Retailers   //   May 24, 2021

Hair color brand Madison Reed is doubling down on physical salons

Before the coronavirus pandemic, at-home color brand Madison Reed had planned to invest heavily in physical salons.

Back in 2019, Madison Reed — which started in 2013 as an online-only brand — announced plans to open 600 stores by 2024. That included a mix of 100 company-owned locations and 500 additional franchise salons, where customers can book color-focused services, including root touch ups and highlight treatments.

The company was forced to temporarily close some locations on and off due to the coronavirus, which delayed some of the planned openings. Still, it more than tripled its physical footprint in the past year, going from 12 color bars in March 2020 to 38 today. And now, Madison Reed is due to end the year with 50 locations. 

Like gyms and spas, hair and beauty salons have had to navigate openings and closings over the past year. Now, service-based salon operators are preparing for an anticipated demand spike — courtesy of gatherings and travel. As customers get more comfortable with in-person shopping, Madison Reed wants to use the salons and retail-only locations as hubs for customers to pick up products, schedule consultations and attend tutorials and events.

Founder and CEO Amy Errett noted that since local governments have allowed salons to reopen, store traffic has ramped up. As of this month, traffic is at 80% of pre-Covid levels. “The visitors are a mix between our existing DTC customers and new ones discovering the brand via the color bars.”

Though it had to temporarily close some salons, Madison Reed saw a 130% month-over-month e-commerce sales growth during the coronavirus. To serve customers at home, the company’s color specialists began conducting video consultations; at the height of lockdown, Madison Reed had hundreds of sessions a day booked, Errett said. And during the pandemic’s peak, customers purchased a hair color kit every five seconds on the website. 

These digital features will continue to be offered, along with the brand’s color quizzes and how-to tutorials. However, Errett said that after a year-plus of e-commerce growth, the company is ready to expand nationwide. “We’re not worried about sales returning to pre-pandemic numbers,” she said. But as the world returns to a post-vaccine new normal, Errett is predicting a hybrid post-pandemic mix.

“We’re bullish on physical retail because there will always be customers who prefer to have a professional color their hair,” Errett said. 

The stores offer professional color services, “but also serve as a retailer for our products,” Errett said. While most professional salons offer an array of affiliated brands’ products, Madison Reed locations carry the brand’s line of dyes, treatments and hair care exclusively. 

Personal care-focused DTC brands have long experimented with physical services. Over the years, brands like Bevel and Harry’s opened pop-up shops that offered grooming services, as well as sold the brand’s products. However, Madison Reed’s retail strategy is less marketing focused. It’s geared toward creating a hybrid model that includes both products and services, said Errett.

Some of the new and upcoming locations will be called “mini bars,” which are smaller store formats that don’t offer actual color services. Instead, they are staffed with specialists that help customers shop the Madison Reed line and give application tips. The first Mini Bar opened at New Jersey’s Garden State Plaza mall this month — one of three new mall locations. The company decided on these smaller stores, since they’re quicker to open and easier to maintain. The brand is hoping these locations will set it apart among traditional hair salons, especially for packaged products like shampoos, conditioners and treatments.

Leon Alexander, president of hair salon consulting firm Eurisko, said the move is a play on the single-service trend that Drybar helped popularize. “Creating more touch points with their customers helps build on their brand and take a greater market share among salons.” 

Historically, product sales at professional salons has made up a tiny portion of overall beauty sales, Alexander noted. “So there is an opportunity to offer a more customer-friendly experience.” 

Salons are trying to adapt to compete with retailers like Amazon, Ulta and Sephora, where most customers are increasingly buying hair and beauty products. He also pointed to players like Amazon entering the salon field, making customized experiences even more important. At the same time, however, “the salon industry has an advantage in that people have to get their hair colored or cut somehow,” Alexander concluded.