It is no exaggeration to say that family businesses are the backbone of the U.S. economy – representing 64 percent of U.S. GDP, 62 percent of employment and 78 percent of new job creation, according to research from Kennesaw State University. Moreover, family businesses represent the full spectrum of America’s business landscape – ranging from small businesses to major corporations. In fact, some of the most iconic American brands – including Ford, Estee Lauder and Walmart – are family owned and controlled.

Despite these strong economic stats, the survival of family-owned businesses is less optimistic. Only 30 percent of family businesses survive into the second generation of ownership, 12 percent into the third, and a mere 3 percent into the fourth, according to the Family Business Alliance.

With all of this in mind, NetSuite set out to understand what family businesses can and should do to ensure their longevity and success. What is the secret to balancing a family business’s traditions and history with the changing business landscape of today?

In a recent webinar “The Family Business: Balancing Tradition with Change,” NetSuite’s Ranga Bodla sat down with Ian Jay Ginsberg, President of C.O. Bigelow, distributor and retailer of beauty and personal care products, for a candid discussion around how the 180-year-old family business approaches balancing its rich traditions with modern trends.

The oldest surviving apothecary in America, C.O. Bigelow was originally founded as The Village Apothecary Shoppe in New York’s Greenwich Village. In the absence of doctors, this local apothecary became a popular destination where New Yorkers went to visit their pharmacist for a diagnosis and solution. As the brand became more established, the business passed from employer to employee when it was purchased in 1880 by Clarence Otis Bigelow, who renamed the company C.O. Bigelow. In 1939, Ginsberg’s grandfather, William B. Ginsberg, a first-generation proprietor, Eastern European immigrant and pharmacist, purchased C.O. Bigelow – and the family business was born.

Don’t compete where you can’t win

As a family-run pharmacy, the business thrived, continuing its legacy as a pharmaceutical and a beauty product destination. It was in the 1980s when the chain stores came to New York with a new “commoditization approach” for the pharmaceutical industry when the C.O. Bigelow brand evolved.

In the face of big-box competition, whose size and scale allowed them to offer more competitive pricing for less margin, Ginsberg recognized the business was in no position to compete on price. As he considered C.O. Bigelow’s own strengths, he realized its differentiating factor relied on the company’s rich history. It was then that Ginsberg realized the long-term strategy of C.O. Bigelow was to build on the strength of the brand and compete on what they had perfected over the last 150 years: the in-store apothecary experience.

Maintain authenticity in everything you do

Recognizing its status as a leader in pharmaceutical, beauty and care products, C.O. Bigelow sought to become experts as merchants. Ginsberg knew that to maintain this reputation, the company needed to source and sell the best products available. To do so, Ginsberg expanded his product search beyond the United States, traveling across the world to source the best products. As consumer buying habits and technology changed, C.O. Bigelow developed a catalog business, which eventually evolved to an online business.

Today, C.O. Bigelow operates as a retailer, selling its own branded products along with other family-owned products from around the world – both in-store and online. Additionally, C.O. Bigelow operates a wholesale business, partnering with retail partners such as Sephora, Nordstrom and Anthropologie. In all lines of business, Ginsberg ensures the authenticity of the C.O. Bigelow brand by “viewing every partnership as a marriage.” In doing so, the C.O. Bigelow brand – and the history it represents – lives on.

Use technology to level the playing field

Before moving onto NetSuite, Ginsberg admits he gave C.O. Bigelow’s back-end technology very little thought. It was only when it came time for an ERP upgrade did C.O. Bigelow really dig into the company’s system landscape. In doing so, he realized that the different business lines were all running on different systems – prohibiting a holistic view of the C.O. Bigelow business health.

Around the same time, fate stepped in. As Hurricane Sandy ravaged the East Coast, almost all New York-based organizations lost power. Ginsberg remembers that it was the company’s cloud-based email server that allowed them to maintain communication with their employees while many other companies in their industry could not. It was then that Ginsberg really bought into the value of the cloud.

C.O. Bigelow runs NetSuite to manage its financial, customer, inventory and order data. With NetSuite, C.O. Bigelow not only has a 360-degree view of the business but has also gained workplace advantages. The system itself is both easy to use and available anytime, anywhere – allowing employees to work remotely or more flexibility as needed. As for performance results, C.O. Bigelow has been able to grow its wholesale channel upwards of 30 percent annually across more than 1,000 partner stores, such as Sephora, Barney’s and Nordstrom. Cash flow has increased, and the business has better control over pricing.

Ginsberg argues that technology to a family business is the means to “leveling the playing field.” While most family businesses will not be able to match the size or scale of the Amazons of the world, they can match the pace. “The big don’t eat the small, the fast eat the slow” Ginsberg said. He encourages other family businesses to take a second look at their technology systems – and ask themselves if they are a hinderance or a tool.

Access the family business webinar recording for the full story into C.O. Bigelow’s family business journey.