Consumers’ discretionary spending may have suffered a big blow during the Great Recession, but that doesn’t mean every indulgence went out the window. Two companies in the beauty industry are proving that, by targeting a niche customer base, maintaining attractive price points and sticking to what they know best, a downturn can be an opportunity for growth.
Lipstick tends to be a strong seller during recessions because it can be purchased for less than $10 and can make a woman feel better with just one swipe.
In many ways, the blowout is the hair industry’s lipstick – which might explain why Drybar is doing so well. Drybar is a salon that only focuses on blow drying women’s hair for $35, and in just a year, 10 new locations have opened from coast to coast.
The idea for Drybar originated from its founder Alli Webb’s love of getting her own hair blown out. Webb went to beauty school in her 20s to master the art of the blowout because she was “obsessed with hair and fashion.” After beauty school, she got married, started a family and moved to Los Angeles. As her children got older, she wanted to work again and noticed she had a lot of mommy friends who were interested in getting their hair done. She started a mobile blow drying business in Brentwood, Calif, and quickly realized she was on to something. Her brother became her business partner while Webb’s husband lead the branding, and out of their collaboration, Drybar was born.
“The women whose hair I was doing had the same frustrations [about getting their hair done],” said Webb. “They either got overcharged at their own salons or the discount chains were hit or miss; there was no good option.”
Drybar is set up to mimic a bar with very clean and feminine undertones. While Webb described the opening as “mayhem,” patrons steadily came through the door attracted by the service’s affordable price point. She sees her clients cutting back on getting haircuts and coloring, and turning to blowouts to make haircuts last longer.
But Webb knew that reasonably-priced services alone wouldn’t generate repeat customers – she had to focus on customer service to make sure her clients stayed happy.
“If somebody treats me really well, I am going to go back,” she said. “People underestimate that, and we try to make woman feel special and get to know them. The customer service aspect of our business has really helped.”
Marla Beck, CEO and co-founder of high-end cosmetic and skincare store Bluemercury, has also seen her business skyrocket this year.
She started the company 12 years ago based on her own philosophy of customer service and “being the friendly expert neighborhood store.”
When the recession first hit in 2008, Beck did not reduce her inventories or cut jobs; she became more strategic in her purchasing plan for the stores. She also took advantage of the real-estate meltdown that caused commercial property prices to drop and opened up stores in only prime locations.
She also kept her eye on the basics, realizing that women see cosmetics as a way of easily and affordably updating their fashion. She embraced the importance of innovation, recognizing that as long as brands are bringing in new technology, “clients keep talking.”
Beck has opened eight stores this past year and just signed plans to open another 10 in the upcoming year, but stressed the importance of not over expanding until locations are really working.
During slow periods, Beck unleashed heavy email campaigns to drum up business. Bluemercury also uses a data tracker computer system in all its stores to track client’s purchase history and contact information.
Beck advises small business owners looking to open that “you have to love it because it is a grind. It is hard work to build a business even after 12 years.”
“You have to also see what you are bringing in to differentiate [your company]. The question is what are you doing that is different from everybody else out there,” said Beck. “Also, don’t think too much. Start something, get in there and you’ll figure it out. Often the businesses you start on day one isn’t the same on day 365. Part of it is just getting in there and getting going.”