{"id":12146,"date":"2020-04-21T01:28:26","date_gmt":"2020-04-21T05:28:26","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/natura-will-ai-enable-the-company-to-go-global\/"},"modified":"2020-04-21T01:30:53","modified_gmt":"2020-04-21T05:30:53","slug":"natura-will-ai-enable-the-company-to-go-global","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/natura-will-ai-enable-the-company-to-go-global\/","title":{"rendered":"Natura: Will AI Enable the Company to Go Global?"},"content":{"rendered":"

A Brazilian Multinational known by sustainability and innovation<\/strong><\/p>\n

Founded in 1969, Natura is a Brazilian multinational company in the cosmetics and personal care segment, leader in direct sales. In early 2020, with the acquisition of Avon Products, and previous acquisition of the British Body Shop and the Australian Aesop, Natura & Co became the world\u2019s fourth-largest pure-play beauty company \u00a0just behind L\u2019Oreal, Estee Lauder and Shiseido.<\/p>\n

Natura has always characterized itself by high ethical and environmental standards (being one of the largest B-Corp certified in the world) and its innovation in products and technology.<\/p>\n

Since 2018, the company partnered with IBM to deploy Artificial Intelligence (IBM Watson) in many aspects of the business, but the main focus has been on improving its relationship with the community of consultants and representatives that are in the heart of the direct sales model.<\/p>\n

The digitalization of the direct sales model<\/strong><\/p>\n

\u00a0<\/strong>The Direct sales<\/strong> is a distribution and marketing approach in which products and services are sold via a network of independent distributors or representatives. During its expansion in Latin America Natura developed also a multi-level direct sales model, encouraging salespeople to recruit and train new distributors.\u00a0The model has clear advantages over the traditional retailer model of owning stores, as consultants are independent entrepreneurs, that own the inventory and manage the relationship with customers, providing a broad capillarity that physical stores cannot offer.<\/p>\n

With customer increasingly using online channels, however, the very model of direct sales has been questioned in the past years, but Natura has been successful in leveraging the model to the digital space.\u00a0After the acquisition of Avon in 2020, the company has more the 6 million consultants around the globe, reaching more than 100 million customers on a daily basis.<\/p>\n

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\"Direct<\/a><\/p>\n

Roberto Marques the CEO of Natura & Co. is confident in a movement that he calls \u201cThe renaissance of direct sales”, where consultants and representatives move from a door-to-door relationship to an online presence, using different platforms to connect with customers as,\u00a0 in his own words, the company has \u201c6.5 million influencers that are improving our brand every day\u201d.<\/p>\n

Technology has been key to enable Natura’s expansion through direct sales in the internet era,\u00a0 including the utilization of Artificial Intelligence. Will AI help the company to export the same model to other countries and cultures?<\/p>\n

AI solution to improve relationships<\/strong><\/p>\n

Natura\u2019s flagship AI component has a name, she is called Nat. The virtual assistant that was created in 2017 to answer customers questions about gifts, evolved to solve more sophisticated questions from consultants, negotiate debts and payments and, with a strong market campaign that humanized the assistant, she became the face of the company, Nat has a twitter account and is one the main character in the Brazilian AI scenario.<\/p>\n

But the application of AI and analytics goes beyond customers and consultant relationship, the company is using machine learning to select the best areas to hire new consultants and to predict customer repurchase. The implementation of sophisticated algorithms is embedded in the online platform used by consultants daily. The transition to digital platform in Brazil and Latin America has been completed with more than 2 million consultants using the online ecosystem, increasing productivity of around 7% and increasing customer satisfaction.<\/p>\n

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Value creation and challenges<\/strong><\/p>\n

The company is currently finishing the merger with Avon and even though the recipe of direct sales worked for Brazil and\u00a0 for the expansion to Latin America, going global is a different challenge and technology can be a game changer, some value provide by technology employed by Natura include:<\/p>\n