Term of the 1986 academic year, John McClenahen was the first American to hold a prestigious Press Fellowship at Wolfson College, Cambridge, in the United Kingdom.

      John McClenahen has served on the Editorial Board of Confluence: The Journal of Graduate Liberal Studies and was co-founder and first editor of Liberal Studies at Georgetown. He has been a volunteer researcher on the William Steinway Diary Project at the Smithsonian Institution, Washington, D.C., and has been an assistant professorial lecturer at The George Washington University in Washington, D.C.