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Modern technology and enlightened management to support and drive growth

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Studio McGee, founded by the team behind Netflix’s Dream House Makeover series, decided it needed a makeover of its own to sustain its thriving business.

The problem was that the company had a patchwork of legacy systems – Xero for accounting, Stitch Labs for inventory, Shopify for ecommerce, ShipStation for order fulfillment, and countless Excel spreadsheets to try and understand everything – which made it difficult to access. , coordination and analysis of key financial data.

For example, the VP of merchandising had to pull information from Xero, ShipStation, and Shopify to figure out basics like sales volume, shipping costs, and profit margins. That’s a lot of work, and for a company that needed a comprehensive, real-time look at key performance indicators, that was a problem.

“We started by merging applications and systems from different vendors, but as growth exploded, we moved to centralize operations,” said Josh Batchelor, VP of technology for the Salt Lake City company founded in 2014 .

Studio McGee’s growth has been significant; revenue, which is primarily generated by residential and retail redesign advice, has increased 8-fold since 2017, surpassing $80 million last year.

To support and promote hypergrowth, Studio McGee has deployed Oracle NetSuite to manage billing, accounting, inventory and other important operations, pool key business data and continuously update it.

A big factor boosting demand was the work-from-home mandates due to the COVID-19 pandemic. People thought if they had to spend all their time at home, why not spice it up? Market research agency NPD estimates U.S. consumer spending on home facelifts rose 22 percent in 2021 compared to the previous year. Studio McGee’s popularity was then boosted by his starring role on Dream House Makeoverwhich debuted in 2020.

A SUCCESSFUL TRANSITION

Studio McGee leaders, including President Patrick Ord, realized that a successful transition from a startup to a high-growth company requires more than a good eye for product and design.

“We knew we needed something different to support our growth,” Ord says.

It required a integrated business system that would allow Studio McGee to update and standardize its financial processes and provide more robust data analysis and reporting, leading to improved forecasting and financial decision-making.

With NetSuite, Studio McGee’s finance team has more time to spot trends and ask insightful questions, instead of spending much of their workday looking for raw numbers and then manually creating reports.

Studio McGee has several subsidiaries, including the original SM Design interior design company and McGee & Co., the e-commerce company. Checks built into NetSuite help ensure that sales orders, purchase requisitions, and other transactions between different parts of the business are recorded correctly.

Previously, the team entered carrier bills at the statement level, which left land costs unclear. Now they can enter carrier bills separately to get a clear picture of each supplier’s profit.

In addition, interior designers now get an easy-to-use, App Store-like e-commerce experience for purchasing products and viewing their invoices and account information. Meanwhile, applying these modern processes helps Studio McGee’s finance team recognize trends faster and take appropriate action.

“Studio McGee was well positioned when demand for household goods peaked in 2020, but our disconnected systems made it difficult to understand the actual numbers and take advantage of opportunities,” Batchelor said. “NetSuite connects data from all our operations, automates our reporting and allows us to manage our entire business from one system, ultimately enabling us to make faster and more informed decisions.”

Amid ongoing supply chain disruptions related to the global pandemic, for example, inventory management The capabilities in NetSuite help Studio McGee anticipate potential product shortages so that it can work with suppliers to address them and communicate looming issues to buyers. To mitigate the impact of potential shipping delays, Studio McGee began stocking a core selection of popular furniture, rugs and accessories, which can be found on its website »Ready for shipmentsection. As the name suggests, there is no waiting period for these items.

The improvements will keep coming. Studio McGee is adding a new 325,000-square-foot fulfillment center, moving from a third-party warehouse. The facility will include “pick and pack” robots that integrate with NetSuite to accelerate order distribution.

Studio McGee also looking at expansion outside the US NetSuite Global Business Management– which supports 27 languages ​​and 190 currencies – will support that move.

THE HUMAN TOUCH

The NetSuite support team continues to evaluate how Studio McGee’s finance team works and “thinks about how we can make our tasks more efficient,” Batchelor said.

While he is optimistic about NetSuite’s ability to support growth, he is also realistic that technology alone is not a panacea. The human touch and clear communication are essential, especially when problems arise.

As consumers continue to worry about supply chain delays and rising prices, Studio McGee will continue to improve its technology and strategy to minimize the downsides, Batchelor said. And it will continue to communicate with customers about the reasons for delays and price changes. “Transparency is one of the most important things customers want,” he says.

The big question for Studio McGee, and retailers in general, is how to stay profitable with compressed margins. “We do everything we can to find that happy place where our customers don’t have to bear all the higher costs, but at the same time we don’t sell things below cost,” Batchelor says.

A combination of modern technology and well thought-out management will increase the chance of success in that area.

While Netflix’s Dream House Makeover series to Studio McGee’s visibility and social media following, NetSuite will help the company drive greater profitability. Ultimately, this is about helping Studio McGee move on to the next chapter, helping them reach new homes and find more people who share the mission.

“Today, Studio McGee continues to design homes across the country through our company,” Ord says. “Whatever the next opportunity or trend, we have the right team and the right technology. And if you know that, growth becomes a lot easier.”

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