October 25, 1999
Culture Change:An Alternative Culture: Reflect.com's Unique Approach
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rocter & Gamble is so eager to encourage cultural change that it's willing to go to great lengths--literally. In September, the company unveiled an E-commerce venture that will be located in Silicon Valley--deliberately physically divorced from company headquarters in Cincinnati--and will be spun off as a standalone entity. The venture, called Reflect.com, is a partnership with Silicon Valley venture-capital firm Institutional Venture Partners, and funded with a $50 million joint investment.Reflect.com's business proposition: delivering beauty-care products, ordered over the Internet, custom-made for each individual consumer. It represents the integration of Procter & Gamble's research into individual variations in beauty and hair care, and the company's grasp of the individual marketing potential of the Internet. "We would like nothing more than products and services to meet individual needs," says Nathan Estruth, marketing director at P&G. "And it's not possible without the Internet."
While Reflect.com execs won't divulge exactly how the built-to-order make-up and hair-care technology will work, it will leverage Procter & Gamble's extensive manufacturing, supply chain, research and development, and marketing capabilities. Estruth says a melding of sourcing from multiple suppliers, together with technology as the delivery tool, will be the key. "We have a patent pending on the entire process, from front end to back end, because we believe it's a proprietary system," he says. "That includes the management of the supply chain as well."
Estruth says there are no plans to create similar sites for Procter & Gamble's other product lines--home-care products, for example. But he doesn't completely rule that out: "Where we take this will depend on the learnings that come out of it."
Mike May, an analyst with Jupiter Communications, says Procter & Gamble may come out sitting pretty with Reflect.com. "The Internet is an ideally suited medium for mass customization, and I have no doubts in Procter & Gamble's ability to deliver mass customization," he says. "It has excellent R&D and excellent technology, and a new brand like this is the only way they can move into health and beauty online."
go on to the next story, "Come Together: The Idea Behind Collaboration Rooms ."
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