In a new tech initiative, U.K.-based Lush is rolling out an open-source point-of-sale system to help the company control more of its business.
Currently set up in 110 Lush stores across Germany, the U.K. and Japan, the POS software has slowly been rolling out throughout 2019. Lush also debuted its own POS hardware in November that is currently being tested in two U.K. stores. Overall, bringing all POS tools in-house will improve the business, according to Adam Goswell, Lush’s technology research and development manager, because the former software was hard to keep up-to-date with the speed of Lush’s product launches. It will also help reduce long-term costs associated with POS implementation and management and improve the customer experience online and in-store, thanks to increased personalization. The company also said it wanted to address the ethical impact that POS software and hardware have on both the environment and human labor by using renewable energy sources to power transactions and working with manufacturers who abide by the same ethical standards. Lush opted to make its software open-source (the software code is located on GitHub), meaning that any company can utilize it and also help improve it.
The new POS system offers functionalities of previous systems, like email receipts, but also new features like buying online and picking up in-store or ordering online and paying in-store. It also allows the company a clear view of sales in each shop and live sales information, and manufacturing can receive up-to-date stock management reports. More features and functionality will become available over time. For its hardware, Lush wanted to also focus on durability and being able to take apart and replace parts easily.
“We’re thinking about our POS now as a singular platform, so it extends [between our] e-commerce and retail,” said Goswell. “In our business, there are different e-commerce and retail solutions being used around the world.”
Worldwide, Lush has over 950 shops with over 3,800 cash registers. For a company of its size and volume of transactions, a single POS system can cost between $2,500 and $6,400, according to multiple sources, and Lush maintains an average of four in each store. Additionally, POS systems have ongoing costs associated with software subscriptions, payment processing fees and routine maintenance costs that further drive up the cost. A company spokesperson was not able to pinpoint how much it is saving through its own system, because the overall costs “are not clean-cut,” but they did say that Lush has done over $221 million in sales across 12.5 million transactions using its own software.
Another benefit beyond cost-saving is being able to increase the speed of checkout because the system will be able to more easily handle the volume of new launches online and individual brick-and-mortar exclusives. Lush’s current retail strategy includes individual store exclusives, such as stocking products prepared on-demand at one location in Paris. And online, the volume of launches year-round (the brand has 70 product launches for this holiday season alone) combined with peak traffic times was making it hard to keep the system updated and slowing down the checkout process.
And because Lush is not a tech company, being able to have open-source software code means that it can be improved without having to invest in software engineers, said Goswell.
Neil Saunders, managing director of retail at analyst firm GlobalData, said that developing its own system will prove useful for Lush when it comes to gathering and using customer data. Lush said it is only using customer data for processing and invoicing purchases rather than trying to commercialize it, and through its own system can better protect that data. Other retailers have experienced negative backlash for when a POS system is hacked and customer data that was stored, is stolen.
“Developing your own system can be useful because challenges exist with gathering and mining data in an appropriate way, when you rely on systems that you’ve cobbled together,” he said. “A lot of retailers are more conscious now of data rights, data privacy and data access now, but that hasn’t necessarily translated into taking something [like POS] in-house.”