Rituals builds a foundation for future expansion with Dynamics 365

Rituals creates body, beauty, and home products with a conscience. Inspired by ancient wisdom and modern wellness, the Netherlands-based company blends natural ingredients and biodegradable formulas with elegant design and innovative packaging. Since its founding in 2000, Rituals has been committed to ethical and sustainable business practices. Its cosmetics, scents, skincare, home accessories, and specialty apparel products—all ethically produced—can be found at one of the company’s 1,200 stores around the world, online channels like rituals.com and its associated mobile app, and through well-known retailers such as Ulta Beauty, QVC, and Saks Fifth Avenue. Customers also enjoy experiencing Rituals products at luxury hotels, major airports, and its flagship physical store, House of Rituals, in the center of historic Amsterdam. With a presence in more than 100 countries, Rituals is a global leader in sustainable and ethical beauty.

“Dynamics 365 is the glue that holds our global, multichannel finance and supply chain operations processes together.”

Jenny de Vries, CFO, Rituals

Connecting systems for growth

Rituals is a rapidly expanding company with a double-digit growth ambition. To facilitate that growth and prevent bottlenecks, an upgrade of the core systems supporting supply chain and financial operations was required. The multichannel retailer needed a new enterprise resource planning (ERP) system that could handle the diverse transactions all through its operation, from customer and partner orders to retail stock replenishment. It also had to comply with different regional rules, tax requirements, and business regulations around the world.

Rituals chose Microsoft Dynamics 365 as the company’s new ERP system. With the help of business transformation partner HSO, Rituals would connect the ERP with other applications to support operations from end to end. Dynamics 365 Finance and Supply Chain Management are the center of a comprehensive and secure solution that helps the company manage every aspect of its value chain from product lifecycle management to purchasing and production, distribution of goods and fulfillment of sales, and finally to downstream financial operations that follow.

The move to Dynamics 365 Finance and Supply Chain Management would also allow Rituals to expand its presence to China. Each region has specific business, compliance, and intercompany requirements that Dynamics 365 could handle flexibly and efficiently. During the implementation, two China-based entities were added, and the first two stores in China were opened.

Streamlining with Dynamics 365 and Power Apps

Rituals partnered with HSO to replace its aging Dynamics AX 2012 system with Dynamics 365 and Power Apps along with developing a “continuous improvement model” for its global rollout schedule. These comprehensive and secure solutions help the company manage every aspect of its multichannel commerce activities, from order processing, sales transactions, and inventory replenishment to financial reporting, with simplified, standardized, predictable, and automated workflows.

The company aimed to use standard features as much as possible and replace legacy customizations. By adopting the standard Dynamics 365 capabilities wherever possible and adding third-party applications or Microsoft Power Apps for specific needs, Rituals would reduce complexity and reliance on external resources for system maintenance. Since Rituals maintains a best-of-breed strategy, integrations between systems are a common factor, and the company uses Power Apps for ease of use when bridging multiple applications. The user-friendly, low-code solution allows core processing through primary systems without needless complexity for users to access these different applications. Two of the apps currently deployed by the company include:

Store decoration: Most of the supplies needed for store decoration and styling are set to auto-replenishment and the app allows store personnel to order items that are not automatically replenished.
Quote-to-order: This app connects Ritual’s Salesforce Sales Cloud users to Dynamics 365 Supply Chain Management, enabling collaboration on quotes between sales and supply chain functions.

Omnichannel shines with Dynamics 365

Rituals uses a sales strategy that combines different channels for B2C and B2B sales and relies on Dynamics 365 to handle orders and third-party logistics for fulfillment. Dynamics 365 Supply Chain Management is the main order-processing application for Rituals. It assigns stock for sales orders that are in the quote-to-order stage and processes sales orders from various sources, such as Centric Electronic Data Interchange, a B2B order portal based on Sana Commerce, and other channels integrated into Dynamics 365. Dynamics 365 handles these orders, generates item-picking lists and shipping labels, and then sends the order transactions to a third-party warehouse management system.

Dynamics 365 Supply Chain Management keeps track of the warehouse entity and location hierarchy to help with managing stock, production, and distribution among warehouses and stores. These movements and transfers, which often happen across different companies, are handled from start to finish in the system. As Kai Jacobse, Head of Supply Chain & Finance Technology, explains, “What distinguishes Dynamics 365 is the flexibility of the platform in combining it with third-party software and the variety of enhanced functions.” It starts with stock movements and then flows into finance, where buy-sell transactions are recorded. Distribution signals are sent to retail locations and third-party logistics providers (3PL) through integration with the various warehouse management systems and store logistics applications to tell the 3PLs what inbound and outbound services they need to do and notify store staff when goods will arrive. Finally, the orders are automatically moved to Finance for invoicing and revenue posting.

