Industry News

How Your Salon Can Compete with the Big Chains.

Anne Moratto | May 7, 2014 | 9:36 AM

It took you many years of working hard behind the chair to build your customers base. You saved as much money as you could by keeping focused with one thing in mind, opening your own salon. The planning went on for two years, meeting with real-estate companies trying to find the best location, with the demographics that best suited you and your clients, salon designers, furniture companies, web designers and finally the last piece of the puzzle; meeting your local bank to nail down the necessary financing to make it all happen.

Finally the day had come, after a successful grand opening party you were now open for business. All of your planning paid off. You were now exactly in the position you wanted to be; on the road to being a successful salon owner.

 The fanfare in your town was overwhelming. Your existing customers where so excited and a steady flow of new customers seem to be coming in daily. Wow, just what you dreamed off, then with a blink of an eye a big chain opened right around the corner from your salon. You never expected this to happen. What should you do? Hand over the keys to your salon and throw up the white flag and surrender? You have never been a quitter so that option is out but, how do you compete with someone who is bigger, stronger and has deeper pockets then you? Let us take a look at how you and your salon can compete with the big chains in today’s business world.

Independent retail business owners often worry when a large chain store threatens their business. The threat of having to compete with large retailers keeps many would-be entrepreneurs from ever opening a salon. Unfortunately, those fears are well-founded. Studies show people purchase a higher percentage of their merchandise from the mass merchandisers and consequently a lower percentage from local merchants. Also depending on the area your salon may be located in will dictate the percentage of people who may prefer service price over quality.

It may be daunting but despite the emergence of these multi-million dollar businesses, many small retailers continue to thrive (and profit) in a highly competitive marketplace. The key to survival is to offer the products and services that your competition does not. Strategies must be implemented to overcome the lower prices and wider selection that large retailers provide. Here are some tips to better position your salon and retail business for competing with the big box stores.

Don't Panic

Occasionally, we can be our own worst enemy. Talk of a big competitor coming to your community is not a reason to immediately consider relocating or closing your business. First, recognize that you may need to make a positive change in the way you do business. Then, assess whether or not you have the desire to make those changes. If you have invested the time, energy and money to open your business then changes are a normal part of doing what is necessary for survival. If you are not open to change then your salon will die a slow death. Not to mention taking you and your personal finances with it

Do the Research

Seek advice from your trade association or consider hiring an industry consultant to conduct a formal study of what customers value most and what they value least about your business. Speak to your manufacturer product sales person. They should be able to assist you with a true understanding of what should sell in your salon when it comes to retailing. You should also come up with a plan to counter attack the big box store with items they do not sell. Understand your store's competitive edge. Don't be afraid to shop your competition. One way to be educated about the way your competition does business is by experiencing their customer service first hand. If possible, talk to their customers. Find out what their shoppers like or dislike about the chain store. Visit the store several times with and without your staff to see exactly what it is you need to do and offer to be a better service and retail provider to your customer base.

Dare to Be Different

Mass merchandisers generally have a little of everything, whereas smaller specialty stores can focus on a narrow but lucrative niche. This can establish your store as the place to go when buying these items. If your market niche is very small, consider keeping a few products and services that appeal to a wider range of customers, but have exceptional product depth. Education is key and your staff needs to understand the retail products your salon uses and sells. If the big box store sells the same products as your salon, you may think about dropping your current brands and find another. By doing this you are now different then the big box store. Find a manufacturer that is willing to help you grow your business with a new product offering. If you choose to stick with your retail brands you currently use, then you better become the specialists in these brands and know the ins and outs of these products. Knowledge is key to overcoming your competitors when trying to beat then at the retailing game.

Focus on what makes your business unique. Emphasize the originality of your inventory as compared to the items offered by the chain store. Customers are intrigued by the unusual and are often attracted to the idea of getting something special from an independently owned business. Smaller retail businesses also have the luxury of creating a comfortable, cozy atmosphere within their store. This gives your store a personality which is often lacking at the big stores. Let your customers touch, feel, smell and use the product before the purchase.

Explain in detail how they will look when they use these products at home. Give them a money back guaranty if they are not happy with the products they buy. These little things will go a long way with your customer base.

Most big box stores do not let customers open any of their retailing products, never mind letting you try the products before you buy. These little tactics that are so simple will separate your salon form the larger chains. Customer service has to always be a top priority with you and your staff.

Hours of Operation

It’s hard enough to juggle running a salon, staff, clients, accounting and your family and social life. Let’s face it owning and operating a salon is no easy task. The idea of keeping more hours has you wondering if salon ownership is worth it.

In today’s world many families are a two income household. Your customers may also be working crazy hours, as well as further away from home to make ends meet. A regular 9 to 5 hour of operation and being closed on Sunday and Monday are no longer feasible to be successful in the salon retailing business.

We are not saying that you should be open 24 hours a day 365 days a year, but to have a successful profitable salon you must be open to meet the demands of your clients.

Let’s look at an example; if your salon is located in a city next to a train or bus station it would make sense to open earlier and stay open later to be able to service the client who may be on the way to work or stopping on the way home for a quick touch up or bottle of their favorite conditioner or shampoo.

