There are thousands of YouTube videos about coloring hair, and Denton-based Sally Beauty realized that none of those are just about your hair.
The retailer and wholesaler of all things to do with hair care has created a DIY concept called Studio by Sally with staff professionals who teach customers how to color and style their hair at home.
The first of six Studio by Sally stores to open this year is in a Denton shopping center on West University Drive a few minutes from Sally Beauty Holdings’ corporate headquarters. CEO Denise Paulonis told Wall Street analysts that the concept could grow to 100 locations over the next three to four years.
Studio by Sally is a response to customers demanding more from the retail experience. It’s also the 59-year-old company’s first big move to challenge upstart competitor Madison Reed, which has been expanding on Sally’s turf since it was founded in 2014 with its online hair color subscription service for the DIYer and hair coloring salons conveniently in neighborhood shopping centers.
Sally Beauty believes it has hit on an idea that can set it apart, said John Goss, president of Sally Beauty Supply.
While other salons count on customers to keep coming back several times a year and spending $75 to $200-plus each time to have their hair dyed, Studio by Sally is the opposite. The company wants you to keep buying its hair coloring products that start at $8 a box to apply at home.
Bring your phone because the one- to two-hour visit is recorded for playback anytime, giving DIYers the confidence they need and a quick refresher course at home, said Brenda Rutenber, Sally Beauty group vice president of stores.
“Stylists get them started and then customers take over, trying this technique or that,” she said. “Customers are recording answers to their questions: What do I do next? Wait, what was I supposed to do? And watch it later.”
Teaching sessions are by appointment. It includes a chair and mirror setup with lighting and space to record sessions so customers have that video to take home. A root touch-up instruction costs $40. An accent highlights or touch-up lightening session is $65. Styling services include instructions for a quick hair wash-and-go for curly hair for $35. Blowouts are $30. The front of the store is stocked with products and hair styling tools similar to that of a Sally Beauty store.
“It’s in our DNA to offer DIY products,” said Lisa Brown-Mitchell, director of the new Studio concept. “We wanted this to be a one-on-one warm and fun experience. The idea is to share knowledge because DIY is a community.”
It’s a big opportunity. About 95 million American women color their hair about every six weeks. They start when they’re around 35 and don’t stop until age 70, according to research from Madison Reed. About 52% of them color at home either to save on money or time.
Sally’s stylists make sure customers are using the proper color and the right product. Two sets of gloves are set out because customers will apply their own color as their hair is sectioned off. Customers learn about their hair texture and what kind of shampoo they should use and why.
“Haircare by you” is one of the inspirational marketing messages on the wall at Studio by Sally, which represents a new source of revenue.
That’s something Sally Beauty hasn’t had in a long time.
The operator of 3,439 Sally Beauty Supply stores and another 1,355 wholesale locations for professional salons under names such as Armstrong McCall, is profitable but has struggled to grow.
Sales last year of $3.8 billion are just slightly above a decade ago. Sally Beauty closed 350 unprofitable stores starting late last year.
Paulonis, who joined Sally Beauty as CEO in September 2021, has focused the company on customer educational experiences such as Studio by Sally. She also oversees Sally Beauty’s own higher-margin brands such as Bondbar, its brand that competes with the popular Olaplex hair products.
Sally Beauty has a fast-growing competitor in Madison Reed, which has been disrupting the hair color industry with at-home coloring products it sells directly, through subscriptions, on Amazon and more recently on the shelf at Ulta Beauty and Target stores. It also has hair color salons that compete with mostly independent salon operators.
Madison Reed, which has raised almost $300 million in several rounds of venture funding, started opening its “color bar” salons before the pandemic and has about 85, including seven in D-FW.
Amy Errett, CEO and founder of Madison Reed, said that while she started out with DIY products for the 52% of women who color their hair at home, the color bar salons, with prices that start at $75, address the rest of the huge market.
“This is a category that has a high friction point. What I mean by that, intuitively a woman is scared to make a change about what her hair will look like,” Errett said on a Cowen Equity Research podcast last year. “This isn’t like something screws up, you put it back in the box and send it to someone. This is appearance changing. So we’ve learned all these touchpoints are critical.”
Sally Beauty’s Goss said Studio by Sally’s intent is to attract new customers, to get people engaged in using the retailer’s products who otherwise wouldn’t.
“It’s a value proposition of time and money,” Goss said. “We believe we have a service you can’t get anywhere else.”
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