“What distinguishes Dynamics 365 is the flexibility of the platform in combining it with third-party software and the variety of enhanced functions.”

Kai Jacobse, Head of Supply Chain & Finance Technology, Rituals

But the automation and integration don’t stop there. Rituals also improved its demand planning and payment processing with Dynamics 365 and other applications. For example, Dynamics 365 generates purchase orders based on demand signals from Slimstock from both B2C and B2B channels, while Exflow automates matching and invoice approvals. Dynamics 365 Finance handles supplier payment processing and other downstream financial postings, and Extended Banking helps manage electronic payments and bank reconciliation. Working together with integrated third-party apps, Dynamics 365 Finance and Supply Chain Management are making Rituals’ workplace more efficient and workers more productive.

Along with its B2B and B2C e-commerce sales, Rituals has more than 6,000 point-of-sale terminals in 1,200 stores. Dynamics 365 tracks inventory movements and sales from every source and channel every day. To aid this flow of data, Rituals uses 60 different Dynamics 365 integrations for transaction types such as customers, pricing, orders, and products.

For advanced analytics and reporting capabilities, Rituals connected its company data stored in Google Cloud to Dynamics 365 using Azure Data Lake Storage and Azure Synapse Analytics. This gives Rituals a unified and scalable solution that fits its unique business needs. As Laura Mariën, Program Manager Supply Chain & Finance, explains, “The large selection of off-the-shelf add-ons and Power Apps accommodates the requirements that are unique or require a temporary solution.” With Dynamics 365 and Power Apps, Rituals can align every business process in every region and channel.

“The modular design and integration flexibility of Dynamics 365 enabled us to adapt our implementation sequence and strategy multiple times, ensuring alignment with new and continuously evolving business requirements.”

Jorin van Amstel, Sr. Manager Sales & Marketing Tech, Rituals

Modernization and optimization achieved

From initial planning and design in 2021 to system testing and user training in early 2022, Rituals leaned hard into its mission to modernize and expand its systems. The first launch in Hong Kong was a success, followed by rollouts in China, the US, and Europe. It was clear the company would meet its aggressive expansion goals. By the end of 2023, Rituals had optimized and unified the new systems across every location and channel. According to Jenny de Vries, CFO of Rituals, “Dynamics 365 is the glue that holds our global, multichannel finance and supply chain operations processes together.”

Rituals’ solution template combines standard features, third-party applications, and Power Apps, making it easy to adapt to fresh features that come with regular updates from Microsoft. As Jorin van Amstel, Sr. Manager Sales & Marketing Tech, describes, “The modular design and integration flexibility of Dynamics 365 enabled us to adapt our implementation sequence and strategy multiple times, ensuring alignment with new and continuously evolving business requirements." A well-architected solution template also helps Rituals expand into new countries quickly and easily.

Rituals endeavored to grow its business and improve operational systems. The company achieved these goals with Dynamics 365 and is realizing the following benefits:

Scalability: With a modern ecosystem, Dynamics 365 easily handles the company’s current 20% year-over-year growth rate and supports new innovative features.
Efficiency: Dynamics 365 helped optimize and standardize supply chain operations and finance processes.
Reporting: Dynamics 365 made financial reporting timelier, relevant, and compliant with regional tax requirements.
Analytics: AI-driven analytics makes business health and complex forecasting easier and more reliable.
Compliance: Government compliance and international regulation standards are easy to maintain with intelligent customization of business rules.
Simplicity: IT management is simpler with less hardware, software, and security measures to maintain in-house.
Standardization: Rituals used 95% of features provided out-of-the-box, which simplified implementation and will streamline updates for years to come.

Rituals accomplished this remarkable transformation by embracing innovative technologies and partnering with the right team—and the rewards have been immense. “We created a continuous improvement model combining regular roadmap activities like solution changes and software updates with implementation activities like data migration and testing. This model was used to ‘sprint’ towards each of the country rollouts, taking quality, capabilities, and availabilities into account. We now have a new innovative model for executing international rollouts and a true collaboration model between customer and partner,” says Rick Brugman, Program Manager, HSO.