If your salon is located next to a police station or factory, if your clients work shift work staying open later may be a way for them to get the much needed service that they can’t seem to fit into their busy schedules.

There is a reason big box retailers are open late at night or early in the morning. Speak to your customers; ask if opening early or closing later would help them with their busy schedules. If you don’t ask you will never know. The worst thing in the salon ownership world is if when your client pulls up to your salon and the lights are out and the sign on the door says closed. No doubt, they will be on their way to the store that is open to get their favorite hair care products or at least settle for something close to what they buy from you. Don’t be surprised if they don’t come back if this happens often. The worst part about this is your clients may not come back at all. Convenience and ease wins every time. One more notch in the big box retailers belt.

The Power of Pricing

Be open to a little haggling where price is concerned. More price negotiating goes on in your "Mom and Pop" stores than in the big box stores. Bargain shoppers know the independent retailer has the power to negotiate a sale and these customers are more inclined to shop where they feel they set their own prices. Remember, it is all about the customer's perception.

Using loss leaders as a marketing tool can also help gain new customers and increase return visits. Implemented correctly, loss leaders have been proven to be a profitable pricing strategy.

One of the keys to successful retailing in your salon comes down to the relationships with your suppliers. Using them as a true partner will enable you to run specials and offer incentives to new and existing clients. Most salons do not leverage their relationships with their product sales people. Not taking advantage and understanding what the role of a true product sales representative is a huge mistake.

Product retail sales reps call on your salon not only to take necessary orders but to educate your staff let you know when the manufacturer is coming out with new products and also let you know when they are running a promotion on others.

 These business partners can give you retailing signage, promotional pieces for your display cases, and retail bags for purchases and transparencies for your windows promoting the brands you sell. If you don’t bother to ask and truly leverage this relationship then your success in retail will be minimal at best. This is a true cause of failure in many salons.

Personal Attention

Treat each customer as your best customer. As a small store owner, you can concentrate on the little details. Superb customer service is the biggest intangible asset to the independent business. People like to shop and have their services done where they feel comfortable and where they feel the owner truly cares about their wants and needs. It is the least expensive change to make in order to take on the larger chain stores. Offering a true 5 star experience in your salon doesn’t cost you anything. it’s just implementing this way of business philosophy one client at a time every time.

Building relationships

Big-box stores can’t offer the personal touch of a mom-and-pop, so why not capitalize on that idea? People like doing business in a warm environment with someone they like, feel comfortable with and have the ability to open up when their life may be in a whirl wind or a relationship they are in is in a shambles or their job isn’t going as well as expected. The simple art of listening sends a message that you truly care about your clients just like a warm handshake, a pat on the back or  hand-written thank you notes with special offers to a new customer when they visit your salon.  Greeting customers by name, taking customer calls and making exceptions that large retailers can’t do will help your smaller storefront stand out.

Connect with locals using social media.

 Large chains and franchises typically do a terrible job of maintaining social media profiles in the local communities where they have stores. Set yourself apart by ramping up local engagement via Facebook, Twitter, Pinterest and YouTube. Post pictures of your staff and clients and promotions your salon is currently offering

Blog locally.

 If the big boys even have a blog, they're not likely spending time focusing on local issues. By frequently blogging about topics that your local customers actually care about, you increase your salons odds of generating positive local search results online. And you're telling your customers they should have more -- not less -- information about the products and services you sell.

Support local causes.

 National chains move slowly, especially when it comes to sponsoring or supporting local events. As a local yourself, pay attention to what's coming up on the local events calendar and join up with civic-minded organizations that are targeting the same people who might like to buy your products or services. Supporting local causes endears your brand among your target demographic. The best part of being small is you can choose who you want to support. Supporting a local dance school or local girls soccer team will go a long way with your clients and hopefully bring in new business

State your differences as positives.

 Don't bash the competition -- either in front of your staff or with customers. Instead, point out the clear differences between your offerings by speaking in positives, not negatives. For example, "Featuring locally-sourced ingredients that are healthy for you and your hair and your family since 1997" is a better message than "Buy local!" or "You call that organic products? “Or they don’t care about you, your hair or your family. Not a way to keep things on the down low.

 Use size to your advantage.

 In most cases, everything you see on the shelves of a big box or chain store, or being sold or offered by a franchise, is there because one person -- a national buyer or category manager -- approved it. You, however, can start selling a new item on a moment's notice. By specializing in the niche items that helped you build your enterprise, you'll continue to drive business in your direction. Change is good; don’t be afraid to do so to meet the demands of your customers.

 Salon employee’s success strategies

In order to keep your employees from defecting to the competition and or having a salon staff walkout, you should treat your staff fairly. Motivate your staff and pay attention to their needs. Help your staff become proficient in their respective departments and make sure they are readily available to meet your customers' needs. If your employees can provide this, your customers will have an extra incentive to continue doing business with you.

These tips for competing with big box stores can help level the playing field. However, don't be misled into thinking exceptional customer service or unique products will win out over lower prices every time. As our customers' shopping choices change, so should our thinking. To succeed, we must lead or keep pace with the change. With or without new retail competition, this kind of planning is something small retailers should be doing anyway.


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