From 800 ft2 Beauty Supply Store to 13-store Retail Enterprise
Kyoon W. Seok, the Founder of Beauty 4 U
The Washington Metropolitan area, so-called “DMV”, includes Washington DC and parts of Maryland and Virginia. In addition to 11 stores in DMV, Beauty 4 U has a location in California, making a 13-store beauty supply enterprise. The average retail floor runs 24,000 square feet in size carrying 40,000 items, and they are run methodically by its 160 employees. Its founder Kyoon W. Seok has worked in the hair industry for more than 30 years. Hence, you can confidently say that he saw it all. Nobody would beat him in his affection toward and knowledge about the beauty industry, which is indisputably the lifeblood of the Korean American businesses. We interviewed him about the past, present and the future of the beauty supply, and subsequently general operations manager Eric Hong walked us through the flagship store of Beauty 4 U.
$28,000 Monthly Sales at a 800 sq. ft. Retail Space on $230 Rent
What brought Mr. Suk into the beauty supply business? Before he engaged in the beauty supply business, Mr. Suk was a CPA. As CPAs handle the financial aspects of businesses, they inevitably learn confidential information about their clients. As a result, once a company retains a CPA, it sticks with their choice. It was quite a struggle for Mr. Suk to build a client base. In a way to cope with the struggle, he lent his hands to his brother who ran a beauty supply store, which was rather small. Still, he considered it as a side gig and continued working in an office as a CPA. The side gig was going well, probably too well. “Around late ’80s and early ’90s in Chicago, commercial lease for 800 square feet ran about $230 a month, and in that space we made $28,000 a month. The minimum wage at the time was $4. Therefore, you could run the store with three employees without the involvement of the owner, so I thought ‘this business is for real.’ And I committed myself.”
Despite the Successful Business, He Owned His First Home at Age 50
How does a business grow from an 800 sq. ft. single store to a 13-store chain? Most beauty supply stores at the time were family-owned small businesses, so called mom-and-pop shops. A couple could live comfortably off a beauty supply store. Many store owners tended to spend the money as they earned. They bought big houses and cars and spent money on travel. “I was not interested in spending money. I didn’t have hobbies, nor did I like luxury goods. So, despite the successful business, because I invested all the profit into the business, I owned my own home at my age 50.” Reportedly, business is his hobby. A beauty supply store with a chandelier and a piano was only possible because of the consistent reinvestment, he emphasizes.
The First of the Thirteen, the Grand Opening of Beauty 4 U was Saddening
In 2000s, when he opened the first Beauty 4 U store in a 6,000 sq. ft. retail space, they said it would fail. There was in fact a news article stating it as a foolish move. In the midst of this negativism, some hair companies refused to do business with him. “I learned later that the companies thought the store would be out of business soon.” He smiles as he looks back into his past, but the reality at the time was a store carrying only a handful of brands. As the store was vast in size, especially during the morning hours when the sales associates tended to visit, the store was quite empty. A small store can look pretty busy with 5 to 6 customers, but twice many customers would not make a big retail space look crowded. Nevertheless, the pleasant shopping environment increased the average spending of a customer who enjoyed spending time at the store. “In the beginning, it looked like an out-of-business store, but the vendors who had contracts with us knew that the business was going well based on the repeat purchase orders and on-time payments,” says Mr. Suk refreshing his memories.
Consistent Investment Online and Offline
Now, we surely want to know where Mr. Suk is focusing on for his investment. Beauty 4 U continues to make reinvestment in retail interiors and system. Like everyone, it closed the door for about two months due to Covid-19, and it turned the crisis into an opportunity by reorganizing the store with curbside pickups. “It was difficult to remodel the retail floor while the business stayed open, so we remodeled six out of 11 stores in DMV. We also installed a POS system customized to beauty supply stores to grasp all the data about revenue, inventory, trends, and so on easily.”
They made a few attempts to ride the tides of online business, but they had launched it without necessary preparations as to workforce. The online business arm could not be fully functional at the time. “We reopened the online business with a designated online business team after the trials and errors, and it has shown better than expected daily traffic due to the pandemic,” explained General Manager Eric Hong who stayed with Mr. Suk for the interview. Mr. Suk is not from an internet generation, so he delegates unfamiliar portion of the works to professionals. The online business team runs social media accounts on Instagram and Facebook to communicate with the customers directly.
In addition, beauty supplies are currently focusing on African American customers, but they want to attract more and more Hispanic and Caucasian customers in the future.
Beauty 4 U Online Store: http://www.beauty4u.com
The Secret of Running 13 Stores
When asked about his secret of running 13 stores, he responded with two key aspects of the business operation.
#1. Complete Control by Managers and Systematic Analysis
“We have 160 employees on the payroll at Beauty 4 U. An organization this big cannot be managed singlehandedly by the owner. The data team at the head-office analyzes trends and fluctuations and relays the operation plans to the hair, wig, and store managers at each store. Before Covid-19, we had in-person meetings monthly, but now we communicate via email.
#2. Transparent Operations
“Especially during the pandemic, I heard many businesses lost their opportunity to enroll in the Paycheck Protection Program because they failed to do proper tax reports on employees. Although transparency sounds ominous and feels like taking a detour, it shouldn’t be. Thanks to the PPP, all laid-off employees were compensated for lost wage and came back to work later. Even when it comes to masks, we believe we should make an example and only sell officially approved ones. Even if an item is sought after and sells well, if there is a slight chance of trouble, we don’t sell them.”
What He Wants to Say to Beauty Supply Owners and Managers across the Country
Day by day, offline-focused beauty supplies are facing increasing risk. Nevertheless, beauty supplies will play an important role in the future as they did in the past. Of course, the existential question of beauty supplies should change. When the retail landscape including online and offline stores is changing, your customers will leave you if you do not keep up with the online trend and consumer sentiment.
You need to start thinking about providing a valid answer to why a customer should pay a visit to your store instead of shopping at Amazon.com based on strategies revolving around customer experience. The business environment is changing very fast, and the danger is imminent for beauty supplies. The first object should be realizing that customers’ expectation and perspectives of shopping have changed.
To bring customers into your store, you need to look at the products in the shoes of the customers as well as to consider their experience and implement changes to bring values and services they seek. You need to make an environment in favor of the easy and desirable shopping experience instead of focusing on the convenience of store management. While specific implementations would differ from store to store, the fundamental is that you should motivate customers to come to your store. Lastly, I want you to be proactive than passively responding to changes, meaning you should take a note of issues beyond the imminent threat faced by your business.
A Store Tour with Beauty 4 U General Manager Eric
General Manager Eric at Beauty 4 U majored in retail business and worked in beauty supply operations for 15 years, but he passionately says he has learned a lot during the pandemic and means to keep learning. Guided by him, we checked out every detail of the flagship store of Beauty 4 U and its operations.
Hot Sellers are on Display at the Entrance
Edge Booster, Got2B sprays, BW2 bleach powder, hair growth oils are popular sellers, and Cantu, Crème of Nature, and Moroccanoil are among the hottest brands. The pandemic made clippers and nail products top sellers. Eyelashes that are visible when you are wearing a mask are steadily popular amongst makeup products. For these products, we have a dedicated section at the entrance for an easy access. For customers who cannot go to salons, wigs are also popular.
Section for Covid-19 Goods
Hand sanitizers, masks, latex gloves, face shields, etc are at a location near the cash register. For safety concerns, we are not accepting returns for all products.
Anti-theft Stickers for Small Items
To prevent theft of small items especially vulnerable to shoplifting, including eyelashes and lip products, we have sticker tags and security guards at the entrance. We use Zonetech brand anti-theft stickers.
Keep Your Store Safe from Covid-19
We installed acryl shields for every cash register, and we placed floor stickers made by our design team every six feet to promote customers’ social distancing.
Wheeled Store Displays and a Grand Piano
All display shelves and racks have wheels, so you can easily move them to a desired location. Another interesting fact is that we have a grand piano within the store. On weekends and during events, we invite pianists for live performance. It creates a special atmosphere.
A Spacious Wig Section Pleasant to Your Eyes
A manager and an assistant help customers at a well-organized wig section. We use proprietary tags designed by our design team instead of manufacturers’ tags for wig mannequins.
Continuous Support to African American Community
What you see in the picture is a beauty school in Washington D.C. of which Beauty 4 U is a sponsor. We donated hand sanitizers and masks in addition to our annual donations made in various manners. In addition, as our store has significant influence on DMV’s African American community, we carry locally manufactured goods. Customers are happy to see them.
New Promotions Every Month with Customized Designs by the Design Team at the Head-office
Every month, we run a new promotion. Our design team produces a promotional poster at the head-office. For example, in June we reopened the store with Welcome Sale; in July we ran Summer Sale; in August we extended Summer Sale in lieu of then-planned Back-to-School Sale because of the local school closure; and in September we will run In Store Sale focusing on items that need to be cleared of inventory or overstocked at individual stores. In October, we plan to hold Halloween Sale.
We usually promote hot sellers for a given month or seasonal products, and we offer discounts for vendor-promoted items or products we procured at an advantageous price.
Reward Program to Lure Back Customers
Throughout the retail floor, we placed Beauty 4 U’s own QR codes that customers can scan with their smartphones to access our online store. We offer 3% reward for every purchase, which is available through a keychain card, but a mobile option is coming.